• Fitch Solutions maintains its view that real GDP growth in Peru will reach 2.7% in 2022. Growth came in at 1.7% y-o-y in Q3 2022, in line with consensus expectations and a modest slowdown from Q2 2022’s 3.3% print.
• Economic activity was fueled by a sixth round of pension withdrawals in June, which drove stronger domestic demand than in Q2 2022. However, still-weak demand from China for Peruvian copper yielded a contraction in mining sector activity, slowing overall growth during the quarter.
• While activity will continue to moderate in the coming quarters, the Peruvian economy is still expected to grow by 2.5% in 2023, the strongest performance of the region’s major economies for the year.
• The growth will be driven by private consumption which will contribute 2.3 percentage points (pp) to headline growth in 2023, from 4.1pp in 2022 as well as investment growth which is expected to remain largely stable in 2023, contributing 2.4pp to headline growth compared to 2.3 in 2022, as the BCRP begins cutting its interest rate and pro-business policy is preserved by legislative gridlock.
• In addition, the introduction of a new president is anticipated to have a more severe impact on policy direction, including the introduction of less business-friendly initiatives, which would undermine investor confidence and drag on headline growth.

(Source: Fitch Solutions)

• The IMF has projected that the economy of St Vincent and the Grenadines will grow by 5% in 2022, supported by large-scale investment projects and recoveries in tourism and agriculture.
• The Fund made this disclosure at the conclusion of the Article IV Consultation on November 14. Growth is projected to strengthen further to 6% in 2023 as large-scale construction projects get into full swing. 
• The output decline in 2020 was the lowest in the Eastern Caribbean Currency Union (ECCU) and the economy is estimated to have grown by 0.8% in 2021 supported by strong post-volcanic eruption reconstruction activity. However, external inflation pressures are expected to raise the annual inflation to 5.8% in 2022.
• While the primary deficit is estimated to widen as the port construction starts, the primary balance excluding pandemic, volcano, and port-related spending is expected to improve from -0.4% of GDP in 2021 to 1.6% in 2022.
• The outlook is subject to significant downside risks, stemming primarily from an abrupt slowdown in trading partners’ growth, and potential delays in investment projects due to supply chain disruptions, and natural disasters.

(Source: CARICOM Business)

• Tough new sanctions on Russian oil shipments taking effect from December are likely to boost already high tanker rates as buyers race to replace cargoes and are forced to use longer routes, a leading ship manager said.
• In the latest action against Russia in response to its invasion of Ukraine that began in February, the European Union will ban Russian crude imports from Dec 5, and Russian oil products from Feb 5.
• Designed to deprive Moscow of revenues that could finance its action in Ukraine, the measures will force one of the world's top oil producers and exporters to seek alternative buyers further afield.
• Maersk Tankers Chief Executive Christian M. Ingerslev told Reuters he expected demand to be healthy as Russian oil continues to flow but to different markets.
• "With new sanctions coming into place, we expect that Russian oil will continue to be moved. But now the importing countries will not have the short haul distance, it will be a long haul," he said.
• Freight rates have hit record highs in recent weeks and analysts expect them to stay supported for both crude and oil products tankers, potentially driving inflation that has hit multi-decade highs. Ingerslev said the conditions had prompted ship owners from other segments such as dry bulk to invest in tanker assets.

(Source: Reuters)

• Bank lending to eurozone companies held steady, maintaining the sector's biggest borrowing binge in over a decade, despite rising interest rates and a looming recession, European Central Bank data showed on Monday, November 28.
• Lending to businesses in the 19-country euro area expanded by 8.9% in October, unchanged from September when it rose to its highest rate since early 2009, fresh data showed. Household credit growth meanwhile slowed to 4.2% from 4.4%.
• The monthly flow of loans to companies, however, slowed sharply, to 24.0Bn euros from 36.6Bn a month earlier with the flow of short-term loans coming to a standstill.
• Growth in the M3 measure of money circulating in the eurozone, meanwhile slowed to 5.1% from 6.3%, coming below Reuters expectations of 6.2%.

(Source: Reuters)

• Two iconic Jamaican conglomerates, Jamaica Producers Group Limited (‘JP’) and PanJam Investment Limited (‘PanJam’), announced that they reached an agreement that will see the amalgamation of their businesses to create a powerful new group of companies, strategically-positioned to take advantage of opportunities both locally and globally.
• JP was founded as a co-operative of banana growers over 90 years ago but has since emerged as a group that owns food and juice brands along with logistics and shipping services. PanJam is an investment holding company comprising a wholly-owned property management business and investor partnerships in insurance, tourism and attraction development, manufacturing, and real estate development.
• This arrangement, subject to the approval of the shareholders of both companies and the relevant regulators, will result in PanJam acquiring JP’s operating assets in exchange for JP taking a 34.5% interest in PanJam.
• Post-transaction, PanJam, which will ultimately hold the combined businesses, will be renamed Pan Jamaica Group Limited (‘the Group’). JP will emerge as the largest shareholder of the Group, with its shares in the Group being its principal operating asset. Both the renamed Pan Jamaica Group and JP will remain listed on the Main Market of the Jamaica Stock Exchange. The transaction is expected to be completed within the first quarter of 2023.
• The combined balance sheet and experience of both companies will allow Pan Jamaica Group to have an excellent platform for growth in key industries including property and infrastructure, finance, food and logistics. This will in turn capture synergies, bolster profitability, realize economies of scale and improve shareholder value.

