• Cabinet has approved a 28.5% increase in the national minimum wage, effective April 1, 2022. Minister of Labour and Social Security, Hon. Karl Samuda, says this will see the rate moving from $7,000 to $9,000 per 40-hour workweek. The minimum wage for industrial security guards will move from $9,700 to $10,500 per 40-hour workweek, along with accompanying allowances. 
• Jamaica’s economic recovery has been a major contributing factor to the minimum wage increase. Minister Samuda highlighted that the minimum wage could see a further increase however that would depend on the pace at which the Jamaican market recovers. 
• Given the pace of inflation, raising the minimum wage is important to ensure that minimum wage earners can maintain a basic standard of living by providing a more appropriate income level to cope with the increased cost of living. However, the increase will likely result in higher operating expenses for companies, which could in turn raise prices of goods and services to cover increased labour costs. This could further fuel inflation.

(Sources: JIS and NCBCM Research)

• Following difficult reforms, including streamlining the government and reducing public outlays, Jamaica's fiscal deficit has turned into a modest surplus, and Fitch expects this to continue over the coming decade. 
• Fitch’s view for sustained fiscal consolidation is supported by efforts to expand the tax base. Although Jamaica has lowered its corporate tax rate as part of its ongoing efforts to improve the business environment and incentivise investment, the government has worked to simplify its consumption tax framework and eliminate tax breaks for some industries, which will lead to increased revenue over the long term. 
• Better fiscal management on the part of the central government is critical for Jamaica's future since investors concerned about the country's long-term viability will need assurances that further defaults are not on the horizon. Fitch believes that a political consensus has emerged over demonstrating a firm commitment to more sustainable economic policy, which will underpin progress from a business environment standpoint.

(Source: Fitch Solutions)

• Figures reported by Latin American sovereigns show stronger-than-expected recoveries in public finances. In 2021, deficits in many sovereigns narrowed close to pre-pandemic levels. 
• Strong tax collections were the main driver behind the better-than-expected fiscal outturns, buoyed by solid rebounds in real GDP, and grew well in excess of these variables almost everywhere. Higher commodity prices were a fiscal boon for the region’s oil and metals producers. 
• Spending remains well above pre-crisis levels in most countries, due to ongoing pandemic-related expenditure, and inertial growth in permanent spending in the past two years. The strong revenue rebound offset this higher spending in most sovereigns, bringing down deficits significantly, except in Chile and Colombia where this spending has been particularly large and even grew in 2021. 
• Brazil, however, was an exception, withdrawal of generous pandemic benefits and containment of recurrent expenditures brought primary spending back to pre-crisis levels in real terms.

 (Source: Fitch Solutions)

• Figures reported by Latin American sovereigns show stronger-than-expected recoveries in public finances. In 2021, deficits in many sovereigns narrowed close to pre-pandemic levels. 
• Strong tax collections were the main driver behind the better-than-expected fiscal outturns, buoyed by solid rebounds in real GDP, and grew well in excess of these variables almost everywhere. Higher commodity prices were a fiscal boon for the region’s oil and metals producers. 
• Spending remains well above pre-crisis levels in most countries, due to ongoing pandemic-related expenditure, and inertial growth in permanent spending in the past two years. The strong revenue rebound offset this higher spending in most sovereigns, bringing down deficits significantly, except in Chile and Colombia where this spending has been particularly large and even grew in 2021. 
• Brazil, however, was an exception, withdrawal of generous pandemic benefits and containment of recurrent expenditures brought primary spending back to pre-crisis levels in real terms.

 (Source: Fitch Solutions)

• A team of oil and gas specialists have been summoned from the Republic of Trinidad and Tobago to assist Barbados with an urgent oil drilling mission, as the country looks long-term at cushioning any likely economic blow from the escalating conflict between Russia and Ukraine. 
• Minister of Energy, Small Business and Entrepreneurship Kerrie Symmonds urged citizens to brace for the possible impact, revealing that the most recent developments have made feared gas price increases “almost inevitable”. 
• Symmonds disclosed that a supply analysis conducted by the Barbados National Oil Company (BNOC) revealed that only 30% of the gas consumed here is locally produced with the remaining 70% imported. The minister urged citizens to conserve energy as the country continues to monitor the events happening in Ukraine and Russia. 
• The Russia-Ukraine conflict is likely to lead to a global economic blowout. Russia is the second-largest oil exporter, and its decision to invade Ukraine will have substantial implications on oil prices and the global economy.

 (Source: Barbados Today)

• The Institute of International Finance said on Wednesday that the Emerging market borrowing led by China inflated the global debt mountain to a record $303.0Tn in 2021, although the global debt-to-GDP ratio improved as developed economies rebounded. The $10.0Tn rise in the global debt pile was down from the $33.0Tn increase in 2020 when COVID-19-related expenditure soared. 
• But more than 80% of last year's new debt burden came from emerging markets, where total debt is approaching $100.0Tn. That means emerging markets have started in 2022 facing record-high refinancing needs just as the Federal Reserve prepares to raise interest rates after years of record-low borrowing costs. 
• While the pace of accumulation slowed in 2021, EM government debt levels remain elevated. This slowdown is in line with the moderation in government budget deficits seen over the past year. The IIF authors noted that since the onset of the pandemic, some EM governments seem more reliant on off-budget borrowing, pointing to rising non-financial corporate debt levels in China, Russia and Saudi Arabia. 
• The global debt-to-GDP ratio fell to 351% in 2021 from an all-time high of more than 360% in 2020, although last year's rate is some 28 percentage points above pre-pandemic levels.

