• Minister of Agriculture and Fisheries, Hon. Audley Shaw has announced millions of dollars in investments in the agricultural sector, with the aim of  improving the sector in areas such as delivering value to stakeholders such as the tourism industry and establishing a fully integrated supply chain operation. 
• Among them is a US$95.0Mn investment to create a certified organic high-tech greenhouse farm in Goshen, St. Elizabeth, which will be the largest, by far, in the region. He informed that the joint-venture project will be undertaken on a 200-acre property over a seven-year period. 
• The US$6.0Mn Just Fruits and Vegetables Ltd. (JFVL) Agriculture Project, will deliver fresh fruits and vegetables for the domestic market, including satisfying demand from the tourism sector. The joint venture equity investment is centred on the establishment of a state-of-the-art fully integrated supply chain operation. The project involves the production, warehousing, cold storage, and multi-channel distribution of fresh produce on the domestic market. 
• Shaw said JFVL’s business model involves the engagement of contract farmers to farm a 600-acre property in Hill Run, St. Catherine, under the company’s direct management, noting that a feasibility study on the project has been completed. In addition, the Minard Estate Farm in Brown’s Town, St. Ann, will be expanded under a public-private and a 500-acre Agro Park will be built in St. Thomas, under joint-venture equity.

(Source: JIS News)

• Rebounding tourism activity in Barbados in Q421, 2022 will underpin stronger services exports and narrow the current account deficit. 
• Fitch Solutions has revised its 2021 and 2022 current account deficit forecasts to 4.7% of GDP and 3.0%, from 5.0% and 3.2% previously, as remittance inflows surprised to the upside in H121. 
• That said, rising import demand in 2022, combined with slowing remittance inflows will partially offset the impact of increased services exports.

(Source: Fitch Solutions)

• While Fitch Solutions forecasts real GNP in Puerto Rico will grow 2.6% in FY2022 (July 2021-June 2022), up from an estimated -0.9% in FY2021, this is a downward revision from its previous forecast of 3.0% as a series of power outages will weigh on growth in H221.   
• Puerto Rico’s strong progress on vaccinations will fuel growth in the near term, while over the medium term, growth will be fueled by robust inflows of federal aid. 
• Growth will decelerate over the latter half of the coming decade, as federal aid fades and structural headwinds return to the fore, though the resolution of Puerto Rico’s bankruptcy offers upside to this long-term forecast.

(Source: Fitch Solutions)

• The life insurance industry is at risk if there is a sharp rise in bond yields, with an extreme situation potentially causing insurers to liquidate investments reaching $1 trillion in the United States and Europe, the International Monetary Fund warned on Tuesday. 
• Vulnerabilities have increased for life insurers, the IMF said in its Global Financial Stability Report, noting the industry is at the "center of fixed income markets" owning about 20% of global bonds and 30% of credit investments. Life insurers have long-dated liabilities and are a critical source of demand for bonds with long maturities, wrote the IMF's Fabio Cortes and Deepali Gautam in the report. 
• A stress scenario of a large and sudden increase in bond yields and corporate spreads could induce mark-to-market losses of 30 percent for insurers in some jurisdictions," the report said, pointing to US and UK insurers particularly sensitive. 
• "This could lead to the emergence of policy surrenders, forcing life insurers to liquidate investments, which, in the extreme, could reach $1 trillion in the United States and Europe."

(Source: Reuters)

• British employers increased their payrolls to a record high in September, shortly before the end of the government's wage subsidies scheme, potentially encouraging the Bank of England's progress towards a first post-pandemic interest rate hike. 
• The number of workers on companies' books rose by the most on record in data going back to 2014, up by 207,000 from August. 
• Employers turned to recruitment agencies to find staff and hotel and food firms created jobs as they recovered from COVID-19 lockdowns. 
• Separate official data published on Tuesday showed the unemployment rate edged down to 4.5% in the three months to August from 4.6% in the May-July period, as expected by economists in a Reuters poll. 
• The BoE is gearing up to become the first major central bank to raise rates since the coronavirus crisis struck. Inflation is heading towards 4% or higher, above its 2% target.

(Source: Reuters)

