• Minister of Tourism, Hon. Edmund Bartlett, says the 7,000 airline passengers, who arrived at the Sangster International Airport (SIA) in St. James on December 11, is a prelude of what is to come for the winter season. 
• This was a single day record since the reopening of air travel on June 15, 2020, and Minister Bartlett noted that tourism is rebounding and showing signs of its former strength. Such a large number of air passengers into Jamaica’s largest airport in just one day is a clear indication that demand for Jamaica’s tourism product remains strong. 
• A total of 52 flights from commercial, charter and private aircraft landed at SIA on December 11. Minister Bartlett said that to meet the higher demand for Jamaica, American Airlines recently upgraded the aircraft utilised on flights to Montego Bay from its major city hubs of Dallas/Fort Worth, Miami, and Philadelphia. 
• Based on feedback from several of Jamaica’s key international tourism partners, the country is progressing well on its path to recovery and expects to welcome approximately 1.5Mn visitors this year. This is largely due to the success of the comprehensive JAMAICA CARES programme, which ensures that travelers feel safe and confident in choosing our island for their visits. 
• There has also been an increase in cruise arrivals and that 90% of all planned tourist investments remain on track. Furthermore, the minister said that barring the unforeseen, the sector is set to recover faster than anyone would have predicted 12 months ago. Notwithstanding, the Omicron COVID-19 variant, which is spreading in Jamaica’s key source markets, remains a threat to the anticipated performance of the sector.

(Source: JIS News & NCBCM Research)

• For this week, Fitch Solutions will be watching the development of the Omicron variant of COVID-19 in both Latin America and the rest of the world for potential impacts on the agency’s growth outlook for the region. Latin America has come a long way towards getting the pandemic under control since mid-2021, as new cases have fallen sharply and the regional vaccination rate has pushed towards 80%. 
• However, the first cases of Omicron in the region were reported in late November in Brazil, and it has been identified in seven countries including Mexico, Argentina and Chile as of December 17. Given the variant’s apparent higher transmissibility, there is a significant risk that it causes renewed spikes in cases in the coming weeks. 
• The spread of the variant poses downside risks to Fitch’s forecast for Latin America to see 2.3% real GDP growth in 2022. New outbreaks could cause leaders across the region to re-impose restrictions on mobility. While restrictions on a city or state level would be a blow to private consumption, investment and economic confidence, Fitch does not believe there is sufficient political will to bring back national lockdowns of the intensity seen in Q220. 
• The risk of lockdowns or reduced demand, due to concerns about the virus in many of Latin America’s trading partners, could weigh on commodity prices, demand for exports or remittances, dragging down growth across the region.

(Source: Fitch Solutions)

• Even as Guyana continues to contend with the effects of the COVID-19 pandemic and other external shocks, there has been a notable increase in the number of opportunities for Guyanese nationals, with the latest symbol of this being the approval of 48 private projects which, collectively, have the capacity to create over 2,300 jobs. 
• The local economy has been a magnet for investors who have expressed an interest to invest in massive projects across the various economic sectors. 
• Of the 48 projects which have been approved, 17 are in the services sector, 17 in the manufacturing sector, five in agriculture, four in mining, three in forestry, two in tourism, two in Information and Communications Technology and one in the energy sector.  
• Those project proposals signal the growing interest and confidence in the local economy, from both Guyanese and foreigners. Noteworthy amidst this advancement is the fact that 33 of the approved projects are from locals.

(Source: Guyana Chronicle)

• Wall Street's main indexes dropped more than 1% on Monday in a broad selloff as investors worried about a deluge in COVID-19 cases potentially undercutting the economic rebound. 
• All major S&P 500 sectors were lower as coronavirus cases surged in New York City and around the United States over the weekend, dashing hopes for a more normal holiday season. 
• Britain's leader said he would take more steps to slow the spread of the Omicron coronavirus variant if needed, after the Netherlands began a fourth lockdown and as other European nations considered restrictions. 
• "Typically what happens in Europe is a bit of a preview for what we see in the United States. So, if we see a lot more infections in the U.S., it could stress hospitals, make people less reluctant to get out, spend and partake in the economy. That's definitely a cause of concern," said Chris Zaccarelli, Chief Investment Officer at Independent Advisor Alliance.

(Source: Investing.com)

• The World Trade Organization said on Monday that the global merchandise trade fell by 0.8% in the third quarter, adding that the emergence of the Omicron coronavirus variant had raised the risk of missing the forecast 2021 growth rate. 
• Trade volume slipped between July-September due to supply chain disruptions, shortages of production inputs, and rising COVID-19 cases, the WTO said in a statement on its website. 
• A 2021 growth target could theoretically still be met, it said, but the emergence of Omicron has "tipped the balance of risks towards the downside, increasing the chance of a more negative outcome."

