• Breadth across equity markets declined sharply in November as the market sold off and positioning turned very bearish, with the American Association of Individual Investors recording a surge in bearish positions. 
• However, the S&P 500 bounced off its 50-day moving average, which has provided support in the past and rallied by approximately 4.0% from the early December low to now. 
• Going forward, however, Fitch believes that the outlook will become more challenging for global equity markets as cross-currents arise due to slower earnings growth, mid-term election risks, and greater uncertainty concerning monetary tightening.

(Source: Fitch Solutions)

• The Inter-American Development Bank (IDB) is commending the Government of Jamaica for its fiscal management of the country. IDB President, Mauricio Claver-Carone, said that the handling of the economy before the COVID-19 pandemic has put Jamaica in a great position to rebound. 
• Claver-Carone said that with the Government’s leadership, the IDB is interested in helping Jamaica accelerate its path to growing out of debt and the pandemic, and is particularly interested in forging new public-private partnerships (PPPs). He pointed out that the more they can work on improving the logistics in terms of transportation, including energy, and the skills of the nation, it will become more attractive to investors. 
• Claver-Carone told JIS News that the IDB is committed to making Jamaica the first choice for investment. He noted that Jamaica’s reputation among global investors is respected. As part of the mission to Jamaica, the IDB President and his team met with the leadership of JAMPRO, where they were able to get an update on the activities that have been implemented to foster growth. The bank is exploring how working with JAMPRO can drive greater investment from the digital services companies to Jamaica.

(Source: JIS News)

• The Bahamas’ national debt was just a few percentage points shy of the size of the economy at the end of September 2021 after increasing to almost $10.5Bn over the previous three months, it was revealed yesterday. 
• The Central Bank’s 2021 third-quarter review revealed that the debt expanded by a net $132.2Mn, or 1.3 percent, during that period to take the Government’s total debt - both its direct liabilities and those guaranteed on behalf of state-owned agencies - to a new high of $10.488Bn. 
• However, the slower pace of debt increase, coupled with increased economic activity, as The Bahamas continued its post-COVID re-opening, grew gross domestic product (GDP) just enough to ensure the latter was marginally bigger than the national debt.  
• The Bahamas’ debt-to-GDP ratio dropped from 100.4 percent at the end-June 2021 to 98.4 percent some three months later, according to the Central Bank. However, it is still at an elevated level that continues to give the Government and many citizens much cause for concern. “The national debt, inclusive of contingent liabilities, expanded by $132.2Mn (1.3 percent) over the three months, and by $1.141Bn (12.2 percent) on an annual basis to $10.488Bn,” the Central Bank report said.

(Source: The Tribune)

• A cash-short and crippled Cuban economy will grow 4% next year as the Communist-run country struggles to recover from an economic crisis, according to a report by the Prime Minister posted over the weekend. 
• Prime Minister Manuel Marrero’s annual report said the economy began a slow recovery of around 2% this year after declining 10.9% in 2020 and stagnating for several years before that. New U.S. sanctions on top of the decades-old trade embargo and the coronavirus pandemic cost the import-dependent nation at least $4Bn in revenues over the last two years, according to the government. 
• The shortfall led to a 40% decline in imports and has hobbled the government's ability to provide Cubans with food, medicine, consumer goods, and inputs for industry and agriculture. Cuba has defaulted on some payments to its creditors and suppliers. 
• The government's decision to devalue the peso for the first time since Cuban leader Fidel Castro's 1959 revolution combined with increased dollarization of the economy have sparked triple-digit inflation estimated by local economists at around 500% this year.

(Source: Reuters)

• Fitch Solutions forecast global economic growth to slow from a multi-decade high of 5.5% in 2021 to 4.1% in 2022 and 3.3% in 2023, which would be broadly in line with the five-year pre-pandemic average of 3.1%. 
• As has been the case over most of the past 12 months, Fitch’s 2022 forecast remains below the Bloomberg consensus estimate of 4.4%, although the consensus seems to be converging slightly lower. 
• The latest purchasing managers' index (PMI) data show that economic momentum remains robust across developed markets (DMs) and emerging markets (EMs), with the number of major DMs and EMs with PMI readings above the crucial 50 mark increasing in recent months. 
• However, several developments have recently emerged which have added downside risks to Fitch 2022 growth forecasts. These include the new COVID19 variant Omicron, more hawkish stances by central banks, and greater financial market volatility.

(Source: Fitch Solutions)

• U.S. consumers' moods brightened unexpectedly in early December with an outsized increase in sentiment among lower-income households, lifting overall sentiment from the lowest in a decade, a survey showed on Friday. 
• The University of Michigan's closely watched Consumer Sentiment Index rose to 70.4 this month from a final November reading of 67.4, which had been the lowest since November 2011. Economists polled by Reuters had been expecting it to slip further, with a median estimate of 67.1. 
• The increase in headline sentiment was powered entirely by a 23.6% improvement among households in the lower one-third of the survey's income distribution, the biggest monthly increase for that group since 1980. This was driven by expectations of improving incomes in the year ahead. Sentiment slipped further for the middle and upper thirds.

