• The Bahamian government is giving priority to reducing its foreign currency debt to 30% of total liabilities in a bid to reduce pressure on the currency peg and external reserves. The Government will increasingly look for domestic (Bahamian dollar) borrowing opportunities to finance its annual fiscal deficit and debt rollovers as it seeks to lower a foreign currency burden that currently accounts for 44.9% of its national debt. 
• Foreign currency borrowings are targeted at financing government’s capital expenditures, refinancing the global bond issuances, and achieving policy action reforms designed to promote private sector-led growth, secure improvements in the policy, legal, and institutional framework for state-owned entities, public-private partnerships, fiscal management, the business and investment climate, and build resilience to climate change, including emergency and disaster response. 
• To achieve this goal, the Government is planning to adopt a financing/borrowing strategy that reduces the risk associated with rising interest rates, and therefore debt servicing costs, by borrowing at fixed interest rates. It also plans to extend the time at which its various debt principal issues mature. 
• An increase in the foreign currency debt has led to unwelcomed side-effects being experienced in the Bahamas. Reducing its foreign debt would lead to improvement in the country’s capacity to invest in the future of its economy, by limiting the amount of revenue that goes to servicing these loans, thereby increasing long-term economic growth.

 (Source: The Tribune)

• Guyana’s forestry sector managed to rake in export earnings of more than US$31Mn in 2021, according to figures provided by the Minister of Natural Resources, Vickram Bharrat. The exported products included logs, lumber, and round wood, derived from 377,838 cubic metres of production. The production numbers represent a 16% increase when compared to the previous year. 
• Although securing notable revenues, the forestry sector still has much more scope for development, particularly in the area of added value. Guyana is the producer of world-class timber, yet much more can be done to boost manufacturing, particularly in the area of furniture-making. 
• Even amid a global pandemic and months of devastating and unprecedented floods, the sector is well on its way to making a drastic turnaround, especially with the governing body, the Guyana Forestry Commission (GFC) being brought back from the brink of bankruptcy, with a monthly income revenue of $90Mn, a notable increase when compared to a pre-pandemic period in 2019, when the commission’s revenue collection stood at $70Mn. 
• The Minister explains that while oil is lucrative and as a country, they stand to benefit financially from oil and gas, what creates the majority of employment is the traditional productive sectors, especially agriculture, logging, mining. 
• The growth that Guyana has experienced from its forestry sector will present an opportunity for increased export earnings, job creation, and economic growth on a whole for the nation.

 (Source: Guyana Chronicles)

• European Central Bank President Christine Lagarde said on Monday that there is no need for big monetary policy tightening in the eurozone as inflation is set to fall back and could stabilize around 2%. 
• Pointing to mounting inflation risks, the ECB opened the door last week to an interest rate hike later in 2022 and said that a March 10 meeting will be crucial in deciding how quickly the central bank would wind down its long-running bond-buying scheme, a cornerstone of its stimulus efforts. 
• However, Lagarde appeared more cautious on Monday, arguing that high inflation is unlikely to get entrenched and warning that high energy prices, the biggest driver of inflation, are likely to be a drag on prices further out. 
• Lagarde told a European parliamentary hearing that the chances have increased that inflation will stabilize at the target, highlighting that there are no signals that inflation will be persistently and significantly above the target over the medium term, which would require measurable tightening. 
• Lagarde said that the eurozone economy was not suffering from the sort of overheating others were experiencing, noting that this increases the likelihood that the current price pressures will subside before becoming entrenched, enabling the ECB to deliver on its 2.0% target over the medium term.

