• Oil edged higher on Thursday, bolstered by strong demand and concerns about short-term supply disruptions, even though U.S. crude inventories rose for the first time in eight weeks. 
• Brent crude futures were up 18 cents, or 0.2%, at $88.61 a barrel at 1:12 p.m. EST (1812 GMT). The global benchmark rose to $89.17 on Wednesday, its highest level since October 2014. 
• U.S. West Texas Intermediate (WTI) crude futures for February delivery were down 26 cents, or 0.3%, at $86.70 a barrel. The contract, which expires on Thursday, climbed to $87.91 on Wednesday. The more active March WTI contract was up 5 cents to $85.86. 
• Trading has been dominated by supply concerns, from short-term issues like a temporary halt to flows in an Iraq-to-Turkey pipeline to a consistent shortfall from OPEC+ members in reaching targeted supply increases.

(Source: Reuters)

• The Bank of Jamaica (BOJ) completed the first pilot test of Central bank digital currency (CBDC) in early January. Following the tests, Prime Minister, Andrew Holness, spoke confidently about CBDC adoption in the country. He predicted that the majority of the Jamaican population would be quick to adopt the digital currency, with over 70% using the CBDC within five years. 
• BOJ has become a pioneer in CBDC with one of the first completed nationwide pilot projects in the world. After partnering with the Irish cryptography firm, eCurrency Mint, in March 2021, the central bank conducted an eight-month-long pilot. 
• Holness highlighted the benefits of CBDC, which include reduced banking costs and inclusivity, adding that the digital currency would ensure greater government accountability thanks to easier public resources tracking. 
• While admitting the initial challenges of a nationwide CBDC launch, which is aimed for the first quarter of 2022, Holness added that the government has to “figure out how to give people access to digital devices and the internet in general.” 
• BOJ aims to add two new wallet providers, alongside the National Commercial Bank Jamaica Limited for its CBDC, followed by a nationwide rollout in the first quarter of this year. The central bank also plans to focus on interoperability by testing transactions between customers of different wallet providers.

(Sources: Cointelegraph.com & NCBCM Research)

• Fitch Solutions expects that the Dominican Republic will run narrower budget deficits in the quarters ahead as government revenues outpace spending growth. 
• The fiscal deficit is projected at 3.2% of GDP for 2022, from an estimated 3.6% in 2021 and 8.0% in 2020, largely due to a constructive growth outlook that will drive government revenue intake in the coming quarters. 
• Sustained economic growth will drive an 8.4% increase in public revenues in 2022. A steady recovery in tourism, combined with a tightening labour market, will drive revenue growth in the coming quarters. The economy is expected to grow 4.8%in 2022, supporting income growth and value added tax collection. 
• Public debt as a percentage of GDP is expected to fall, from an estimated 58.2% in 2021 to 57.9% in 2022 and 54.8% by 2026, as primary surpluses and sustained growth shrink the country's debt burden. 

 (Source: Fitch Solutions)

• Mia Mottley, who shot to international fame during the Cop26 climate talks and oversaw Barbados’s break with the Queen in November 2021, has won a second term as the Caribbean nation’s prime minister 
• The 56-year-old’s Barbados Labour party (BLP) won all 30 seats, up from 29 in 2018 in an election marred by complaints that thousands of Covid-positive Bajans were denied a vote. 
• Huge crowds celebrated into the early hours of Thursday outside BLP’s headquarters in the capital, Bridgetown, after Barbados’s midnight curfew was lifted for the night. 
• In her victory speech, Mottley said the landslide victory would allow her government to “lead the country first to safety and then to prosperity” and to prepare Barbados for the challenges “of the next 10 to 15 years”. These include climate change and antimicrobial resistance, she said. 
• The Prime Minister has pledged to create thousands of jobs in construction, technology and renewable energy to help the palm-fringed island emerge from the economic slump caused by the pandemic.

 (Sources: The Guardian & NCBCM Research)

• Canada's annual inflation rate accelerated in December to hit a 30-year high, data showed on Wednesday, bolstering expectations the central bank could hike interest rates as soon as next week. 
• Inflation rose to 4.8%, in line with analyst expectations and the highest print since it reached 5.5% in September 1991, Statistics Canada said. It was the ninth consecutive month in which headline inflation topped the Bank of Canada's 1% to 3% control range. 
• Core inflation measures all rose, with the closely watched CPI common measure near a 10-year high at 2.1%. That could fuel bets the central bank will start hiking interest rates next week, despite uncertainty around the impact of the Omicron coronavirus variant. 
• "We have core inflation getting to the upper end of the (Bank of Canada) target range and I think that's going to spook them," said Derek Holt, vice president of capital markets economics at Scotiabank. “The worst thing they can do during the pandemic is to show they are not serious about containing cost of living pressures." 
• The Bank of Canada's benchmark rate has been at a record low 0.25% since the pandemic took hold in March 2020. It previously signaled it could tighten as early as April, but money markets see a roughly 70% chance of a hike on Jan. 26.

