• The Inter-American Development Bank (IDB) says it has signed an agreement with the Universal Postal Union (UPU) to modernize and transform postal services in Latin America and the Caribbean (LAC). The aim is to promote regional integration and trade, strengthen value chains and foster the digital economy.
• Postal services have unique advantages to facilitate trade, including a network that can reach remote areas, transaction logistics, and linkages with other postal services and key actors in the trade process, such as customs and airlines.
• The IDB said improving these services across the region can lead to increased commerce and help develop the digital economy, especially for small and medium-sized firms (SMEs), which account for about 99% of businesses in Latin America and the Caribbean.
• The partnership will allow it to support countries as they incorporate the international guidelines and standards issued and promoted by the UPU.
• The institutions will also collaborate in researching data on trends and identifying existing gaps in postal services. The agreement includes sharing best practices and expertise from the modernization of postal services at the global level, which can be adapted and replicated in the region.

(Source: Caribbean Nation Weekly)

• According to the Economic Commission for Latin America and the Caribbean (ECLAC) countries of Latin America and the Caribbean face a complex economic and social environment in 2022. Weak economic growth is accompanied by strong inflationary pressures, slow job creation, falling investment and growing social demands.
• This situation has created major challenges in terms of macroeconomic policy, with a need to reconcile policies that promote economic recovery with policies to rein in inflation and make public finances sustainable.
• According to the Agency’s recent report, the economy of the Caribbean region is expected to grow overall by 10.2%, due to the whopping 52% growth expected in the Guyana economy. The Barbados economy is also projected to grow by about 5.9% this year owing to the continued recovery in its tourism sector.
• Meanwhile, Latin America and the Caribbean together are projected to have an average growth of 2.7%, returning to the path of low growth it was following before the COVID-19 pandemic. This, ECLAC said, was in keeping with the slowdown seen in the first half of 2022, after growth of 6.5% in 2021.
• In the Latin America and Caribbean region, the value of exports is expected to rise by 22% this year, and the value of imports by 23%, as domestic demand continues to grow.
• Notably, in the Caribbean, total revenues are expected to increase again in 2022, driven mainly by rises in tax revenues and revenues from other sources, such as non-tax revenues, capital revenues and external grants.

(Source: Barbados Today)

• U.K. inflation could soar above 22% next year if energy prices continue their upward spiral, U.S. investment bank Goldman Sachs warned. In a research note dated Monday, August 29, 2022, Goldman said headline inflation could peak at 22.4% and the gross domestic product could drop by 3.4% if energy costs keep rising at their current pace.
• This comes after British households were hit with a projected 80% increase in their energy bills in the coming months, taking the average annual household bill to £3,549 ($4,197) from £1,971 and exacerbating the country’s existing cost-of-living crisis.
• Britain’s energy regulator, Ofgem, announced Friday, August 26, 2022, that it would raise its main cap on consumer energy bills from Oct. 1 to keep pace with rising wholesale gas prices, which have surged 145% in the U.K. since early July. Ofgem is due to recalculate its price cap again in three months. However, Goldman said that if prices remain “persistently higher,” another 80% hike could be possible.
• If, however, energy prices moderate, U.K. peak inflation is likely to hit 14.8% in January, Goldman’s commodity strategists predicted — well above the 13.3% forecast by the Bank of England earlier this month.
• The bank also said that the U.K. was likely to fall into a recession in the fourth quarter. It forecast that the U.K. economy would contract by -0.3% on a non-annualized basis in the fourth quarter of this year, followed by -0.4% and -0.3% in the first and second quarters of 2023, respectively. This comes on the back of the impact of surging inflation on households' disposable incomes and consumption.

(Source: CNBC)

• There were nearly 1Mn more job openings than expected in July, an inflationary sign that the U.S. labour market is still extremely tight, the Bureau of Labor Statistics reported Tuesday, August 30, 2022.
• Available positions totalled 11.24Mn for the month, well in excess of the 10.3Mn FactSet estimate, according to the Job Openings and Labor Turnover Survey (JOLTS). The total was about 200,000 higher than the 11.04Mn in June, a number revised up from the initially reported 10.7Mn.
• Federal Reserve officials watch the JOLTS numbers closely for signs of slack in hiring. The July numbers reinforced that there is still a considerable shortage of workers for available positions, with openings outnumbering available workers by just shy of a 2-to-1 margin. That, in turn, is inflationary as employers are forced to offer higher compensation to attract workers at a time when prices are rising near their fastest pace in more than 40 years.
• Hiring declined during the month, falling to 6.38Mn. Quits, a closely watched metric for worker confidence, also dropped, down to 4.18Mn as those leaving their jobs as a percentage of the workforce declined one-tenth of a percentage point to 2.7%, still relatively high by historical standards.

(Source: CNBC)

• Caribbean Cement Company Limited (CCC) announced on Wednesday, August 24, 2022, the ground-breaking of its project to expand its production capacity. This expansion aims to increase CCCL’s cement capacity by up to 30% in Jamaica.
• Through its parent company Cemex, $4.6Bn (US$30Mn) will be spent to expand the plant in Kingston at the Rockfort-based facility.
• The expansion is expected to position the company to comfortably supply the Jamaican market in the coming years, while likely generating some spare capacity for export purposes according to Caribbean Cement General Manager Yago Castro.
• Management also believes the plant upgrade will enable CCC to produce more clinker and unleash the last portion of its cement production capacity drive from over one million tonnes to close to 1.4 million tonnes a year.
• The Rockfort plant is the sole manufacturer of cement, but a small portion of the market is supplied from imports. This planned increase will strengthen the self-sufficiency of the national cement industry, reduce dependency on cement imports, and reinforce Carib Cement’s ability to serve the growth of the construction sector in Jamaica and the Caribbean. This will also drive the company’s revenues and increase shareholder value.