(Source: Reuters)

• The last time the U.S. unemployment rate fell below 3%, as one Federal Reserve official has predicted it will this year, the Korean War was nearing its end and a recession that saw legions of workers lose their jobs was just around the corner. 
• While the circumstances were unusual, it nonetheless presented a now-familiar pattern - a falling unemployment rate eventually giving way to recession - that current Fed officials will be challenged to avoid as they try to slow the fast pace of inflation without wrecking an expansion that is delivering strong gains for workers. 
• Emblematic of the current confidence in the job market's strength, St. Louis Fed President James Bullard last week said he expects the U.S. unemployment rate to fall below 3% this year. That flashback to the 1950s in itself would be a warning for some economists. 
• Such a low unemployment rate is "a red flare" that the economy is overheating, with fast price and unavoidable wage increases and the U.S. central bank pushed to be more aggressive, said Tim Duy, a University of Oregon professor and the chief economist of SGH Macroadvisers. "I don't see where there is a good way out" that tames inflation without triggering a recession and the associated jump in unemployment. 
• It's a tradeoff - of jobs for price control - the Fed thought had become less relevant. In the decade before the onset of the coronavirus pandemic, unemployment drifted towards 3.0% without triggering inflation, and policymakers felt that showed the economy could put far more people to work than previously thought with prices remaining stable.

(Source: Reuters)

• On March 16, 2021, PIL entered into a Share Purchase Agreement with Fidelity Bank & Trust International Limited (a company incorporated in the Commonwealth of The Bahamas) to acquire the entire issued share capital (Shares) of Fidelity Bank (Cayman) Limited (FBCL), conditional on receiving approval by the Cayman Islands Monetary Authority (CIMA). 
• CIMA approved the acquisition and it was completed on February 1, 2022. The purchase price for the Shares was US$31,835,988.50 (subject to adjustment within 45 days of completion in accordance with the terms of the Share Purchase Agreement). 
• FBCL is a financial services company incorporated in the Cayman Islands and is licensed with the Cayman Islands Monetary Authority under the Bank and Trust Companies Act as a Category ‘A’ Bank to carry on banking business in the Cayman Islands. Category A Banking License – Allows a bank to operate both in the domestic and international markets and provide services to residents and non-residents of the Cayman Islands. 
• PROVEN’s further exposure in the Cayman Islands through FBCL should bode well for its bottom-line as the Cayman Islands is one of the leading financial centres in the world. Additionally, this exposure may aid the company in realizing earnings growth, which could improve its future value and/or payouts to investors.

(Source: JSE and NCBCM Research)

• The Labour Overview of Latin America and the Caribbean report states that after two years of the crisis, the region faces high unemployment and the prospect of an increase in informality. This is owing to the fact that the economic growth recorded in 2021 was insufficient to recover labour markets in the Caribbean and Latin America. 
• 'The labour outlook is uncertain, the persistence of infections due to the pandemic and the prospect of mediocre economic growth this year could prolong the employment crisis until 2023 or even 2024,' said Vinícius Pinheiro, ILO regional director for Latin America and the Caribbean. 
• Despite the strong economic recovery recorded in 2021, with growth above 6%, it was not enough to recover the jobs that were lost. Of the 49 million jobs that had been lost at the worst point of the crisis in Q2 2020, 4.5 million have not yet been recovered. 
• The average regional unemployment rate at the end of 2021 has been estimated at 9.6%, which represents an improvement from the 10.6% recorded in 2020. Nevertheless, the figures still represent a setback compared to the 8% that was recorded for 2019. 
• The ILO highlighted that the forecast of much lower economic growth in 2022, just above 2%, is a clear indication that it will take the region longer to get out of the Covid-19 crisis. Under these conditions, and considering the persistence of the pandemic, the ILO estimates that the unemployment rate this year could fall between 0.2 and 0.3 percentage points, remaining above 9%.

