• Structural weaknesses in Jamaica's economy are reflected in Fitch’s Short-Term Economic Risk Index (STERI) score of 53.1. This puts Jamaica in the bottom half of the 26 Caribbean countries for which Fitch compiled STERI scores. 
• Investment policy has been poorly targeted and inefficient, presenting a headwind to economic growth, while vulnerability to external shocks, coupled with historically high levels of borrowing, has spurred two sovereign debt defaults since 2010. 
• While the government has already greatly improved the situation under International Monetary Fund guidance, further progress is needed says, Fitch. In the short term, Jamaica faces a slow rebound as the tourism industry continues to regain momentum. The downturn in the sector has weakened US dollar inflows, exerting downward pressure on the value of the Jamaican dollar.

(Source: Fitch Solutions)

• The Minister of Tourism, David Collado, revealed that in January 2022, 530,956 non-residents arrived in the country, 129% more than the previous year, of which 82% were of Dominican origin. Despite the cancellation of flights from the United States to the Dominican Republic due to snowstorms that affected the US East Coast, non-resident arrivals remained above half a million tourists. 
• Collado explained that these indicators show that the country continues to lead the arrival of tourists in the Caribbean; however, the outbreak of the omicron variant and the subsequent tightening of mobility restrictions resulted in fewer Canadian visitors for the country. Non-resident visitors from the rest of the world, excluding the United States and Canada, registered an all-time high of 245,301. 
• Amidst the pandemic, this significant tourism growth may lead to major gains in tourism sector earnings and economic growth by enhancing employment opportunities and fiscal revenues. In terms of employment, this should improve in local communities supporting growth in disposable incomes and socio-economic conditions, which could lead to an improved standard of living.

 (Source: Dominican Today)

• For the last three weeks, The Bahamas has seen a persistent downward trend in the number of Covid-19 cases and hospitalization. However, the Director of the National HIV/AIDS and Infectious Disease Programme, Dr. Nikkiah Forbes cautioned that while this is the case, the behavior of the public will determine whether the trend continues. Consequently, the course of the virus will be very dependent on what is done individually and collectively, the health system, and support for mitigating COVID. 
• Forbes explained that the trend is not cause for complacency as the behavior of the public could still impact the caseload. She pointed out that the spike in infections in early January correlated with the increased social activities and travel over the holiday season — two weeks following the season. 
• The Bahamas, like several other Caribbean countries in the region, has yet to reach a 50% vaccination rate among its population. As of Saturday, 159,839 people had been fully vaccinated in The Bahamas representing around 49% of those eligible to be vaccinated.

 (Source: Eye Witness News)

• The Commerce Department said on Tuesday that the trade deficit increased 27.0% last year to an all-time high of $859.1Bn. The deficit was at $676.7Bn in 2020. Chief economist at FWDBONDS in New York has said that the US trade picture won’t return to normal until the pandemic purchases start to slow and life returns to what it was. 
• The trade gap represented 3.7% of gross domestic product, up from 3.2% in 2020. The economy grew 5.7% in 2021, the strongest since 1984 after the government provided nearly $6.0Tn in pandemic relief, which fueled consumer spending on goods. 
• The goods deficit shot up 18.3% to a record $1.1Tn last year. Imports of goods hit an all-time high of $1.8Tn. They were driven by imports of industrial supplies and materials, which increased to their highest level since 2014. Food imports were the highest on record as were those of capital, consumer, and other goods. There were record imports from 70 countries in 2021, led by Mexico, Canada, and Germany. 
• Robust import growth overshadowed a sharp rebound in exports. Goods exports surged 23.3% to a record $1.8Tn. Exports of industrial supplies and materials, foods, consumer goods, other goods, and petroleum were the highest on record. 
• The United States logged record exports to 57 countries last year, led by led by Mexico, which increased to $276.5Bn. Shipments to China rose to $151.1Bn, while exports to South Korea increased to $65.8Bn.

