• Exports from Guyana fells from 68.1% in 2021 to 16.8% last year, a new report from the Inter-American Development Bank (IDB) stated. According to the Bank, the value of goods exports from Latin America and the Caribbean increased at an estimated rate of 18.8% in 2022, which represented a sharp decline. The downward trend in the region’s external sales contracted during this period, after growing 27.8% in 2021, according to a report by the IDB.
• The region’s export performance was mainly explained by higher prices, while volumes lost momentum. In the coming months, the export growth rate is expected to slow in response to the downward trend in commodity prices, the war in Ukraine, restrictive monetary policies to reduce inflation and the slowdown in global growth.
• The latest edition of Trade Trends Estimates: Latin America and the Caribbean has found that “After a rapid recovery in 2021, a series of global shocks have sent exports from Latin America and the Caribbean into a slowdown that will continue into 2023. Reversing this trend will be key to shoring up economic growth in the region,” said Paolo Giordano, Principal Economist at the IDB’s Integration and Trade Sector.
• The region’s external sales were driven by shipments to the United States, which are estimated to have grown by 21.3% in 2022. Demand from the rest of Latin America and the Caribbean’s major trading partners slowed dramatically compared to 2021. Sales grew by 2% to China, 14% to the European Union, and 25.6% to Latin America and the Caribbean.
• Exports from the Caribbean rose by an estimated 38% in 2022 after growing by 44.4% in 2021. The United States accounted for most of the increase, followed by the European Union. Latin America and the Caribbean’s total imports increased at an estimated rate of 26.3% in 2022, after growing by 37.4% in 2021.

(Source: Kaieteur News)

• The Caribbean Tourism Organisation (CTO) is urging Caribbean nations to keep the momentum of tourism in the region to be able to join the top five of the world’s fastest-growing economies that rely heavily on tourism.
• CTO’s acting secretary-general Neil Walters disclosed that the organisation has come up with ways to maintain the momentum that the tropical region has gained post-pandemic. Walters said that in 2022, the “Caribbean was among the fastest-recovering region globally” and would have “reclaimed between 85% and 90% of total arrivals in 2019.” He expects the arrivals to equal or exceed these levels in 2023.
• To achieve this, Walters is eyeing to tap markets other than the United States, United Kingdom, and Europe. “To date, the majority of our efforts have been focused on traditional markets, resulting in the significant recovery outlined above,” Walters said.
• Some Caribbean nations are already aligning their tourism agenda to the CTO’s call. The small island of Dominica, for example, is keeping its tourism eco-friendly and close to nature with its massive support on eco-tourism. The government has been developing eco-resorts with the funds generated through the Citizenship by Investment Programme (CBI). 
• The CBI programme also funds Dominica’s first international airport, which is expected to be up and running by 2026. The country hopes to usher in more tourists with the international airport, as it reduces the travel time for international visitors coming into the island.

(Source: Caribbean News Now)

• Oil prices rose 3% to a one-week high on Wednesday as hopes for an improved global economic outlook and concern over the impact of sanctions on Russian crude output outweighed a massive surprise build in U.S. crude stocks. Much of the market's optimism was pinned on top oil importer China's reopening of its economy after the end of strict COVID-19 curbs.
• Brent futures rose $2.46, or 3.1%, to $82.56 a barrel by 1:14 p.m. EST. U.S. West Texas Intermediate (WTI) crude rose $2.33, or 3.1%, to $77.45. That put both benchmarks on track to close the day at their highest since Dec. 30 with WTI up for a fifth day in a row for the first time since October 2022 and Brent up for a third day in a row for the first time since December 2022.
• The U.S. Energy Information Administration (EIA) said crude inventories jumped by 19.0 million barrels last week, the third biggest weekly gain ever and the most since stocks rose by a record 21.6 million barrels in Feb 2021. Last week's increase came as refiners were slow to restore production after a cold freeze shut operations in late 2022. That compares with the 2.2 million-barrel decline in crude stocks that analysts forecast in a Reuters poll and industry data from the American Petroleum Institute (API), showing a 14.9 million-barrel build.
• An international price cap imposed on sales of Russian crude took effect on Dec. 5 and more curbs aimed at product sales are set to come into force next month as the European Union keeps working on more sanctions against Moscow over the invasion of Ukraine. Russian Deputy Prime Minister Alexander Novak said the country's oil producers have had no difficulties in securing export deals despite Western sanctions and price caps.
• EIA said the upcoming EU ban on seaborne imports of petroleum products from Russia on Feb. 5 could be more disruptive than the December 2022 EU ban. EIA also forecast that U.S. crude production will reach all-time highs in 2023 and 2024.

