• Barbadian Prime Minister Mia Mottley said on Friday that her government will enter another International Monetary Fund (IMF) programme to raise US$340 million in financial assistance.
• PM Mottley also indicated that she has signed a letter to IMF Managing Director Kristalina Georgieva asking for “discussions and negotiations” to resume.
• The island’s current arrangement with the IMF – a US$290 million Extended Fund Facility (EFF), which supports the Barbados Economic Recovery and Transformation (BERT) plan – ends September 30.
• Mottley noted that a new EFF will allow the government access to US$130 million and will also unlock access to a new funding facility that the IMF has recently established.
• “I am referring to the Resilience & Sustainability Trust, which will make available to us another 150% of quota and probably in the vicinity of US$200 million to US$210 million on top of the US$130 million that we hope to negotiate.” She said the government will be seeking to negotiate a three-year agreement.

(Source: CARICOM TODAY)

• Inflation rose more than expected in August as rising shelter and food costs offset a drop in gas prices, the Bureau of Labour Statistics reported Tuesday.
• The consumer price index, which tracks a broad swath of goods and services, increased 0.1% for the month and 8.3% over the past year. Excluding volatile food and energy costs, CPI rose 0.6% from July and 6.3% from the same month in 2021.
• Economists had been expecting headline inflation to fall 0.1% and core to increase 0.3%, according to Dow Jones estimates. The respective year-over-year forecasts were for 8% and 6% gains. Energy prices fell 5% for the month, led by a 10.6% slide in the gasoline index. However, those declines were offset by increases elsewhere. The food index increased 0.8% in August and shelter costs, which make up about one-third of the weighting in the CPI, jumped 0.7% and are up 6.2% from a year ago.
• Markets had been widely expecting the Fed to enact a 0.75 percentage point rate increase at its meeting next week. Following the CPI release, traders took the possibility of a half-point move completely off the table and even were pricing in a 10% chance of a full percentage point hike.

(Source: CNBC

• The United States is considering options for a sanctions package against China to deter it from invading Taiwan, with the European Union coming under diplomatic pressure from Taipei to do the same, according to sources familiar with the discussions.
• The sources said the deliberations in Washington and Taipei's separate lobbying of EU envoys were both at an early stage - a response to fears of a Chinese invasion that have grown as military tensions escalate in the Taiwan Strait.
• In both cases, the idea is to take sanctions beyond measures already taken in the West to restrict some trade and investment with China in sensitive technologies like computer chips and telecom equipment. 
• The sources did not provide any details of what is being considered but the notion of sanctions on the world's second-largest economy and one of the global supply chain's biggest links raises questions of feasibility.
• China claims Taiwan as its own territory and last month fired missiles over the island and sailed warships across their unofficial sea frontier after U.S. House of Representatives Speaker Nancy Pelosi visited Taipei in what Beijing saw as a provocation.
• Chinese President Xi Jinping has vowed to bring democratically-governed Taiwan under Beijing's control and has not ruled out the use of force. He is set to secure a third, five-year leadership term at a Communist Party congress next month. Taiwan's government strongly rejects China's sovereignty claims.

(Source Reuters

• Jamaica has, this year, recorded the best stopover visitor arrivals figure and foreign exchange earnings for any summer period in the country’s history.
• According to the Tourism Minister, Jamaica recorded 5,000 more visitors than it did in the summer of 2019, which was a record year. Furthermore, total earnings for the period were 20% above 2019.
• At the beginning of 2022, the tourism sector was projected to earn US$3.5Bn and welcome approximately 2.3Mn stopover visitors for the year, to be the Caribbean’s fastest-growing tourist destination. However, considering the outturn to date, projections are now up to 2.6 million projections for stopover visitors, not including cruise passengers, and the projection for earnings is a whopping US$4.2Bn.
• Jamaica is currently tracking ahead of pre-COVID projections, as the country was previously not projected to reach this target until around 2025.
• With this strong performance, the sector continues to be a significant contributor to economic growth, with Jamaica’s economy recording up to five consecutive quarters of growth, thus far.

(Source: JIS News)

• Investment bank JPMorgan slashed its forecast for developing world corporate debt issuance by a third on Monday, the latest sign of the economic pressures poorer countries are now facing.
• The amount of bonds emerging market companies and governments have been able to sell this year has plunged as surging global borrowing costs have left many either unwilling or unable to tap the international markets.
• "We do not anticipate a strong rebound in issuance in the foreseeable future," JPMorgan added, saying that a $260 billion total would be the lowest amount issued by EM firms in a year since 2015.
• Emerging markets have seen one of their biggest ever sell-offs this year as the spike in global inflation, the Ukraine-Russia war and a sharp slowdown in China's economy have all taken their toll on sentiment.
• Emerging market governments meanwhile have sold a combined $67.5 billion worth of debt so far this year, down $60.4 billion on last year's total, analysts at Morgan Stanley calculate. Latin America was also cut by 34% to $41 billion.
• It means the next few months will be crucial for those still looking to plug financing caps. Historically, September is one of the busiest of the sovereign debt calendar as finance ministries finalise their annual borrowing and start to look ahead.