(Source: CNBC News)

• Consumers ended 2021 with record levels of debt, leading into a year in which interest rates are expected to rise substantially. Total U.S. consumer debt at the end of the year came to $15.6Tn, a year-over-year jump of $333.0Bn during the fourth quarter and just over $1.0Tn for the full year, according to data released Tuesday from the Federal Reserve’s New York district. 
• The quarterly rise was the biggest since 2007, and the annual gain was the largest ever in records going back to 2003. 
• The news comes ahead of a period in which the Fed is expected to start jacking up interest rates as it looks to tamp down inflation, which is running at its fastest pace in nearly 40 years. Markets expect the central bank to start increasing rates in March, the first of at least five bump-ups this year, totaling 1.25 percentage points. 
• Fed interest moves are directly tied to the prime rate that consumers pay for many forms of debt, including credit cards and adjustable-rate mortgages. A large chunk of the debt-load increase came from mortgages, which saw balances rise by $890.0Bn for the year and $258.0Bn in the fourth quarter, to nearly $11.0Tn. Mortgage originations for the year totaled more than $4.5Tn, a new record. Credit card balances increased by $52.0Bn in the final three months of the year, a new quarterly record that brought total debt in that category to $860.0Bn. 
• Owing to the rapid gain in prices, auto-loan balances rose by $90.0Bn, or 6.6%, to $1.46Tn. New auto prices rose 11.8% for the year while prices for used vehicles soared by 37.3%, according to Labor Department data. 
• One area that saw little increase was student loans, which edged higher by just $20.0Bn for the year and declined marginally in the fourth quarter. Forbearance programmes, though mostly expired, are still keeping balances and delinquencies in check. 
• The rising-rate environment could affect household cash flows as borrowers adjust. Those who locked in at low mortgage rates, for instance, are likely to be reluctant to go out and buy new homes with rates moving higher, while those who ran up credit card balances could be constrained as financing costs increase.

(Source: CNBC News)

• For its first quarter ending December 31, 2021, SALF reported net profit attributable to shareholders of $41.92Mn, a 219.9% ($28.82Mn) increase relative to the corresponding period last year. 
• Bottom-line growth was supported by a higher revenue outturn. Revenues increased by 27.8% or $62.99Mn for Q1 driven by strong domestic and export sales across its range of products. Though direct expenses increased by 16.9%, gross margin improved by 6.3 percentage points as revenue growth outpaced the growth in direct expenses. 
• Sales and promotional expenses increased by 32.4% as the company ramped up targeted marketing activities for key consumer groups. Additionally, the company saw a 12.7% increase in admin expenses.  Against this background, operating profit for the quarter increased by 162.1% to $43.16Mn from $16.47Mn. 
• Net finance income saw a 916.1% increase which was mainly supported by an increase in foreign exchange gains which, also contributed to the company’s bottom line. 
• SALF stock price has risen 3.81% since the start of the calendar year. The stock closed Monday’s trading session at $6.86 and currently trades at a P/E of 38.1x earnings, which is above the  Main Market Distribution & Manufacturing sector average of 19.1x.

(Sources: JSE and Company Financials)

• Fitch Solutions expects the Jamaican economy to rebound quicker in 2022 than in 2021 as the tourism sector growth is set to accelerate in H222, with real GDP projected to grow by 4.2% for 2022. As a small, open economy, the pace of Jamaica's rebound will depend on how quickly global economic activity recovers.  In particular, the rollout of vaccinations in the US and Europe, key source markets for tourism, exports, and remittances will determine how Jamaican real GDP growth rebounds in 2022. 
• Over the medium term, however, Fitch expects Jamaica to see stronger economic performance following a reform programme that will put the country on a more sustainable growth trajectory. 
• After poor economic governance led to two sovereign debt defaults since 2010, Jamaica is now closely coordinating policy with the IMF in a bid to improve its business environment, rein in government spending, diversify its economy and reduce its external vulnerabilities. 
• As a result of recent and upcoming initiatives, Fitch is forecasting that real GDP growth will average 2.4% over the next decade. This remains significantly above the average of just 0.2% over the past 10 years.

(Source: Fitch Solutions)

• 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)