(Source: Reuters)

• The World Health Organisation said a lack of data was making it challenging to help China manage the risks of a COVID-19 surge over the Lunar New Year holiday, as the world's second-largest economy reopens after three years of isolation. The holiday, known before the pandemic as the world's largest annual migration of people, comes amid an escalating diplomatic spat over COVID curbs that saw Beijing introduce transit curbs for South Korean and Japanese nationals on Wednesday.
• The virus is spreading unchecked in China after Beijing abruptly began dismantling its previously tight curbs in early December following historic protests. The WHO said it still does not have enough information from China to make a full assessment of the dangers of the surge while China says it has been transparent with its data.
• China removed quarantine mandates for inbound travellers on Sunday, one of the last vestiges of the world's strictest regime of COVID restrictions. But worries about the scale and impact of the outbreak prompted more than a dozen countries to demand negative COVID test results from people arriving from China. Among them, South Korea and Japan have also limited flights and require tests on arrival, with passengers showing up as positive being sent to quarantine. In South Korea, quarantine is at the traveller's own cost.
• In response, the Chinese embassies in Seoul and Tokyo said on Tuesday they had suspended issuing short-term visas for travellers to China, with the foreign ministry slamming the testing requirements as "discriminatory."

(Source:Reuters)

• PJAM has advised of the sale of its 33.3% stake in New Castle Company Limited (New Castle) effective December 21, 2022. New Castle manufactures and distributes jerk sauces and seasonings, and other condiments under the brands Walkerswood, Busha Browne’s and Jamaica Joe, which it owns.
• According to Joanna Banks, PanJam’s Chief Executive Officer: “Our investment in New Castle was in line with PanJam’s strategy to take meaningful equity positions in Jamaican companies with strong brands, foreign exchange earning potential, and a global reach. New Castle has certainly carved a niche for itself in the specialty food space. While we expect the company to continue on its growth trajectory, PanJam’s investment objectives have been met.”
• While the final sale amount was not disclosed, a gain on sale of the shares would result in an extra boost to profit for the financial year ended December 2022. On the other hand, a loss on sale of the shares would negatively impact PJAM’s bottom line.

(Source: JSE)

• iCreate Limited announced its intention to graduate to the Main Market of the Jamaica Stock Exchange in 2023. On December 14, 2022, iCreate issued and listed 641,125,000 new additional ordinary shares on the JSE.
• In doing so, the Company has increased its subscribed participating voting share capital by $641,125,000.00 upon the conversion of debt worth of $650Mn to equity, which was completed at the conversion rate of One Jamaican Dollar ($1.00) per share.
• With the recent increase in share capital, iCreate now has a participating voting share capital issue of $765,741,070.00 which has exceeded the $500,000,000.00 threshold prescribed by JSE Junior Market Rules.
• As a result, iCreate advised its shareholders that the Company will take the necessary steps to apply for listing on the Main Market of the JSE. This move is in keeping with the Company’s vision and the overall goal of becoming a group of Companies through the numerous Merger and Acquisition (M&A) initiatives which will continue into 2023.
• A move to the Main Market of the JSE would mean that iCreate would no longer benefit from the tax benefit of being listed on the Junior Market of the JSE. Junior Market companies receive a full tax break after the first five years of listing and a 50% tax holiday in years 6 to 10. This has the potential to negatively impact the net income of the company.

(Source: JSE)

• On January 8, 2023, supporters of former conservative President Jair Bolsonaro broke into the Congress, the Supreme Court and the presidential palace in Brasilia. This happened following the inauguration of left-wing President Luiz Inácio Lula da Silva (Lula) on January 1.
• The storming of government buildings appears to be a delayed reaction to Lula’s narrow victory on October 30, after which Bolsonaro challenged the results of the presidential run-off election.
• Notably, Fitch forecasted that protests by Bolsonaro’s supporters have increased the risk of disruptive demonstrations. In the event of persistent and violent protests, the Agency would lower Brazil’s score in its Short-Term Political Risk Index (STPRI), specifically in the ‘social stability’ component score, which is currently 40 out of 100. The overall score stands at 53.3 out of 100.
• The forced entry by protesters into Brazil’s key federal government buildings reveals serious security breaches and increased risk to social stability as many of Bolsonaro’s supporters do not accept the presidential election outcome.
• Despite the peaceful transfer of power during the inauguration of President Lula, the violent protests demonstrate the deep polarisation and division that Brazil is facing.

