• Oil prices rose on Monday, driven higher after OPEC+ nations called off talks on output levels, meaning no deal to boost production has been agreed. Brent was up 94 cents, or 1.2%, at $77.11 a barrel, trading around 2-1/2 year highs. U.S. oil gained $1.11, or 1.5%, to $76.27 a barrel. 
• OPEC+ ministers abandoned the talks and set no new date to resume them, after clashing last week when the United Arab Emirates rebuffed a proposed eight-month extension to output curbs. The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, agreed on record output cuts in 2020 to cope with a COVID-induced price crash. 
• The producers have been gradually easing the output restrictions, but a plan on Friday to lift output by about 2 million barrels per day (bpd) from August to December 2021 and to extend the pact on a series of gradual output shifts to the end of 2022 was blocked by the UAE. 
• The prospect of OPEC+ not adding the extra barrels to the market next month boosted prices, but also added volatility, said Rystad Energy oil markets analyst Louise Dickson, noting that prices briefly turned negative.

(Source: Reuters)

• The shipment of 65,000 doses of AstraZeneca vaccines, donated by the Government of Mexico, will facilitate the staging of another blitz this weekend to inoculate persons who are due their second dose. 
• Health and Wellness Minister, Dr. the Hon Christopher Tufton, made the disclosure at a press conference held at the Norman Manley International Airport in Kingston on Wednesday (June 30), shortly after witnessing the arrival of the shipment. 
• “This weekend’s blitz, from Friday to Sunday, possibly Monday, will only be for persons who fall in that eight-week or over period, because we need to clear that backlog,” he said. 
• Tufton noted that about 257,000 doses of vaccine have been administered, to date, with some 173,000 persons getting their first dose and 84,000 receiving second doses.  He said some 25,000 to 30,000 persons are now due their second dose. 
• Executive Director, Mexican Agency for International Cooperation and Development (AMEXCID), Dr. Laura Elena Carrillo Cubillas, said the donation is a token of her country’s appreciation and respect for the Jamaican people. 
• “Mexico has long historical ties across the Caribbean Sea especially, with your country. That’s why we recently celebrated more than half a century of diplomatic relations that have brought our people closer, facilitating a better understanding of a rich cultural and artistic heritage, while allowing us to cooperate on important regional and international initiatives,” she said.

(Source: JIS)

• The IMF Executive Board approved the request by St. Vincent and the Grenadines for emergency financing assistance of about US$11.6Mn under the Large Natural Disaster Window (LNDW) of the Rapid Credit Facility (RCF). The RCF will help address the urgent balance of payment needs associated with the explosive eruption of the La Soufrière volcano. 
• The ongoing eruption is hitting St. Vincent and the Grenadines hard, compounding the economic and social/humanitarian impact of the pandemic and by IMF staff’s estimates, may result in economic losses amounting to around 30% of GDP as infrastructure, housing, and crops are damaged. 
• This will be the first request under the LNDW of the RCF. A member may qualify for the LNDW when urgent balance of payments needs stem from a natural disaster that results in damages of at least 20% of the member’s GDP.

(Source: IMF)

• Venezuela is preparing to once again lop off zeroes from the national currency in an attempt to simplify daily transactions which sometimes barely fit on a calculator or require swiping cards multiple times to complete a purchase. 
• The central bank is planning to slash six zeroes from the bolivar as early as August after previous attempts to issue larger-denomination bills failed to resolve problems created by endemic inflation, according to three people with direct knowledge of the matter who aren’t authorized to speak publicly about the plans. That means one dollar would fetch 3.2 bolivars instead of 3,219,000 at present. 
• Venezuela last carried out a “redenomination” of the bolivar in 2018 and in March began printing a 1 million-bolivar note, the largest in the country’s history. But that bill is now worth just $0.32 and isn’t enough to buy a cup of coffee. Since 2008, the government -- first under the late Hugo Chavez, and then under current President Nicolas Maduro -- has removed 8 zeroes from the currency, as hyperinflation decimated people’s savings. 
• While the country has now informally adopted the U.S. dollar for many every day transactions, most Venezuelans only earn bolivars and the local currency is needed for things like bus fare, parking and tips. 
• The push for simplifying bolivar transactions has come largely from companies who have raised the issue with the government. Things like paying taxes and dealing with other accounting calculations have become absurdly complex.

(Source: Bloomberg)

• The International Monetary Fund raised its 2021 U.S. growth projection sharply to 7.0% due to a strong recovery from the COVID-19 pandemic and an assumption that much of President Joe Biden's infrastructure and social spending plans will be enacted. 
• The IMF's latest forecast, marking the fastest U.S. growth pace since 1984, compares favourably to an April projection of 4.6% growth in 2021. The Fund raised its 2022 U.S. GDP growth forecast to 4.9%, up from its previous 3.5% forecast made in April. 
• The new forecasts consider the IMF's annual assessment of U.S. economic policies. The forecasts also assume that the U.S. Congress will pass the Biden administration's American Jobs Plan and American Families Plan for infrastructure, social spending and tax reform plans this year at a size and composition similar to their original proposals. 
• IMF Managing Director Kristalina Georgieva said the two packages would implement many recommendations that the IMF has made for the United State for years, including investments to boost productivity, education and to allow more women to join the American workforce.