(Source: Reuters)

• The Government has committed up to $31.2Bn to build out the public health infrastructure over the next three years, according to the Minister of Health and Wellness, Dr. the Hon. Christopher Tufton. He noted that this level of investment is the most significant for hospital upgrading since independence in 1962. The plan includes the construction and rehabilitation of 13 facilities, comprising ten health centres and three hospitals under the Health Systems Strengthening Programme. 
• Existing structures, built decades ago, cannot meet present demands, and the current environment demands a modern and technologically advanced infrastructure as well as the appropriate human and technical resources. 
• This will ensure that the Jamaican healthcare system has the capacity to respond to a rapidly changing health environment, an ageing population, and high levels of non-communicable diseases (NCDs). NCDs are responsible for over 70.0% of all deaths in Jamaica. 
• The work will be undertaken through funding arrangements with local and international partners such as the National Health Fund (NHF), the European Union (EU), and the Inter-American Development Bank (IDB). 
• This development will position the health sector to more adequately meet the needs of those who require health care services, especially in light of the ongoing COVID-19 pandemic, and, expectations from the World Health Organization that the world is at increased risk of the spread of infectious diseases going forward. It will also help Jamaica advance on its health related vision 2030 plans and should also support continued growth in the construction sector.

(Source: JIS News & NCBCM Research)

• Caribbean Development Bank (CDB) Borrowing Member Countries (BMCs) are being encouraged to institute strong monitoring, compliance, and accountability frameworks to ensure that corruption does not restrict access to climate finance, and to facilitate timely implementation of climate change interventions for the benefit of the region’s citizens. 
• President of the organisation, Dr. Hyginus ‘Gene’ Leon, in making the call, noted that the sizeable financing often required by countries to address infrastructural and economic vulnerabilities and recover from shocks, present opportunities for corruption to surface. Therefore, at all costs, access to affordable climate financing must be protected from maladministration and corruption. 
• He pointed out that, the need for climate finance and favourable access is a “matter of life and death” for most Small Island Developing States (SIDS), including Caribbean countries. The International Anti-Corruption Resource Centre emphasises that corruption is threatening the attainment of global climate change goals. The centre has advocated for the development of appropriate and effective anti-corruption tools and strategies to ensure that climate finance is optimised for impact and success. 
• The matter of corruption is of specific concern to the CDB and is at the forefront of the drive to access affordable climate finance for BMCs. Without adequate and internationally-recognised standards on procurement and other governance mechanisms, the CDB’s ability to mobilise the much-needed private investments will fall short. 
• Instituting suitable systems for accountability and compliance are necessary for building investor confidence and attracting investment to achieve sustainable development.

(Source: JIS News)

• The Bahamas has been urged by the International Monetary Fund (IMF) to “pre-empt” global tax pressures by imposing a corporate income tax designed to suit its own purposes. 
• The Fund, in a report that has generated much political controversy, asserted that “the balance firmly tilts” in favour of The Bahamas getting out ahead of the G-20 and Organisation for Economic Co-Operation and Development (OECD) push for a 15% minimum global corporate tax rate. 
• Suggesting that The Bahamas “impose that same level of taxation” for itself, the IMF said that while this would impact the domestic economy, it would also ensure all corporate income tax revenues go to the Government there rather than their counterparts abroad. 
• The Fund warned that delaying or “abstaining”, from a corporate income tax could “pose reputational risks that can jeopardise the economy”. While Tribune Business has seen documents that back this finding, well-placed sources aware of the IMF report yesterday revealed that it also recommended imposing a personal income tax on so-called “high earners”. 
• This was urged on the basis that Bahamian companies could seek to avoid/evade a corporate income tax by switching their profits to salaries paid to shareholders, senior executives and upper management, thus requiring that both company and personal income be taxed.

(Source: International Finance Corporation)

• The Inter-American Development Bank (IDB) has approved a $100 million loan to support sustainable development in Barbados. The program is the second in a series of three policy-based loans. 
• The program will support maintaining a stable macroeconomic environment and deepen the reforms initiated under the first operation, an $80 million loan approved in March 2020. It provides budget support to strengthen and consolidate public policies focused on improving sustainability in three thematic areas. 
• The first area of policy reform is the regulatory framework for spatial planning, managing the impacts of development activity, and water resource management. Among other initiatives, this covers the development of regulations and plans for the Planning and Development (Amendment) Act of 2020, and progress in regulating Rainwater Harvesting, Water Reuse, and Ground Water Zoning and Protection. 
• It will also foster further development of the regulatory framework for natural asset management, including the approval of the updated Integrated Coastal Zone Management Plan, the Guidelines and Protocols for the Operation of Solid Waste Management Facilities, and the approval of an Integrated Blue Economy Policy Framework and Strategic Action Plan.

(Source: IDB)