(Source: World Trade Organization)

• For the month of November, the All-Jamaica Consumer Price Index (CPI) remained relatively unchanged. November’s outturn meant that point-to-point inflation was 7.8% in the 12 months to November 2021, down from the 8.5% reported in October 2021. Despite the reduction in inflation for the 12 months to November, it remains outside the BOJ’s target range of 4% to 6%. 
• While there were increases in most divisions, the overall movement in the inflation rate was tempered by a 1.8% decline in the index for the heavily weighted ‘Food and Non-Alcoholic Beverages’ division. Lower prices for some agricultural produce such as yam, tomato, and cabbage, due to improvements in local supplies was the primary driver of the fall in the Food and Non-Alcoholic Beverages Division. 
• That being said, increases were observed in the index for the ‘Housing, Water, Electricity Gas and Other Fuels’ division (+2.8%) due to increases in the electricity, water and sewage rates and the ‘Transport’ division (+0.6%), due mainly to higher petrol prices. 
• According to the BOJ’s forecasts made on November 16, 2021, inflation is projected to average between 5.5% and 6.5% over the next two years. Inflation will continue to breach the upper limit of the Bank’s target range over the next 10 to 12 months with the rate projected to peak in the range of 8.0 per cent to 9.0 per cent over this period. The October 2021 inflation expectations survey published by the BOJ indicated that point-to-point inflation for December 2021 is estimated to be about 7.8 per cent. This represents an upward trend in the results from 7.1% and 6.7% for September and July, respectively. 
• As a means to guide inflation back within the target range over the next two years, the Bank of Jamaica (BOJ) increased its policy interest rate, by 50 basis points to 2.00% per annum, effective 17 November 2021. This is in line with Fitch’s projection of a 2.00% policy rate by the end of this year. The Bank of Jamaica is expected to hike its benchmark interest rate by 75 basis points (bps) to 2.75% by the end-2022 according to Fitch Solutions. 
• Given, its original forecast that the local economy was showing strong signs of recovery local market and the rise in inflation expectations, participants widely expect the BOJ to increase its policy rate when it meets on December 20. However, the emergence of the Omicron variant of the COVID-19 risks presents a downside risk to the local economic recovery. There has been a spike in hotel booking cancellations globally which will threaten the rate of recovery in global tourism, limiting the contribution of the local tourism sector to local economic recovery.

 (Sources: STATIN, BOJ & NCBCM Research)

• Minister of Tourism, Hon. Edmund Bartlett says Jamaica’s tourism recovery will be guided by a “Blue Ocean Strategy” where market boundaries can be reconstructed by the actions and beliefs of industry players. 
• This strategy involves the simultaneous pursuit of differentiation and low cost to open a new market space and create new demand. This will also allow for creating and capturing uncontested market space, making the competition irrelevant. It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by the actions and beliefs of industry players. 
• The strategy will see the Tourism Ministry pursuing enhanced value-creation, through product differentiation and diversification, which will allow Destination Jamaica to be more sustainable, appeal to new markets, and stimulate new demand. 
• Current trends indicate that post – COVID-19 international travellers will prefer sustainable destinations and the pandemic creates an opportunity for global leaders to transition their tourism industries by creating policies that balance economic growth with social and environmental concerns. Minister Bartlett noted that tourism development strategies and practices must be increasingly designed with the view of promoting more resource-efficient initiatives that are aligned with goals of sustainable consumption and production.

(Source: JIS News)

• On December 15,the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Barbados. At the same meeting, the Board also completed the sixth review of Barbados’ economic reform program supported by an arrangement under the Extended Fund Facility (EFF). 
• The completion of the review allows the Barbadian authorities to draw the equivalent of SDR 17 million (about US$24 million), bringing total disbursements to the equivalent of SDR 305 million (about US$425 million). The four-year extended arrangement under the EFF was approved on October 1, 2018, and is for an amount equivalent to SDR 322 million (about US$465 million). 
• Barbados continues its implementation of the comprehensive Economic Recovery and Transformation (BERT) plan aimed at restoring fiscal sustainability, increasing reserves, and unlocking growth potential through structural reforms. 
• The prolonged global coronavirus pandemic, along with the twin natural disaster shocks of volcanic ashfalls from neighboring St. Vincent in April and category 1 hurricane Elsa in July, have added to the challenges faced by the tourism-dependent economy. Reform efforts include enhancing adaptation measures towards increasing vulnerabilities emanating from climate change and natural disasters.

(Source: IMF)

• While the Government can't indicate what the price of cement on the local market would be, Trade Minister Paula Gopee-Scoon yesterday said she believes the increased competition, which will be facilitated from January 2022, would keep prices in check. 
• She was responding to a question in the Senate yesterday from Opposition Senator Wade Mark on what would be the effect on the ultimate price, given Government's measures designed to counter the 15 per cent price increase by Trinidad Cement Ltd (TCL). Citing rising input costs, TCL, on Monday announced that it would increase the ex-factory cost of cement by 15 per cent on Monday, December 20, 2021. 
• Asked by Mark whether Government would seek to incentivize the entry of other players into the local cement market, Gopee-Scoon said the Government would encourage any players to get involved in the manufacture of local cement and would welcome any new entrants into the manufacturing of cement. However, Gopee-Scoon highlighted that there is currently a quota and an import licensing regime in T&T which came into effect in January 2021, under which five companies were registered.

 (Source: Trinidad Express Newspapers)

• The Bank of England on Thursday became the world's first major central bank to raise interest rates since the coronavirus pandemic hammered the global economy, and warned inflation was likely to hit 6% in April - three times its target level. 
• Surprising investors for the second time in six weeks, the BoE said it had to act now, even as the Omicron coronavirus variant sweeps Britain because it saw warning signs in underlying inflation pressures. 
• The nine-member Monetary Policy Committee voted 8-1 to raise Bank Rate to 0.25% from 0.1%, with external member Silvana Tenreyro providing the only dissenting voice. 
• Governor Andrew Bailey said Omicron was already hurting retailers and restaurants but the BoE had felt compelled to stop the recent jump in prices from becoming a longer-term problem.

(Source: Reuters)