(Source: Reuters)

• Oil prices reversed earlier losses on Wednesday, rising on reports that Ukraine's government, foreign ministry and state security service were affected by a cyberattack. 
• Brent crude was up $1.48, or 1.5%, to $98.32 a barrel at 10:38 a.m. EDT (1538 GMT), after hitting $99.50 on Tuesday, the highest since September 2014. U.S. West Texas Intermediate (WTI) crude futures rose $1.58, or 1.7%, to $93.47 a barrel, after reaching $96 on Tuesday. 
• U.S. stocks slipped on Wednesday after giving up all of the opening gains as reports of cyberattacks on several Ukrainian state websites added to fears about escalating tensions with Russia. Ukraine declared a state of emergency on Wednesday and told its citizens in Russia to flee, while Moscow began evacuating its Kyiv embassy in the latest ominous signs for Ukrainians who fear an all-out Russian military onslaught. 
• Prices also rose on Tuesday on fears that sanctions imposed by Western nations on Russia, after it sent troops into two breakaway regions in eastern Ukraine, could hit energy supplies. Sanctions imposed by the United States, the European Union, Britain, Australia, Canada and Japan were focused on Russian banks and elites, while Germany halted certification of a gas pipeline from Russia. 
• But the United States made it clear that sanctions agreed and those which may be imposed will not target oil and gas flows. However, analysts expect oil prices to continue seeing support from the Russia-Ukraine crisis, with some Western countries promising to impose more sanctions if Russia launches a full invasion.

(Source: Reuters)

• Massy Holdings Limited reported a net profit attributable to owners of the parent company from continuing operations of TTD177.21Mn for its first quarter ending December 31, 2021, which represents an 8.5% or TTD13.84Mn increase relative to the prior period. 
• Revenues grew by 8.4% as the Group’s topline benefited from growth in its three main investment portfolios (Integrated Retail, Gas Products, and Motors and Machines). 
• Management attributed this growth to the rebound in some of the territories that it operates in, particularly, Guyana, and noted that others are rebounding strongly from pandemic-induced recessions. 
• After its first quarter, the company cross-listed on the Jamaica Stock Exchange and its shareholders agreed to a 20-for-1 stock split. The share split has a target date of March 11, 2022, and is intended to enhance retail trading of Massy’s shares in Jamaica as well as in Trinidad and Tobago. 
• Massy’s stock price has decreased by 18.2% since its enlistment on the Jamaica Stock Exchange on January 27, 2022. The stock closed Tuesday’s trading session at $1996.48 and currently trades at a P/E of 13.5x earnings which is below the Main Market Conglomerate Sector Average of 15.7x.

(Source: Company Financials and NCBCM Research)

• Among the oil and gas jurisdictions in the world, Guyana has performed well in its management of the industry and it is ranked 10th ahead of Brazil and Argentina for competitiveness in exploration and production by internationally respected business intelligence firm, IHS Markit. 
• Guyana continues to send a positive message to companies around the world that the country has a trustworthy investment climate that will bring attractive investment and partners into other sectors. Notably, IHS Markit indicated that the main challenge for Guyana is managing the flow of money to the country to prevent overheating and distortions of the economy. 
• However, Guyana’s Vice President Dr. Bharrat Jagdeo has said that while overheating is a fair concern, the Government is keeping careful watch. This caution will be especially pertinent as Guyana’s revenues balloon. With current production, Guyana is already expecting almost US$1Bn this year. 
• Guyana continues to position itself as a key producer in the oil and gas industry, with the capacity to cushion some of the supply shortfalls on the global market. As such the industry will continue to contribute to the country's revenue, investment opportunities, and economic growth.

 (Source: Caribbean News Global)

• Fitch Solutions maintains the view that Latin American governments will largely be unable to enact market-friendly policy reforms in the coming quarters, especially as Brazil and Colombia hold presidential and legislative elections in 2022 and leftist, populist presidents in Mexico and Peru likely attempt to weaken previous reforms. 
• Notably, reform efforts throughout Latin America were significantly disrupted due to a series of substantial public protests in Chile, Colombia, and Ecuador in Q4 2019, followed by the economic and public health shock of the COVID-19 pandemic. 
• However, while most of the region’s governments shifted to expansionary fiscal policies to mitigate the economic strains from the pandemic by supporting household incomes, rising food and fuel prices have prompted governments to increase subsidies or intervene in the market in other ways. This has further undermined the post-pandemic return to fiscal consolidation and underscored the less favourable outlook for reform. 
• The region’s average Q1 2022 score of 3.6 out of 10 in Fitch’s Reform Tracker is higher than last quarter’s score of 3.4, but remains below the score of 4.1 in Q1 2021, as public opposition will continue to impede large-scale reforms preferred by investors. Fitch’s reform tracker measures reform momentum on a scale from 0 to 10. 
• While the economy of the region is expected to improve in 2022, political and economic issues are expected to hinder the enactment of reforms, thereby complicating the recovery process. These hindrances include a series of protests, upcoming elections and the effect of the ongoing COVID-19 pandemic. 

 (Source: Fitch Solutions)