• Fitch forecasts that the Brazilian economy will grow 0.7% in 2022, down from a 4.6% expansion in 2021, as higher inflation and rising interest rates limit private consumption and investment, and weaker sentiment restrains economic activity. 
• The 2021 outturn of 4.6% was in line with Fitch’s expectations, as robust consumption and private investment led Brazil out of the economic downturn in 2020 that was caused by the COVID-19 pandemic. However, higher inflation will cause private consumption to slow to 1.9% in 2022, from 3.6% in 2021 and will continue to undermine consumer confidence. 
• Inflation is expected to average 8.2% in 2022, compared to 8.3% in 2021 driven by higher food and fuel costs that will limit how much consumers can spend on other goods. Nevertheless, while inflation is expected to slow in H2 2022, it will likely happen gradually. 
• Fitch is slightly more constructive in the medium-to-long term as inflation and interest rates begin to moderate and policy uncertainty will partially abate following the October 2022 general election. As such, growth is forecasted to average 2.1% from 2023 to 2026.

 (Source: Fitch Solutions)

• Fitch anticipates that Prime Minister Philip Davis will prioritise short-term spending measures to bolster the Bahamian national vaccination campaign, which has lagged behind other Caribbean markets. As of February 23, 38.8% of the Bahamian population had been fully vaccinated, and an additional 3.3% had been partially vaccinated. This is well below vaccination rates in the Dominican Republic and many other major tourist destinations in the Caribbean.  
• Additionally, Davis and the Progressive Liberal Party (PLP) will likely advance expansionary fiscal measures in the near term to support the economic recovery from the COVID-19 pandemic. However, In the longer term, the PLP government will likely shift fiscal policy towards consolidation due to wider deficits caused by the pandemic and a rising debt load.  
• Bahamas’ real GDP contracted 14.5% in 2020; however, Fitch forecasts that growth will accelerate to 10.9% in 2022, from an estimated 1.5% in 2021. These forecasts suggest that the Bahamian economy will not fully regain its 2019 level of output until 2024. Notably, Davis said his government will take measures to contain rising prices caused by global inflationary pressures, such as supporting domestic agricultural production. 
• The country’s fiscal deficit widened to 11.4% of GDP in 2020, then modestly narrowed to 10.3% in 2021. Consequently, Fitch expects that the PLP government will likely pursue debt renegotiations with the IMF and other international creditors, though the fiscal adjustment would not likely begin until the Bahamas is nearing its pre-pandemic level of output. 

 (Source: Fitch Solutions)

• U.S. President Joe Biden announced a ban on Russian oil and other energy imports on Tuesday in retaliation for the invasion of Ukraine, underscoring strong bipartisan support for a move that he acknowledged would drive up U.S. energy prices. That means Russian oil will no longer be acceptable in U.S. ports and the American people will deal another powerful blow to Putin's war machine. 
• Oil prices jumped on the news, with Benchmark Brent crude LCOc1 (ICE Brent Crude Energy Future c1) for May climbing by 5.4% to $129.91 a barrel by 1345 GMT. 
• Biden has been working with allies in Europe, who are far more dependent on Russian oil, to isolate Russia's energy-heavy economy and Putin. Britain announced shortly before Biden's remarks that it would phase out the import of Russian oil and oil products by the end of 2022. Biden said sanctions imposed by the United States and its allies had already caused the Russian economy to "crater". He said the latest moves had been made in close consultation with allies and partners around the world. 
• The United States imported more than 20.4Mn barrels of crude and refined products a month on average from Russia in 2021, about 8% of U.S. liquid fuel imports, according to the Energy Information Administration, and the ban is expected to send already high gasoline prices and inflation soaring. The United States also imports a negligible amount of coal from Russia. 
• Biden predicted prices would rise further as a result of "Putin's war," but pledged to do all he could to minimize the impact on the American people. He also warned U.S. gas companies against exploiting the situation to engage in profiteering or price gouging.

(Source: Reuters)

• Gold extended its rally towards a record high on Tuesday, after investors made a beeline for the traditional safe-haven metal on mounting fears around the Russia-Ukraine crisis, with the U.S. and Britain saying they would ban oil from Moscow. 
• Meanwhile, worries over a palladium supply shortfall due to sanctions on Russia, the top producer of the auto-catalyst metal, kept its price near all-time highs. 
• Spot gold was up 2.4% to $2,046.49 per ounce as of 01:36 p.m. ET (1836 GMT), after rising to $2,069.89 earlier in the session, a whisker away from a peak of $2,072.50 touched in August 2020. U.S. gold futures settled 2.4% higher to $2,043.30. 
• David Meger, director of metals trading at High Ridge Futures has said that the combination of soaring energy prices, grain prices, base metal prices have culminated in dramatic inflationary pressures that continue to be the major underlying support behind gold moving higher.

(Source: Reuters)

• Fontana reported a net profit of $309.96Mn for its six months ending December 31, 2021, a 5.5% or $16.17Mn increase relative to the prior period.   
• Much of FTNA’s growth can be attributed to the improvement in its top line as revenues grew by 19.0% but were partially eroded by a 22.2% rise in direct costs. The company’s Waterloo store continued to show very positive year-over-year growth. Additionally, its strategy of building inventory early enabled it to remain fully stocked during the busy holiday season. However, the rise in container freight charges caused by worldwide supply chain challenges translated into a significant expansion in costs and resulted in a slower pace of net profit growth. 
• Going forward, Fontana is expected to see increased demand supported by the recovery and reopening of the economy as well as its new store opening in the Portmore Community. 
• Fontana’s stock price has increased by 32.96% since the start of the calendar year. The stock closed Monday’s trading session at $9.93 and currently trades at a P/E of 23.6x earnings, which is below the Junior Market Distribution Sector Average of 25.8x