(Sources: JSE and NCBCM Research)

• The central bank is projecting weaker growth in deposit takers' offerings of private sector credit over the next eight quarters.
• In its quarterly Monetary Policy Report for the June quarter published on August 19, the Bank of Jamaica (BOJ) stated that private sector credit is projected to grow at an average rate of 8.1% up to the June 2024 quarter, compared to the previous forecast, for an expansion of 10.0%.
• It noted that the projected annual expansion over the near term reflects a slightly less optimistic economic outlook amid the continued recovery from the impact of the pandemic.
• "The weaker growth, relative to the previous forecast, is influenced by the impact of contractionary monetary conditions," the BOJ said, pointing out that this followed its decision to further increase the policy rate in the June 2022 quarter.
• With lending institutions beginning to pass on the policy rate increases to the price of loans, the pace of loan growth is expected to slow.

(Source: BOJ)

• Fitch forecasts real GDP growth will slow to 3.5% in 2022 in Grenada. Not only is this down from a 6.6% forecast for 2022, but it also represents a downturn from the estimated growth of 5.6% in 2021 and comes in below the average growth of 3.9% registered from 2015 to 2019.
• Elevated inflation will weigh on real household disposable incomes in Grenada in the coming months, dragging on private consumption growth. In addition, inflation will rise from an estimated average of 1.2% in 2021 to 6.0% in 2022, reflecting the impact of elevated global oil prices. 
• Fitch expects that the tourism sector will be a key driver of growth in 2022, but will remain far off a full recovery from the pandemic. Furthermore, elevated inflation in key source markets -the United States (7.7% in 2022), the UK (9.0%), and Canada (7.0%) - which together normally provide around 80.0% of Grenada's arrivals - will prevent a more notable recovery in the sector.
• Tourism accounts for 80.0% of exports in Grenada, with below-trend arrivals and a higher energy import bill set to increase the negative contribution of net exports to growth. Over 25% of employment in Grenada comes from tourism, and Fitch anticipates that high unemployment will prevent a larger uptick in consumer spending. 
• However, several factors will prevent a larger slowdown in economic activity in 2022, including an absence of domestic COVID-19 restrictions which should allow commercial activities to run largely as normal. 

(Source: Fitch Solutions)

• Barbados government is banking on the economy getting a big boost from more than $1.8 billion in infrastructural projects, some of which are already underway and others are being planned.
• While stating that the economy “has shown promising signs of recovery following the fallout from the pandemic and natural disasters in 2020 and 2021”, the government said “risks of a protracted global economic downturn and elevated global inflation” were a threat to the rebound.
• However, the government believes some of the risks would be “mitigated by the economic benefits to be derived from the commencement and continuation of several public and private sector capital projects and public-private partnerships (PPPs).
• These include a multimillion-dollar master plan for the modernisation of the ports of entry over the next ten years, the construction of a cruise terminal at Speightstown, redevelopment of the Shallow Draught Marina; development of a local yachting industry, and expansion and enhancement of the operations of the Grantley Adams International Airport.

(Source: Nation News)

• Home prices declined 0.77% from June to July, the first monthly fall in nearly three years, according to Black Knight, a mortgage software, data and analytics firm. While the drop may seem small, it is the largest single-month decline in prices since January 2011. It is also the second-worst July performance dating back to 1991, behind the 0.9% decline in July 2010, during the Great Recession.
• The sharp and fast rise in mortgage rates this year caused an already pricey housing market to become even less affordable. Home prices rose sharply during the first years of the COVID pandemic because demand was incredibly strong, supply historically weak and mortgage rates set more than a dozen record lows.
• Now, housing affordability is at its lowest level in 30 years. It requires 32.7% of the median household income to purchase the average home using a 20% downpayment on a 30-year mortgage, according to Black Knight. That is about 13 percentage points more than it did entering the pandemic and significantly more than both the years before and after the Great Recession. The 25-year average is 23.5%.

(Source: CNBC News)

• The Inflation Reduction Act, the most aggressive climate investment ever taken by Congress, could cut the social costs of climate change by up to $1.9 trillion by 2050, the White House said in an assessment on Tuesday, August 23, 2022.
• The Act, which the president signed into law earlier this month, will reduce costs related to rising temperatures, minimize property damage from sea level rise and other disasters and reduce health impacts like premature death, the White House said.
• “The Inflation Reduction Act will help ease the burden that climate change imposes on the American public, strengthen our economy and reduce future financial risks to the Federal Government and taxpayers,” Candace Vahlsing, the OMB’s associate director for climate, wrote in a blog post on August 23, 2022.
• The analysis by the Office of Management and Budget, which administers the federal budget, is the first published estimate of avoided climate-related social costs resulting from legislation. The social cost of carbon is an estimate of the economic costs that would occur from a future level of carbon pollution.
• The bill’s climate provisions are projected to reduce the country’s carbon emissions by roughly 40% by 2030. Early in his presidency, President Joe Biden pledged to reduce U.S. emissions from 2005 levels at least in half by 2030 and achieve net-zero emissions by 2050.

(Source: CNBC News)