• The Grenada Tourism Authority announced that for the third consecutive month commencing in September, visitor arrivals showed a significant increase over the benchmark year of 2019. Data suggested that November 2022 saw the highest arrivals, with a total of 14,232 visitors, representing a 17% increase over 2019 figures.
• Notably, the USA market has shown the strongest rebound and represents 61% of overall visitation. The market is anticipated to finish 2022 with a 2% growth over 2019 which, given the fact that Grenada opened its ports only in April of this year, shows how strong the recovery has been.
• CEO of the Grenada Tourism Authority Petra Roach stated, “During the pandemic, we did a lot of groundwork putting systems in place to create a more efficient operation and evaluate our activity.” Since then, the country’s digital footprint has expanded significantly, which has given the country a much more cost-effective marketing reach.

(Source: Now Grenada)

• British Prime Minister Rishi Sunak is poised to halve financial support on energy bills for businesses, amid concerns about the cost, The Times reported.
• Former Prime Minister Liz Truss had announced in September a six-month scheme to subsidise the wholesale price for businesses. UK Chancellor Jeremy Hunt "will announce a 12-month extension to the scheme but with the level of support more than halved, amid concerns about taxpayers' exposure to fluctuating energy prices.
• The report comes after British public borrowing during last month hit its highest (£22bn versus £13.9Bn in November 2021) for any November on record, reflecting the mounting cost of energy subsidies, debt interest and the reversal of an increase in payroll taxes.
• The new scheme is expected to cost less than £20Bn ($24.09Bn) over 12 months, compared with £40Bn for the existing one, the report added.
• The businesses would get a discount of up to £345/megawatt hour of electricity and £91/megawatt hour of gas.

(Source: Reuters)

• Bank lending to euro zone companies slowed in November, easing back from the sector's biggest borrowing binge in over a decade as rising interest rates and a looming recession appear to be taking a toll, European Central Bank data showed on Thursday.
• Lending to businesses in the 19-country euro area expanded by 8.4% in November after an 8.9% reading a month earlier, while household credit growth slowed to 4.1% from 4.2%.
• The monthly flow of loans to companies was also sharply lower at minus 1 billion euros after a 24 billion euro reading a month earlier.
• Growth in the M3 measure of money circulating in the eurozone slowed to 4.8% from 5.1%, coming below expectations for 5.0% in a Reuters survey.

(Source: Reuters

• Jamaica is looking to forge closer ties with Cuba for the further development of the local agriculture sector. Minister of Agriculture and Fisheries, Hon. Pearnel Charles Jr said there is potential for the countries to join efforts in research and development for pest and weed management and alternatives for animal feed and fertilisers.
• “These are areas of focus because they directly impact our capacity for increased and improved production and will be a focus as we, in Jamaica, drive our ‘Grow Smart, Eat Smart’ strategy, which we welcome Cuba to join,” he said. “Another important area of continued collaboration that can be better refined is engagement as it relates to the expertise for the repair of equipment used in farming operations,” Minister Charles Jr. added.
• Minister Charles Jr. reiterated the Government’s commitment to exploring all viable options to advance agriculture and ultimately, achieve food security.
• Jamaica and Cuba have enjoyed friendly relations over the last 50 years, with thousands of students benefiting from tertiary education, including specialised training in the field of agriculture.
• The Ministry continues to prioritise its ‘Grow Smart, Eat Smart’ strategy, which aims to expand the sector’s growth and sustainability, achieve food security and reduce the food import bill.

(Source: JIS News)

• Fitch expects that lower gas prices will cause Trinidad & Tobago’s (T&T) current account surplus to narrow from 13.3% of GDP in 2022 to 10.9% of GDP in 2023. This change will be mostly due to the narrowing trade surplus, which is expected to shrink from 18.8% of GDP to 17.0% of GDP.
• The trade surplus will continue to narrow over the longer term, though the overall current account balance will remain in surplus throughout the forecast period. The 2022 surplus was boosted by elevated energy exports, which were even higher than expected. Notably, Fitch revised its 2022 current account forecast from a surplus of 6.3% of GDP to 13.3% of GDP after goods exports rose 159.0% y-o-y in Q1 2022.
• On the other hand, exports are forecast to fall. Fitch expects that goods imports will be essentially flat in 2023, (+1.0%). The rising cost of imported food and refined fuels caused T&T’s import bill to rise by 29.8% in 2022. In 2023, however, softer commodity prices will reduce this pressure. Commodity prices will slip but remain strong, and it is also expected that private consumption will stay strong and keep imports sticky.
• The services trade deficit will widen from 4.3% of GDP in 2022 to 6.0% in 2023, as slowing global growth cuts demand for international travel. The lifting of pandemic-related lockdowns and travel restrictions caused the transport and tourism sectors to recover, narrowing the service trade deficit in 2022.
• T&T’s wide current account surplus allowed the country to accumulate foreign exchange reserves in 2022, and this is expected to continue in 2023. T&T’s reserves are anticipated to remain well above 8.0 months of import cover through 2023, due to consecutive future current account surpluses, underpinning continued external account stability.
• Risks to the forecast remain slightly to the downside. Energy prices are expected to stay well above pre-COVID levels. However, if energy prices fall below Fitch’s current expectations next year, the current account surplus will be much narrower than currently anticipated.