• Jamaica’s current account surplus is forecasted to grow to 0.8% of GDP in 2021 and fall to 0.6% of GDP in 2022, from a 0.1% deficit in 2020. In Q121, remittance inflows brought in USD742.0Mn which was enough to offset most of the goods trade deficit of USD770.1Mn. 
• This trend is expected to continue throughout 2021, resulting in Jamaica’s first current account surplus since 1994. However, moving into 2022, sustained import demand will begin outweighing the impact of service exports and remittances, narrowing the current account surplus. 
• The goods trade deficit is expected to continue to widen in 2022 as rebounding economic activity leads to import growth of 8.5%. Overall, the goods trade deficit should widen to USD3.6Bn in 2022, up from USD3.2Bn in 2020 and USD2.9Bn in 2021, and will be the largest contributor to the narrowing of the current account surplus in the coming quarters. 
• The rebound of Jamaica's tourism industry is expected to widen the service trade surplus to USD674.9Mn in 2022. Tourist arrivals have increased steadily but are still well below pre-pandemic levels, reaching 166,046 tourist arrivals in June 2021, 54.4% of arrivals in June 2019. With airlines and cruise ship companies announcing the resumption of direct travel to Jamaica starting at the end of 2021, service exports will return close to pre-pandemic levels in 2022. Service export growth is expected to outpace service import growth, reaching 13.0% in 2021 and 14.5% in 2022. 
• The secondary income surplus is projected to continue to widen in 2022 as robust labour markets in the US, UK and Canada boost remittance inflows. Historically, the US accounts for 60.0% of total remittances, while the UK and Canada both accounted for approximately 9.0%. Amid strong recoveries in these markets, remittances have reached historic highs, hitting USD327.5Mn and USD323.6Mn in March and July of 2021, respectively and growth in these markets is forecasted to continue in the quarters ahead. The secondary income surplus is expected to grow by 12.5% in 2021 and 4.5% in 2022, which will partially offset the impact of the wider goods trade deficit on the overall current account balance.

(Source: Fitch Solutions)

• The UK Foreign, Commonwealth & Development Office issued an update removing COVID-19-related restrictions based on the current assessment of risks associated with the pandemic. 
• The news that the United Kingdom Government has lifted its travel advisory against all non-essential travel to Jamaica is a major boost for Jamaica’s economic recovery. 
• The announcement is a major development for Jamaica’s tourism industry, as the UK market is crucial for Jamaica. The announcement will help to fuel arrivals from that market and help drive the recovery of our tourism sector and the Jamaican economy. 
• With the advisory lifted, TUI, the world’s largest tourism company, is expected to restart flights to the island this month, after suspending them in August due to the UK Government’s advice to residents against non-essential travel to the island due to the COVID-19 threat. TUI is the world’s leading tourism group. The broad portfolio gathered under the Group’s umbrella consists of strong tour operators, some 1,600 travel agencies, and leading online portals. It also has five airlines with around 150 aircraft, approximately 400 hotels, about 15 cruise liners, and many incoming agencies in all major holiday destinations across the globe. 
• The minister noted that the resumption of TUI flights and tour services is a much-welcomed announcement for our stakeholders who depend heavily on this major global group, which is the largest carrier of UK tourists to Jamaica.

(Source: JIS News)

• Fitch Solutions forecasts Guyana’s current account deficit will narrow from 11.5% of GDP in 2020 to 6.8% in 2021 and 3.2% in 2022. 
• Guyana’s current account deficit will flip to a surplus in 2023 due to receipts from booming oil exports. 
• Imports are also forecast to also grow as the country emerges from the pandemic and economic activity generates higher demand for foreign goods.

(Source: Fitch Solutions)

• Credit to the private sector continued its “long-term decline” during the COVID-19 pandemic to drop below a sum equivalent to 50% of GDP, Moody’s has revealed. 
• The credit rating agency, in its just-published full country analysis on The Bahamas, highlighted the increasing difficulties companies and individuals are facing in accessing loans by disclosing a more than 15 percentage point slump in total outstanding credit over the past decade - a trend that further worsened due to the fall-out associated with COVID-19. 
• “Credit to the private sector has been on a long-term decline for years, with credit to the private sector falling from around 65% of GDP in 2010 to around 50% by end-2019,” Moody’s said. 
• “The IMF credits the contraction in credit to more stringent lending standards, a low-growth environment keeping demand for credit low, and overall, more caution from banks. This trend persisted in 2020 and 2021, with total outstanding credit in June 2021 flat relative to December 2020, and 4% below that of December 2019.

(Source: Moody’s & The Tribune)

• Fitch Solutions has revised its 2021 global growth forecast from 5.7% to 5.6%, reflecting a further weakening of economic momentum across developed markets (DMs) and emerging markets (EMs). This is a touch weaker than the 5.9% consensus forecast collected by Bloomberg. 
• Despite a more pessimistic view generally, it has revised its projections for the eurozone (from 4.6% to 4.9%) – owing to stronger expected growth in France (5.2% to 5.9%) and Ireland (6.5% to 11.4%). 
• However, downward revisions in Asia (most notably China) and Middle East and North Africa (MENA) have more than offset these upward adjustments. Fitch cut its 2021 growth forecast for China by 0.7 percentage points to 7.8% to reflect a plethora of intensifying headwinds. These include, negative growth spill-overs from Evergrande’s financial difficulties, further outbreaks of COVID-19, Beijing’s regulatory campaign and pursuit of ‘common prosperity’ and power shortages. 
• High-frequency data continue to point to a weakening of growth momentum across DMs and EMs, supporting the view that global growth has peaked. Composite PMIs for both DMs and EMs fell in September, with the EM measure slipping below the neutral 50-mark threshold for the first time since July 2020.

(Source: Fitch Solutions)