(Source: ILO)

• The Caribbean Development Bank (CDB) says it is moving to create a “financing ecosystem” to support the rescue, recovery and repositioning of the economies of its borrowing member countries (BMCs) to meet immediate needs and propel long-term growth and development. 
• President Dr Hyginus Leon said the institution will marshal financing for a range of innovative instruments that will enable its BMCs to reorder their economies for future growth and prosperity, even while continuing to navigate recovery amidst current challenges. 
• In order to attain the Sustainable Development Goals (SDGs) and the development needs, the region should approach their financing needs in a wholesome manner, addressing both the existing debt stock problem and flow financing for development. He further explained that “This would require a wide spectrum of financing instruments that is underpinned by a strong regulatory environment and a well-developed financial market infrastructure.” 
• Leon outlined several propositions, including contingent debt instruments to incentivise countries to undertake reforms to lower their debt risk, which will make future financing more affordable. He also recommended greater focus on fostering social resilience by leveraging digital technology to enhance health services, and to increase capacity by promoting problem solving, knowledge creation and innovation in regional education systems.

 (Source: Barbados Today)

• The Bank of England (BoE) on Thursday imposed back-to-back interest rate hikes for the first time since 2004 and began the process of quantitative tightening. 
• Markets had broadly expected the 25 basis point rate increase, which the Monetary Policy Committee voted for 5-4 and which takes the main Bank Rate to 0.5%, as the central bank strives to contain soaring inflation. Four members voted to increase rates by 50 basis points to 0.75%. 
• The Bank fired the starting gun on rate rises in December, hiking its main interest rate to 0.25% from its historic low of 0.1%. Since then, data has shown U.K. inflation soared to a 30-year high in December as higher energy costs, resurgent demand and supply chain issues continued to drive up consumer prices. 
• The BoE on Thursday also raised its inflation forecast to an April peak of 7.25% from the 6% projected in its December report. 
• The BoE stuck with past guidance to the market to expect quantitative tightening once the Bank Rate reached 0.5%, reducing its government and corporate bond purchase target by ceasing to reinvest maturing assets. A program of corporate bond sales is set to be completed no earlier than late 2023, which would fully unwind the central bank’s stock of corporate bond purchases. 
• In its report, the MPC said any further tightening of monetary policy will depend on the medium-term prospects for inflation.

(Source: CNBC News)

• The International Monetary Fund’s Managing Director Kristalina Georgieva said it was too early to say if the world was facing a period of sustained inflation, but warned that failure to make economies more resilient to future shocks could lead to big problems. 
• Global policymakers need to carefully calibrate their fiscal and monetary policies in 2022 to factor in varying country-specific conditions, including inflation and the space for additional fiscal support. 
• Unlike the first year of the pandemic in 2020, when finance ministers and central bankers coordinated and synchronized their actions, circumstances varied widely now across the world, and that required more specificity in responses. 
• Georgieva said the COVID-19 pandemic remained the biggest risk facing the global economy, and it was imperative to step up efforts to increase vaccination rates in low-income countries, and meet a global target of vaccinating 70% of people in countries around the world by mid-2022.

(Source: Reuters)

• Permanent Secretary in the Ministry of Tourism, Jennifer Griffith, says 90 per cent of all planned tourism investments remain on track despite the impact of the COVID-19 pandemic. There are currently more than a dozen hotel development projects in progress throughout the different areas of the island. 
• The Government has been undertaking its share of investment in the sector, and is spending billions of dollars to invest in the expansion and rehabilitation of our tourism infrastructure. “This includes improvements to the island’s two major airports and the development of beach facilities, among many other projects,” the Permanent Secretary explained. 
• Moreover, the GOJ is investing in its people as it seeks to drive community tourism experiences that bring the economic benefit of tourism directly into communities around Jamaica. By providing communities with investment opportunities, stakeholders are allowed to expand their local businesses and trade, which will lead to a more resilient tourism sector. 
• These investment projects will aid in the rebound of the tourism sector, which is currently projected to surpass pre-pandemic levels by 2024. It will also support the sector’s contribution to economic growth as the export of services, especially tourism products, will be the main driver of the projected 4.2% growth in the economy in 2022.

(Source: JIS & NCBCM Research)