(Source: Fitch Solutions)

• The Central Bank of the Dominican Republic reported that the monthly indicator of economic activity (IMAE) registered an accumulated growth of 5.0% in January- November 2022 when compared to the same period the previous year, after incorporating the interannual variations of 3.8% in October and 2.9% in November of the current year.
• The Dominican economy’s trend throughout the year reflects a moderation in its growth rate in recent months, as increases of 6.1%, 5.1%, and 5.0% were recorded in the first three quarters of the year, respectively.
• The slowdown in domestic demand, primarily from the investment component, is due to high raw material and construction material costs, as well as the operation of the monetary policy transmission mechanism aimed at reducing inflationary pressures.
• In this regard, the results of the Central Bank forecast system indicate that actual gross domestic product (GDP) growth will be around 5.0% by the end of 2022. In terms of nominal GDP, it is expected to reach approximately US$113Bn, contributing to the consolidated public sector debt falling below 60% of GDP by the end of the current fiscal year.

(Source: Caribbean News Now)

• Contracts to buy U.S. previously owned homes fell far more than expected in November, diving for a sixth straight month in the latest indication of the hefty toll the Federal Reserve's interest rate hikes are taking on the housing market as the central bank seeks to curb inflation.
• This month, the Fed raised rates again by half a percentage point, capping a year that saw its benchmark rate shoot from near zero in March to between 4.25% and 4.5%.
• The National Association of Realtors (NAR) said on Wednesday, Dec. 28, its Pending Home Sales Index, based on signed contracts, fell 4% to 73.9 last month from October's downwardly revised 77.0. November's was the lowest reading - aside from the short-lived drop in the early months of the pandemic - since NAR launched the index in 2001.
• The housing market has suffered the most visible effects of aggressive Fed interest rate hikes that are aimed at curbing high inflation by undercutting demand in the economy. By the Fed's preferred measure, inflation is still running nearly three times its 2% goal, having risen earlier in 2022 at its fastest pace in 40 years.
• Unlike other parts of the economy - many of which have yet to show a significant impact from the Fed's actions - the housing market has reacted in near real-time to the jump in borrowing costs engineered by the central bank.

(Source: Reuters)

• Global equities edged lower on Wednesday, Dec. 28, while oil prices tumbled as investors weighed their enthusiasm about the potential economic boost from China lifting COVID restrictions with concerns about rising infections there.
• China's government announced on Monday, Dec 26, 2022, that it would stop requiring inbound travellers to go into quarantine starting from Jan. 8. While China's health system has come under heavy stress from the lifting of restrictions so far, strategists at JP Morgan forecast a "likely infection peak" during the Lunar New Year holiday next month, followed by a "cyclical upturn after nearly three years of on and off restrictions."
• MSCI's broadest index of global stocks was flat as investors stayed on the sidelines close to the end of a brutal year for equities. The global index is on course to end 2022 down about 20%, in its biggest percentage decline since 2008, during the financial crisis.
• Oil prices dipped as traders weighed concerns over the surge in COVID cases in China against the easing of restrictions in the world's top oil importer, which had fuelled some hopes for a demand boost. U.S. crude fell 2.34% to $77.67 per barrel and Brent was at $82.29, down 2.42% on the day.

(Source: Reuters)

• Consistent with its November 2022 announcement, the Monetary Policy Committee (MPC) has unanimously decided to maintain the policy interest rate at 7.00%, effective 21 December 2022. The MPC also decided to continue containing Jamaican dollar liquidity expansion and maintaining relative stability in the foreign exchange market.
• The MPC’s decision was based on the incoming data being generally favourable for the inflation outlook. Jamaica’s inflation rate at November 2022 of 10.3% was within the range of 9.5% to 10.5% expected by the Bank. Core inflation declined to 8.8% at November 2022 from 9.0% in October 2022.
• The key external drivers of headline inflation, such as grains, fuel and shipping prices, also continued to trend downwards and broadly in line with the Bank’s projections. In addition, as expected, the pace of monetary tightening by the United States Federal Reserve Board (Fed) appeared to be slowing.
• The December 2022 meeting of the MPC also noted that, while interest rates in the money and capital markets have generally increased in line with the policy rate, the response regarding interest rates from deposit-taking institutions has been slow. The Bank anticipates more material increases in deposit and lending rates in early 2023.
• In the absence of new shocks, the MPC noted that its future monetary policy decisions depend on the continued pass-through effect of its past policy rate changes on deposit and loan rates. The decisions also depend on the MPC seeing more pass-through of international commodity price reductions to domestic prices and on the Fed not exceeding its expected policy rate increases. 

(Source: BOJ)

• Jamaica and the International Monetary Fund (IMF) have reached a Staff Level Agreement that will enable the Government to access approximately US$1.7 billion under the IMF’s Precautionary and Liquidity Line (PLL) and Resilience and Sustainability Facility (RSF).
• This provision is being made at the Government’s request and forms part of the policy response to prevailing global shocks. The request is expected to be considered by the IMF’s Executive Board in early 2023.
• It will see the Government accessing approximately US$967 million under the PLL and about US$763 million through the RSF.
• The PLL will provide valuable insurance to Jamaica against downside risks, including those arising from extreme weather events, while the RSF will help support the country’s ambitious agenda to increase resilience to the effects of climate change, transition to a zero-carbon economy, and catalyse official and private climate-related financing.
• Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, in a statement, said that Jamaica is in a different era of economic development where the Government anticipates disruptive events and provides for them.
• The IMF, in a statement, said the Government’s response to the recent shocks associated with the COVID-19 pandemic has been “well designed” and “nimble” and aimed to contain inflationary pressures, support those worst hit by the increase in the cost of living, and steadily reduce the public debt. The organisation noted that the country’s efforts have facilitated a steady recovery in growth and job creation, despite the difficult global environment.

(Source: JIS