(Source: Company Financials)

• Brazil, Chile, and Mexico will release their consumer price inflation this week, and Fitch forecasts that price growth in February will likely remain well above their respective central banks’ target range, potentially accelerating to new multi-year highs, from 10.4% y-o-y, 7.7%, and 7.1%, respectively in January. 
• The recent Russian invasion of Ukraine will likely exacerbate inflationary pressures in H1 2022 in Latin America, as the region continues to face surging global commodity prices and modest domestic production, which have caused food and fuel prices to soar. 
• The agency expects that the Banco Central do Brasil, Banco Central de Chile, and Banco de México will remain hawkish and hike during their next rate-setting meetings in March. 
• Nonetheless, if inflation continues to surprise to the upside, Fitch will likely consider upward revisions to their 2022-year end interest rate forecasts if the central banks view their recent series of rate hikes to be insufficient in containing inflation.

 (Source: Fitch Solutions)

• Despite past challenges, Guyana’s bauxite industry is poised to make a notable ‘comeback’, thanks to its substantial amounts of minerals yet to be extracted. Currently, the country’s bauxite reserves alone are estimated to be worth close to US$1Bn. 
• Notably, although Guyana has been producing top-tier bauxite for decades, it is yet to become a notable aluminium producer; however, this could soon change, as the government pushes ahead to implement a comprehensive energy mix, using ‘renewables’ such as wind, solar, ‘hydro’ and natural gases to produce alternative energy, thereby making manufacturing investments feasible across a myriad of sectors including mining. 
• With the government’s efforts to reduce the cost of electricity, the establishment of a smelter factory would not only be possible, but financially viable as well. Smelting is a process that uses heat and a chemical-reducing agent to decompose the ore, driving off other elements as gasses, or slag, and leaving just the metal behind. A smelter operation would also present the need for an aluminium plant, which would convert the extracted bauxite into aluminium. 
• The government of Guyana has indicated that it is aware of the critical role of the mining sector in the economy, and will continue to invest in, and promote, the expansion of the sector, while also being mindful of the challenges and vulnerabilities, as illustrated during the 2021 floods when operating sites and access roads were inundated and rendered impassable for an extended time. Meanwhile, in its entirety, the mining and quarrying sector is forecast to grow by 86 per cent in 2022, driven by expansion across all subsectors, namely petroleum, gold and bauxite, along with other mining and quarrying.

 (Source: Guyana Chronicle)

• Oil prices jumped on Monday to their highest levels since 2008 as the United States and European allies considered banning Russian oil imports, while it looked less likely that Iranian crude would return swiftly to global markets. 
• Brent rose $5.1, or 4.3%, to settle at $123.21 a barrel, and U.S. West Texas Intermediate (WTI) rose $3.72, or 3.2%, to settle at $119.40 a barrel. During the session, both benchmarks hit the highest since July 2008 with Brent hitting $139.13 a barrel and WTI $130.50. 
• Global oil prices have spiked about 60% since the start of 2022, raising concerns about global economic growth and stagflation. China, the world's No. 2 economy, is targeting slower growth of 5.5% this year. 
• On Sunday, U.S. Secretary of State Antony Blinken said the United States and European allies were exploring banning imports of Russian oil. The White House on Monday said President Joe Biden has not decided on a ban on Russian oil imports. Oil prices could climb to over $300 per barrel if the United States and European Union ban imports of oil from Russia, Deputy Prime Minister Alexander Novak said on Monday.

(Source: Reuters)

• The Biden administration is threatening to add companies to a trade blacklist if they skirt new export curbs against Russia, as it ramps up efforts to keep a vast array of technology out of the country after it invaded Ukraine last month. 
• The U.S. Department of Commerce, which oversees export controls, is mobilizing staff around the globe to halt illicit shipments of computers, aircraft parts, marine equipment and other technology to Russia, partnering with allied countries and U.S. law enforcement agencies like the FBI and the Department of Homeland Security to crack down on the newly illegal trade, according to U.S. officials. 
• The goal is to enforce sweeping new restrictions on shipments to Russia of both U.S. and foreign commodities, technology and software if produced with U.S. equipment, technology or software. The restrictions also apply to Belarus. 
• Already some of the biggest names in tech, like Microsoft Corp (MSFT.O) and Intel Corp, have announced they will halt shipments to Russia. U.S. exports to Russia were under $5.0Bn in 2020, according to the Commerce Department but, a senior official has said, multilateral cooperation means more than $50.0Bn in key inputs to Russia may be curbed.

 (Source: Reuters)

• Output prices for producers within the Mining and Quarrying industry decreased by 0.7% at the beginning of the 2022 calendar year, following an increase of 2.8% in December 2021, as reported by the Statistical Institute of Jamaica (STATIN). However, for the Manufacturing industry, producer prices increased by 2.0%, 1.8 percentage points above the 0.2% recorded in December 2021. 
• The movement in the Mining and Quarrying industry index in January reflects a fall of 0.8% in the index for the heavier weighted major group Bauxite Mining & Alumina Processing. 
• For January, the main contributors to the increase in the index for the Manufacturing industry were the major groups, Refined Petroleum Products up 8.8%, Chemicals and Chemical Products up 1.4% and Food, Beverages & Tobacco grew by 0.5%. 
• For the period January 2021 – January 2022, the Mining & Quarrying industry PPI rose by 40.2%, due mainly to an increase of 41.5% in the index for the major group Bauxite Mining & Alumina Processing. The point-to-point index for the Manufacturing industry moved by up 22.1%. For the 2021/2022 fiscal year, April 2021 – January 2022, the index for the Mining & Quarrying industry increased by 36.2%, while the index for the Manufacturing industry advanced by 14.7%.

(Source: STATIN)