(Source: JSE)

• The return of direct flights from Italy is being hailed by local stakeholders as a major boost for air connectivity out of Europe and for the upcoming winter tourist season, which officially starts on December 15. “The addition of these direct flights speaks to the confidence our airline partners have of the destination,” Minister of Tourism, Hon. Edmund Bartlett, told JIS News.
• Government officials, attraction and hotel owners, transport operators, and other business interests, said that the latest development, which saw the inaugural arrival of Neos Airline out of Milan, Italy into Montego Bay on November 20, represents an important sign of recovery since 2019 and the subsequent onslaught of the COVID-19 pandemic.
• The minister expects the return of direct flights to dramatically increase arrivals from Italy, pointing to the 13,000 visitors Jamaica received in 2019. During the upcoming winter season, the airline will connect Italy to Jamaica with two weekly flights.
• This development will further support the recovery of the tourism sector, and contribute to spillover effects to other sectors such as agriculture, manufacturing and transportation, which will in turn drive economic growth.

(Source: JIS News)

• Barbados secured a major “game-changer” contract with the Government of Rwanda to establish a new pharmaceutical industry, the first in the Caribbean.
• “Perhaps the biggest game changer since we have come to the office is about to unfold, and we have been working on it very quietly for the last six months or so, and that is addressing the issue of pharmaceutical equity and creating a platform for jobs, investment and earnings for a pharmaceutical industry in Barbados for the first time,” said Mottley.
• The Government of Rwanda, the European Union, the European Investment Bank, the World Health Organization (WHO), and the Susan Buffett Foundation had already committed to assisting Barbados in establishing the industry.
• The Prime Minister noted that “This has been a major achievement for a small state like Barbados to be able to locate itself centre of the Americas as a location for the development of a pharmaceutical industry.”
• The current deal is expected to provide over 4,000 jobs for Barbadians within the next five years, with a focus on the development of cancer treatment pharmaceuticals, vaccinations, and drugs for women’s reproductive health care difficulties.

(Source: Caribbean News Now)

• The International Monetary Fund (IMF) Article IV consultation with Saint Lucia concluded that having “been severely affected by the Covid-19 pandemic and the increase in import prices due to the war in Ukraine, tourist arrivals have rebounded significantly in 2021–22, but the recovery remains incomplete”
• However, the public balance sheet remains under considerable strain, with a sizeable fiscal deficit and a significant increase in public debt since 2019. On the other hand, the financial sector has remained stable, but nonperforming loans have risen during the pandemic.
• Output is projected to gradually recover to the pre-pandemic level by 2024, slowed by the impacts of the war in Ukraine and the tightening of global financial conditions. However, public and private investments are constrained by weak balance sheets, as well as higher input costs and supply constraints.
• The fiscal outlook is challenging due to high public debt and large refinancing needs which lead to financing constraints. Without additional policy measures, public debt is projected to stabilize at around 90% of GDP in the medium term, limiting the space for public infrastructure and social investments.
• Downside risks dominate, mainly from higher global food and energy prices, global inflation and tightening of financial conditions, supply bottlenecks, and the ongoing pandemic. The natural disaster risk remains a near-term challenge and is expected to intensify with climate change.

(Source: Caribbean News Global)

• Providers of environment, social and governance (ESG) ratings on companies will be asked to apply a voluntary best practice code as a first step to regulating the sector, Britain's Financial Conduct Authority (FCA) said on Tuesday.
• Trillions of dollars have flowed into sustainable investments globally using unregulated ESG ratings on companies as a guide for their 'green' credentials, leaving regulators worried about greenwashing or over inflated ESG claims.
• Britain's government is considering giving the FCA powers to directly regulate ESG ratings providers.
• In the meantime, the FCA said it wants the sector to develop and follow a voluntary code of conduct to increase transparency, ensure good governance and that conflicts of interest are properly managed with sufficiently robust systems and controls.
• The code will reflect recommendations from the global securities regulatory body IOSCO, and developments in Japan and the European Union, the FCA said.

(Source: Reuters)

• The number of Americans filing new claims for jobless benefits increased to a three-month high last week amid rising layoffs in the technology sector, but that likely does not suggest a material shift in labour market conditions, which remain tight.
• Economists urged against reading too much into the rise in weekly unemployment benefit claims reported by the Labor Department on Wednesday, noting the data tend to be volatile at the start of the holiday season as companies temporarily close or slow hiring. Claims remain in line with pre-pandemic levels.
• "It's certainly possible that layoffs are helping to boost increases in claims filings," said Isfar Munir, an economist at Citigroup in New York. "While this could be interpreted as evidence of a softening labour market, we would caution against this. The holiday season introduces a great deal of volatility into this data. It may be hard to disentangle the impact of seasonal patterns versus layoffs until January."
• Initial claims for state unemployment benefits rose 17,000 to a seasonally adjusted 240,000 for the week ended Nov. 19, the highest level since mid-August. Economists polled by Reuters had forecast 225,000 claims for the latest week.
• Moody's Analytics estimates the break-even level for claims at around 270,000. The jobs market has remained resilient in the face of the Federal Reserve's most aggressive interest rate-hiking cycle since the 1980s aimed at curbing high inflation by dampening demand in the economy.
• Morgan Stanley sees the Fed delivering its first rate cut by December 2023, taking the benchmark rate to 4.375% by the end of that year. Barclays sees the rate between 4.25% and 4.5% by the end of next year, following a rate cut.

(Source: Reuters)