(Source: Fitch Solutions)

• Mexico's headline inflation ended 2022 slightly below analysts' expectations, while core inflation finally appeared to have peaked, data from the national statistics agency showed on Monday Jan. 9.
• Annual headline inflation in December reached 7.82%, up moderately from 7.80% in November, but still below the record 8.70% reached in August and September.
• Meanwhile, the core index, which strips out some volatile food and energy prices, hit 8.35% on an annual basis in December, dropping from November's 8.51%, and the first slowdown since its stubborn upwards cycle began. Economists polled by Reuters had expected annual headline inflation to come in at 7.86% and core inflation at 8.36%.
• Inflation has blown past the Bank of Mexico's target rate of 3%, plus or minus one percentage point, prompting it to increase its key lending rate by 650 basis points to 10.50% during the current hiking cycle, which began in June 2021. The central bank is now considering another interest rate hike at its next monetary policy meeting scheduled for Feb. 9, according to the minutes of its last board meeting.
• Jason Tuvey, Senior Emerging Markets Economist at Capital Economists, said that the core index data showed progress, and expected the Bank of Mexico to slow the pace of its rate hikes at the next meeting.

(Source: Reuters)

• Bank of England Chief Economist Huw Pill said on Monday that Britain is at risk of persistent inflationary pressure from a tight labour market, even if natural gas prices stabilise or fall, implying further rate rises may be needed. Pill's speech - the first on monetary policy this year by a BoE official - comes as economists and markets speculate about how near the BoE is to the end of its rate-rising cycle.
• The BoE raised its main interest rate to 3.5% in December, up from 0.1% a year before, and financial markets expect the central bank to raise rates again to 4% at its next policy announcement on Feb. 2. Markets see BoE rates peaking at 4.5% in June, while economists polled by Reuters in December predicted a peak of 4.25% in the second quarter of 2023.
• Inflation has fallen slightly from a 41-year peak of 11.1% in October, and Britain's economy appears to be entering a shallow recession. Pill said Britain was "starting to see labour market indicators turn" as job vacancies fell from record levels and unemployment, which had been at its lowest since the 1970s, edged higher.
• The BoE also forecast headline inflation will fall this year as natural gas prices level off. Natural gas prices in Britain, which spiked in response to Russia's invasion of Ukraine last February, have retreated to around the same level as a year ago, but are several times higher than in early 2021.
• Pill said that even if natural gas prices eased further, that would not guarantee that underlying price pressures would fall enough for inflation to return to its 2% target.

(Source: Reuters

• The World Bank slashed its 2023 growth forecasts on Tuesday to levels teetering on the brink of recession for many countries as the impact of central bank rate hikes intensifies, Russia's war in Ukraine continues, and the world's major economic engines sputter. The development lender said it now expected global GDP growth of 1.7% in 2023 -- the slowest pace outside the 2009 and 2020 recessions in nearly three decades. In its previous Global Economic Prospects report, in June 2022, the bank had forecast 2023 global growth at 3.0%
• The bank said major slowdowns in advanced economies, including sharp cuts to its forecast for both the United States and the eurozone, could foreshadow a new global recession less than three years after the last one. "Given fragile economic conditions, any new adverse development -- such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic or escalating geopolitical tensions -- could push the global economy into recession," the bank said in a statement accompanying the report.
• The bleak outlook will be especially hard on emerging market and developing economies, the World Bank said, as they struggle with heavy debt burdens, weak currencies and income growth, and slowing business investment that is now forecast at a 3.5% annual growth rate over the next two years -- less than half the pace of the past two decades.
• The World Bank noted that some inflationary pressures started to abate as 2022 drew to a close - with lower energy and commodity prices, but warned that risks of new supply disruptions were high, and elevated core inflation may persist. This could cause central banks to respond by raising policy rates by more than currently expected, worsening the global slowdown.

(Source: Reuters)