• The All-Jamaica Consumer Price Index (CPI) rose by 1.5% for July 2021 contributing to the 12-mth point-to-point inflation rate of 5.3%, which is an increase from the 4.3% reported in June 2021, but still within the target range. 
• A 2.3% increase in the heavily weighted index for the “Food and Non-Alcoholic Beverages” division was a major contributor due in part to an increase in the price for some agricultural produce such as yams, potatoes, lettuce, cabbage, onions and tomatoes. 
• Increases in the index for the divisions ‘Housing, Water, Electricity, Gas and Other Fuels’ (1.3 %), ‘Restaurant and Accommodation Services’ (3.2%) and ‘Transport’ (0.8 %) also contributed to the overall inflation rate. 
• Higher prices for meals consumed away from home was the main contributor to the increase in the index for the division ‘Restaurant and Accommodation Services’, while increased toll charges contributed to the rise in the index for the ‘Transport’ division. Additionally, greater electricity, water, and sewage rates influenced the increase in the index for ‘Housing, Water, Electricity, Gas and Other Fuels’ division. 
• Inflation is projected to average 4.8% over the next two years according to Bank of Jamaica. The inflation forecast anticipates that commodity (oil and grains) 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. However, it is expected that this will be tempered by subdued domestic agricultural food price inflation, based on expectations of favourable weather conditions.

(Source: STATIN & BOJ)

• Jamaica has welcomed its one millionth stopover visitor to arrive since its borders were reopened to international travel in June 2020, after being closed for three months due to the coronavirus pandemic. 
• Jamaica is the only English-speaking Caribbean country to have welcomed over 1.0Mn stopover visitors since the onset of the COVID-19 pandemic and has also generated just over US$1.5Bn in foreign exchange earnings from the industry since June 2020. 
• Minister Bartlett noted that the milestone achievement during a pandemic was indicative of the level of visitor confidence in Jamaica as a tourism destination, as well as the country’s health and safety protocols to contain the spread of COVID-19. He added that Jamaica has demonstrated to the global tourism market that it was managing this pandemic well. 
• The Minister highlighted that with the sector’s rebound, more than 50,000 tourism workers who were laid off due to the pandemic have been reinstated. Additionally, the Sangster Airport, which saw a decline in its labour force from 7,000 workers to the minimum staff required, has been able to recall 5,000 employees.

(Source: JIS News)

• As the Group of 7 developed nations pushes the world towards a singular, regulated tax rate, the Organization for Economic Cooperation and Development (OECD) has got Barbados to sign on to a new tax agreement that will likely result in increased taxes for companies registered here. 
• According to a statement from the Paris, France headquarters of the OECD, on Thursday, Barbados joined “the two-pillar plan to reform the international taxation rules and ensure that multinational enterprises pay a fair share of tax wherever they operate”. 
• The island joined 132 other countries and jurisdictions participating in the agreement to establish international tax reforms based on a two-pillar package. 
• After holding out, the island has finally agreed to the plan and is bringing the OECD closer to getting all 139 countries to ink the global tax plan. 
• The lack of corporate tax enticed many multinational companies to invest and operate business from the island. However, the implementation of a minimum tax will likely result in a drop in foreign direct investment which could adversely affect employment and GDP growth.

(Source: Barbados TODAY & NCBCM Research)

• Economically, the recent earthquake is likely to further suppress activity, particularly through disruptions of exports and potential contribution to inflation. While the earthquake was of a higher magnitude than the 2010 quake, which caused real GDP to contract by 5.5%, Fitch does not anticipate it will be as economically devastating, given that the economic capital of Port-au-Prince appears to have been largely spared major damage. 
• That being said, Haiti has produced extremely little macroeconomic data over the last several quarters, making it difficult to assess the economy's performance amid the COVID-19 pandemic, political upheaval and now the latest earthquake. 
• Fitch Solutions currently estimates real GDP contracted 7.4% in 2020 and anticipates a rebound of just 0.7% in 2021, although risks to this forecast appear increasingly significant. 
• Politically, the quake will further delay elections and prolong the period of leadership uncertainty. Haiti's government was already in a precarious position prior to the assassination of President Jovenel Moïse on July 7, which plunged the country further into crisis. As a result of these political developments, Fitch Solutions has revised down Haiti's score on its Short-Term Political Risk Index to 27.3 out of 100.

(Source: Fitch Solutions)

• Fitch Solutions maintains a neutral outlook on US and other Developed Market (DM) bond markets over the short term on the back of opposing factors. After having fallen between May and July, US bond yields could trade sideways within a wide range in the short term as investors weigh incoming economic data that could remain strong in the coming weeks. 
• However, at the same time, investors are still waiting for additional signals that the Fed could tighten monetary policy sooner than expected. Recent history suggests that the Fed’s chair Jerome Powell could signal a slightly more hawkish tone at the 2021 Jackson Hole Economic Policy Symposium, which will take place on August 26-28. 
• In EMs, there has been a clear gap between Asia and Latin America and emerging European countries due to epidemiological developments. The vaccine rollout in Asia has lagged significantly, resulting in restrictions being maintained across most economies and forcing central banks to maintain a dovish tone to support the economic recovery. Elsewhere, several central banks across Latin America and emerging Europe have already hiked interest rates aggressively as inflation has been rising, a trend that is likely to remain in place until end-2021. 
• In EM economies where central banks have been raising interest rates, bond yields have risen significantly the year-to-date across the curve.