(Source: Reuters)

• Trade and Industry Minister Paula Gopee-Scoon is calling on the international community to work together to address the growing issue of illicit trade in Trinidad and Tobago, which erodes legitimate economic activity.
• The Minister explained that several international organisations and agencies have estimated that hundreds of billions of dollars in illicit commerce, including goods, animals and wildlife, weapons and persons, and illicitly traded consumer goods are produced, transported, and sold every year.
• Notably, Trinidad and Tobago, as a small island developing state, has felt the negative effects of the global investment downturn but remains committed to resetting the economy for growth and transformation. This resolve undoubtedly includes taking a firm stance and deliberate, effective action against illicit trade in all of its forms.
• According to the local private sector, the minister said approximately 22% of imported alcohol was entering Trinidad and Tobago illicitly. Illicit trade does not benefit an economy, rather it threatens the existence of small and medium enterprises apart from depriving the government of revenues for public services. Consequently, Gopee-Scoon emphasised that 'due to the globalised nature of illicit trade, information sharing and cooperation among international bodies and countries is necessary'.

(Source: Trinidad Express Newspaper)

• Britain's economy grew by less than expected in July, raising the risk that it is already in a recession, with the sharp climb in energy tariffs hurting demand for electricity and a leap in the cost of materials hitting the construction sector.
• In the three months to July, GDP was flat compared with the previous three-month. Some economists said Monday's data suggested the economy might be on course to shrink in the July-September period having contracted by 0.1% in the April-June quarter. "This would mean that the UK enters a technical recession for the first time since lockdown restrictions ended," Jake Finney, an economist at PwC, said.
• In August, the Bank of England forecast a recession for the world's fifth-biggest economy lasting from the end of 2022 until early 2024, due in large part to the hit to living standards from energy prices, pushed up by the war in Ukraine.
• But last week Liz Truss announced a cap on domestic energy tariffs which - along with an expected round of tax cuts - reduced the risk of such a protracted hit to the economy, albeit at a cost of 100Bn pounds (US$116Bn) further pressuring Britain's already stretched public finances.

(Source: Reuters)

• Lower gas prices are raising optimism that inflation is on the decline, according to a survey Monday from the New York Federal Reserve. Respondents to the central bank’s August Survey of Consumer Expectations indicated they expect the annual inflation rate to be 5.7% a year from now. That’s a decline from 6.2% in July and the lowest level since October 2021.
• Three-year inflation expectations dropped to 2.8% in August from 3.2% the previous month. That was tied for the lowest level for that measure since November 2020.
• The lowered outlook came amid a tumble in gasoline prices from more than $5 a gallon earlier in the summer, a nominal record high. The current national average is about $3.71 a gallon, still well above the price from a year ago, but about a 26-cent decline from the same point in August.
• Those numbers come as the Fed is using a series of aggressive interest rate hikes to battle inflation that is still running close to a more than 40-year high. The central bank is widely expected to approve a third consecutive 0.75 percentage point increase when it meets again next week.

(Source: CNBC)

• Fitch Solutions forecasts that Jamaica’s current account deficit will grow to 4.2% of GDP in 2022, before shrinking to 2.8% in 2023. Jamaica recorded a current account deficit of USD333.0Bn in Q122, up from USD50.6Bn in Q121, as a wide goods trade deficit offset a recovery in services exports and strong remittance inflows.
• In the year through March 2022, goods imports have already grown 48.0%, strongly outpacing the 5.0% contraction in exports. Import growth thus far in 2022 has been driven by fuels, consumer goods, and food, all of which have become increasingly expensive due to elevated global commodity prices and supply chain disruptions, which particularly affect an island economy like Jamaica.
• Fitch expects the goods trade deficit will remain elevated through 2022, due to weaker mining exports and high import costs which will lead to import growth of 33.0% y-o-y. 
• Moving into 2023, it is expected that further recovery in the service industry, lower commodity prices and robust remittances will narrow the overall deficit.

(Source: Fitch Solutions)

• Preliminary estimates for the second quarter of 2022 (April-June), show domestic crop production growing to 219,667 tonnes, an increase of 7.4% over the corresponding quarter of 2021. This is also an increase over the January to March quarter of 2022, by 3.6%.
• The main crop groups showing increases in the quarter were yams, which grew by 16.5%, plantains by 11.7%, cereals (sweet and regular corn) 11%, vegetables by 10.3%, and potatoes 4.8%.
• The top contributors to production remain the central parishes, with St. Elizabeth contributing 40,889.5 tonnes to the total national production volume, followed by 31,870.3 tonnes from Trelawny.
• The Ministry of Agriculture and Fisheries is undergoing a national campaign to improve Jamaica’s access to sufficient quantities of affordable, nutritious, safe and fresh local produce. The aim is to reduce the country’s food imports, provide jobs, build livelihoods and make a significant contribution to the country’s gross domestic product (GDP).

(Source: JIS)