(Source: Reuters)

• "The European Central Bank should not start tolerating higher inflation under its new policy framework, as that could be taken as a sign that it is trying to bankroll indebted governments”, ECB policymaker Jens Weidmann said on Thursday. 
• ECB policymakers are in the middle of debating a new strategy, with many now backing the notion of letting inflation surpass 2% for a while after it has lagged below that level for most of the past decade. 
• But Weidmann, who heads Germany's Bundesbank and has long warned that the ECB's massive purchases of government bonds risked blurring the lines between monetary and fiscal policy, rejected that approach. 
• "Holding still when the inflation rate exceeds (the ECB's) target level in the medium term could be misunderstood...as an attempt by monetary policy to put the sustainability of public finances above the goal of price stability," he said in a speech. "This could make it even more difficult to anchor inflation expectations". 
• He also reaffirmed his opposition to targeting an average inflation rate, as the U.S. Federal Reserve is doing, saying it would be difficult to communicate and painful to implement. Instead, Weidmann said the ECB should set its inflation goal at 2% and see it symmetrically, meaning any overshoot would be taken just as seriously as an undershoot.

(Source: Reuters)

• Bank of Jamaica (BOJ) announced its decision to hold the policy interest rate unchanged at 0.50% per annum on June 30, 2021. The policy rate is the interest rate that it offers to deposit-taking institutions on overnight placements with BOJ. 
• The decision to hold the policy rate unchanged was made by a unanimous vote by the Bank’s Monetary Policy Committee (MPC). This decision was based on the MPC’s assessment that, despite recent increases in international commodity prices, the existing stance of monetary policy remains appropriate to support inflation within the target range (4%-6%) over the next two years. The Bank’s accommodative monetary policy posture is also aimed at supporting a recovery in economic activity in Jamaica. 
• Based on the Bank’s forecast in May 2021, inflation is projected to average 4.8% over the next two years. The forecast anticipates that commodity price inflation will accelerate in the context of global supply chain disruptions and increasing demand as economies reopen, leading to higher domestic transport and processed food inflation.

(Source: BOJ)

• On June 30, 2021 STATIN released its official estimate of Q1 GDP performance for 2021 which points to a 6.7% contraction which is 100 basis points higher than PIOJ’s previous 5.7% estimate. The performance of the economy was a reflection of the continued impact of the novel Coronavirus and the measures adopted to contain its spread.   The impact was predominantly felt in the Services Industries which fell by 9.9% (which is higher than PIOJ’s 8.1% estimated contraction). The Goods Producing Industries, however, grew by 2.6% (which is slightly lower than PIOJ’s 3.0% growth estimate for the industry). 
• All industries within the Services Industries declined, with the exception of the Producers of Government Services which remained relatively unchanged. Declines were recorded for: Hotels & Restaurants (55.9%), Other Services (21.9%), Transport, Storage & Communication (7.8%), Electricity & Water Supply (6.9%), Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment (5.1%), Real Estate, Renting & Business Activities (1.9%) and Finance & Insurance Services (1.2%). 
• The growth in the Goods Producing Industries was largely due to higher output levels in Construction (10.5%) and Mining & Quarrying (7.1%). However, there were declines in Agriculture, Forestry & Fishing (2.0%) and Manufacturing (1.1%). 
• When compared to the fourth quarter of 2020, total value added for the economy grew by 0.6%.  With the Q1 2021 outturn, the economy declined by 11.0% for the fiscal year 2020/2021 compared to fiscal year 2019/2020, reflecting the impact of COVID-19.

(Source: JIS)

• Robust external demand and a swift national vaccination campaign will underpin an economic rebound in the Dominican Republic over the coming quarters. 
• Economic activity has accelerated in the year through May, averaging a monthly 15.6% y-o-y expansion after returning to growth in March. This will support business confidence and hiring, particularly as the country’s fast vaccination campaign outpaces other Latin American and Caribbean markets. 
• As of June 27, 44.7% of Dominicans had received at least one COVID-19 vaccine dose and 26.1% have been fully vaccinated. This efficiency in administering vaccines has allowed the Dominican government to relax many of its public health restrictions, aiding a recovery in domestic commerce.  
• Furthermore, strong US growth in 2021 will sustain a surge in remittance inflows that will boost household incomes and consumer purchasing. Over 1.0Mn people of Dominican ancestry live in the US and from January through May 2021, inbound remittances totaled US$4.4Bn, a 60.5% y-o-y increase and 53.1% higher than from January-May 2019. 
• That being said, Fitch Solutions has revised its 2021 real GDP growth forecast to 6.0%, from 5.2% previously, due to a more upbeat outlook for the global economy and Dominican exports. The agency’s 2022 growth forecast of 4.7% is unchanged. 
• While it expects the Dominican economy will outperform other Caribbean markets in the coming years, the possibility of higher inflation or an abrupt tightening of monetary policy pose downside risks to longer-term growth.

(Source: Fitch Solutions)

• Puerto Rico will continue to run wide current account surpluses in the coming years, fueled by strong federal aid inflows. 
• It is forecasted that the surplus will narrow in FY2021 (July 2020 – June 2021) as goods and services exports have contracted sharply, which will likely reverse in FY22 in line with economic re-openings. 
• Fitch Solutions forecasts the current account surplus will reach 11.3% of GDP in FY21, from 17.3% in FY20, before rebounding to 17.7% in FY22.

(Source: Fitch Solutions)