 (Source: Fitch Solutions)

• Pfizer and BioNTech said Monday they have submitted early stage clinical trial data to the Food and Drug Administration as part of their U.S. application seeking authorization of a Covid vaccine booster for everyone 16 and older — not just people with weak immune systems. 
• The announcement from the drugmakers comes after federal health officials Friday approved administering Covid booster shots of Pfizer’s and Moderna’s vaccines to Americans with weakened immune systems, which includes cancer and HIV patients and people who have had organ transplants. 
• Federal health officials aren’t recommending booster doses for the general public at this time, but White House chief medical advisor Dr. Anthony Fauci has said everyone will “likely” need a booster shot at some point.

(Source: CNBC News)

•  Tourism Minister, Hon. Edmund Bartlett, has implored workers in the sector to sign up now to receive the coronavirus vaccine, as Jamaica anticipates the return of cruise ships. 
• Although cruise activities at Jamaica’s ports have been inactive for the past year and a half, the ministry continues to invest in the development of cruise tourism. Jamaica Vacations Limited (JAMVAC) has been driving this effort to take advantage of a new collaborative approach that will bring greater value for passengers, cruise lines and destination Jamaica. 
• The global cruise industry has cautiously resumed its voyages with new rules and guidelines. A total of 190 cruise ships are expected to take to the seas in August. With several countries lifting their ban on cruise shipping, and cruise lines anxious to recover lost ground, it is the ports of call which meet the strict health and safety protocols that will be first in line to receive vessels. 
• Minister Bartlett noted that Jamaica has been credited for its proactive approach in developing protocols for the tourism industry, which has contributed to the reopening of the tourism sector with a positivity rate of less than 1.0%. He added that it is time for the cruise subsector to play its part, as the ministry follows a strategic path in reimagining the tourism sector to rebuild faster, stronger and better.

(Source: JIS News)

• The Ministry of Housing, Urban Renewal, Environment and Climate Change is currently working towards ensuring that Jamaica can begin to benefit from incentives under the Reducing Emissions from Deforestation and Forest Degradation (REDD+) programme by early next year. 
• REDD+ was created by the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) to incentivize developing countries to reduce or remove forest carbon emissions by awarding them carbon credits, which can be sold in carbon markets. 
• Principal Director of the Climate Change Division in the Ministry, UnaMay Gordon, has said that they are hopeful that by February 2022, they will have a structure for REDD+ in Jamaica. A complementary proposal has been put forward to the Green Climate Fund for some additional funding to advance further on the work being done. 
• The preparatory work includes collaboration with other areas of Government such as the Ministry of Culture, Gender, Entertainment and Sport on matters such as utilizing forest reserves that are a part of Jamaica’s cultural heritage or are located in Maroon communities, for example. After successful implementation of the framework for REDD+, Jamaica will qualify to earn from reducing emissions and removing carbon from the air through forest carbon sinks.

(Source: JIS News)

• The Office of the Auditor General, in a report tabled in the House of Assembly yesterday, revealed that the financial support from the International Monetary Fund (IMF) was critical in providing the Bahamian government with sufficient cash to make it to the end of the 2019-2020 fiscal year, following what it termed “a collision of catastrophes”. 
• “The collision of both catastrophes, Dorian and COVID-19, put the Budget in a crisis, tax receipts going down and government payments increasing,” the report said. “The required $250m funding assisted in addressing the supply and demand shock, and having provision for the economic downturn. 
• Most importantly, the funding was vital in facilitating the urgent measures taken by The Bahamas with respect to socio-economic impact and public health resiliency. The $250m was essential in providing budgetary support and sustaining the healthcare and mitigation measures in response to COVID-19.

(Source: The Tribune)

• The Panama Canal, which marks 107 years of operations on Sunday, August 15, has continued to work uninterruptedly to provide services as a transit route for world trade despite the pandemic. 
• For the first nine months of the fiscal year 2021, the canal and reported total revenues of $2.13 billion, with a growth of $322 million or 11% compared to the same period last fiscal year. 
• The budget for the interoceanic highway for fiscal year 2021, which will be completed on September 30, estimates total revenues of $3,308.9 billion and contributions to the National Treasury of $1,760.3 billion. 
• Sustained strong performance of the Canal will support the 12.2% rebound in GDP expected this year as well as the reduction in fiscal deficit as revenues rebound from a recent slump, supported by expanding canal activity.

(Source: Newsroom Panama & NCBCM Research)