• 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)

• The Caribbean Development Bank (CDB) is projecting gross domestic product (GDP) growth of 9.1% across its 19 Borrowing Member Countries (BMCs) in 2022, accelerating the region’s economic recovery, which started in 2021. 
• The favourable outlook is anchored by an expected surge in the GDP of commodity-exporting economies by an estimated 17.5% on account of strong growth in Guyana (47.5%), emanating from increased oil and gas production, and a resurgence in energy production in Trinidad and Tobago as supply-side constraints are alleviated. Higher international prices for crude oil should translate into revenue windfall. 
• Service-exporting BMCs are forecasted to gain momentum, growing at an average rate of 4.8%, reflecting the continued inflow of international visitors. It is anticipated that this rebound is likely to strengthen during 2022 as restrictions ease, on account of strengthened protective health measures. However, the return of international passenger arrivals will depend on the acceleration of vaccination rates; effective management of the pandemic without resorting to full and lengthy lockdowns; and continued confidence in protocols established for safe travel to the region. 
• “A key lesson from the impact of the pandemic is that those countries entering the pandemic on a strong macro-fiscal footing fared better in weathering the headwinds. As such, countries are redoubling efforts to achieve debt sustainability despite extant challenges. Others are doing so outside of supported programmes but have established explicit fiscal anchors to function as platforms for macroeconomic policy frameworks.” said CDB Director of Economics Ian Durant.

(Source: CDB)

• The Caribbean Hotel and Tourism Association (CHTA) recommends a concerted effort by Caribbean government and private sector leaders to boost intra-regional travel, while fostering greater parity, clarity and consistency for travel noting the loss of over US$1 billion in 2021 due to a stagnation in travel between the region’s destinations. 
• President Nicola Madden-Greig, asserted that while international travel to the region has rebounded to 75% of pre-pandemic levels, intra-regional business and leisure travel has dropped to around 30%, with smaller Caribbean economies and small businesses hit particularly hard. 
• In an effort to revitalize sluggish local economies the CHTA has taken several steps including; increasing services to revive regional air travel, reducing COVID-19 testing costs, cutting testing time, and shrinking long isolation periods. The Association also made recommendations for an air travel tax/fee holiday or reduction. This recommendation is similar to that which was proposed to Caribbean leaders by Antigua and Barbuda’s Prime Minister, who is leading by example with fee reductions for his country. 
• Additionally, more uniform and consistent regional travel protocols would reduce traveler uncertainty, while health safety diligence and increased vaccinations were key to speeding up the return of local festivals and events, which are key elements of intra-regional travel. 
• Stimulating intra-regional travel would influence higher local spending, boost trade in local goods and services, increase government revenues and revitalize local economies. However, cost is a factor, an initiative by Caribbean leaders to lower travel fees or taxes, which amounts to almost 50% of ticket fee, would lead to greater intra-regional travel. Currently, it is more expensive to travel within the region despite the pandemic which led to a reduction in overall travel expense.

(Source: Barbados Today)

• Euro-area inflation unexpectedly accelerated to a record, overshooting expectations by the most in at least two decades and fueling bets the European Central Bank could raise interest rates earlier than expected. 
• Consumer prices jumped 5.1% YoY, up from 0.9% in January 2021 and 5% in December. The median estimate in a Bloomberg poll of 44 economists saw a reading of only 4.4% and none predicted inflation gaining pace. 
• Money markets now see the ECB lifting rates by 10 basis points by July, rather than by September. The euro extended its advance, climbing 0.4% against the dollar to $1.1315. 
• While slowing in Germany and France, the euro zone’s two biggest economies, the spike in energy costs pulled price growth higher across the 19-member currency bloc as a whole. It was more than a percentage point higher than analysts predicted in Italy, where it accelerated to 5.3%. Stripping out energy and other volatile components like food, core inflation was 2.3%, down from last month’s 2.6% reading. 
• Wednesday’s data come as ECB officials gather to discuss monetary policy against a backdrop of increasingly aggressive tightening by the Federal Reserve and with the Bank of England primed to lift interest rates for a second time in three months.

(Source: Bloomberg)