 (Source: Reuters)

• U.S. Federal Reserve officials, having plotted what seemed a clear battle plan against high inflation, must now contend with fresh signs the coronavirus is again slowing the economy as well as markets conspiring to tighten financial conditions faster than Fed policymakers may have hoped. 
• The combination of economic data pulling in one direction and investors in another could make the Fed's meeting next week unexpectedly complex as policymakers try to balance continued uncertainty over the health crisis against markets adjusting fast around projections the Fed may need to act even more aggressively against inflation. 
• At next week's two-day meeting on Tuesday and Wednesday the challenge is to acknowledge the economic risks from the virus without diminishing the commitment to fight inflation, or, conversely, of coming off as so concerned about prices that investors expect even stricter policies to come. 
• Investors, so far, have taken the Fed's consensus around rate hikes into consideration. Interest rate futures markets reflect strong odds for as many as five rate increases this year of a quarter percentage point each, and real-world borrowing costs for consumers looking to buy a home, corporations aiming to raise capital and even the U.S. government have shot up as a consequence. U.S. stocks have fallen sharply since the start of the year as investors worry higher rates will hit technology and growth shares.

 (Source: Reuters)

• The country’s unemployment rate fell to a record low of 7.1% for October 2021, according to the Statistical Institute of Jamaica (STATIN) Labour Force Survey. 
• This is 0.1 percentage points lower than the previous 7.2% pre-pandemic outturn recorded in October 2019. The October 2021 figure also represents a 3.7 percentage-points decline, relative to the corresponding period last year. 
• There were 1,234,800 persons employed in October 2021, an increase of 76,600 (6.6%) compared to 1,158,200 employed in October 2020. This increase resulted in the male unemployment rate declining from 8.7% to 5.5%, the female unemployment rate decreasing from 13.2% to 9.0%. 
• The three industries that accounted for the largest increase in employment were Real Estate and Other Business Services; Arts, Entertainment, Recreation and Other Services; and Construction. 
• This reduction in unemployment augurs well for the recovery as it should support an increase in private consumption of goods and services. However, this could fuel greater inflation and increase the likelihood of further rate hikes by the BOJ, to reduce inflationary pressures.

(Sources: STATIN & NCBCM Research)

• For the period January to September 2021, Jamaica’s total spending on imports and earnings from exports increased by 23.3% and 26.3% respectively, relative to the same period in 2020, as reported by the Statistical Institute of Jamaica (STATIN). 
• Imports for the period amounted to US$4,250.3 million compared to US$3,448.4 million for January to September 2020. This increase was mainly attributable to higher imports of Raw Materials/Intermediate Goods (22.2%), Consumer Goods (9.5%), and Fuels and Lubricants (62.2%). 
• Earnings from total exports for January to September 2021 were valued at US$1,150.2 million; 26.3% above the US$910.7 million earned in the similar 2020 period. The increase in exports was driven mainly by higher exports of “Mineral Fuels” which rose by 96.8%. 
• Domestic exports from the Manufacturing industry increased by 32.1%. Earnings from the Mining and Quarrying and Agriculture industries also increased by 6.2% and 7.5%, respectively. However, while the Manufacturing and Agriculture industries should continue to benefit from this in 2022, the Mining and Quarrying will likely see a decline as Jamalco is not slated to restart operations until June 2022. The resumption of operations this year will only be 50% of its production level until Q1 2024 when phase 3 of the restoration process is completed.

(Sources: STATIN & NCBCM Research)

• The Mexican banking sector assets will grow by 2.6% in 2022, down slightly from an expected 3.4% at the end of 2021 according to Fitch Solutions. This is anticipated as the country’s economy rebounds slowly and interest rates rise. 
• Tighter monetary policy, a volatile economic recovery and a stronger Mexican peso (MXN) caused banking assets to shrink in annual terms for the bulk of the year. Though Mexico’s loan portfolio is expected to shrink relative to GDP, loan growth will reach 7.1% from 4.7% in 2021. This growth is primarily driven by inflation averaging 5.9%. 
• Mexico’s loan portfolio will fall to 22.0% of GDP in 2022, from 22.6% in 2021, as a hiking cycle by the Banco de México (Banxico) and greater economic uncertainty weaken demand for credit. Banxico is expected to hike its benchmark rate by 100 basis points to 6.50% by end-2022, with risks to the upside. An increase in the policy rate will lead to higher interest rates, which could balance the falloff in Mexico’s loan portfolio. 
• Furthermore, growth will slow to 2.8% in 2022, from 5.6% in 2021, while the economic policies implemented by President Andrés Manuel López Obrador continue to deter investment.  That said, demand for housing loans will remain a bright spot, likely surpassing growth for business and consumer loans. 
• Over the longer term, Mexico’s solid economic growth and relatively low levels of banking sector penetration will support a multi-year expansion. The recent announcement by Citigroup that it will sell its retail banking operation in Mexico is unlikely to affect the sector’s stability.

• The world tourism industry barely improved last year compared to 2020, with all indicators staying way below pre-pandemic levels and industry professionals not expecting a full recovery before 2024, the World Tourism Organization (UNWTO) said on Tuesday. 
• Rising vaccination rates and the easing of travel restrictions did allow a small rebound in the second half of 2021, Madrid-based UNWTO said in a report, though the spread of the Omicron variant in December triggered another dip in both travel bookings and industry optimism. 
• "The pace of recovery remains slow and uneven across world regions due to varying degrees of mobility restrictions, vaccination rates and traveller confidence," the report said. 
• Global tourism's direct gross product rose 19% in 2021 from 2020 to $1.9 trillion, as each tourist spent more and stayed longer than in 2020. But the tourism industry's revenue still barely surpassed half its 2019 levels. 
• Around 64% of tourism professionals polled by the UNWTO in December do not expect a full recovery before 2024 or later - up from the 45% polled in September when perspectives for travel revival had not yet been marred by Omicron.

(Sources: Reuters)