• High Commissioner of India, His Excellency Mayank Joshi, says Jamaica must prepare to explore opportunities and identify ways to benefit from India’s increased interest in the Latin American Region.
• He noted that trade between India and Latin America has increased to some $50Bn and the India Government envisions that this will reach $100Bn by 2028. Jamaica’s location can provide Indian businesses with access to markets in Latin America and the Caribbean.
• “For a start, the focus can be capacity building, education, health care, digital technology, hospitality management and renewable energy. Let us work together and see how we can make the most benefit out of this opportunity,” he said. High Commissioner Joshi said the strong relationship between Jamaica and India serves as a solid foundation for mutually beneficial trade, investment and economic partnerships.
• Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill, who spoke at the event, said the recent visit to India by Prime Minister, Dr. the Most Hon. Andrew Holness, has opened doors for future collaboration in vital sectors, such as trade, technology, education and tourism.

(Source: JIS)

• Economies in Latin America and the Caribbean are expected to grow by 2.4% in 2025, driven by domestic consumption but tempered by a risk of worsening global geopolitical and trade tensions, the United Nations said on Wednesday, December 18, 2024.
• The UN's Economic Commission for Latin America and the Caribbean (ECLAC) raised its projection for growth in the region from 2.3% in August but said its estimate is for the region to maintain a "low growth trajectory."
• Private consumption will be the main driver for growth in the region, similar to 2024, but "with a more moderate expansion." ECLAC also revised its regional growth forecast for this year to 2.2%, up from 1.8% in August. Employment is expected to continue to grow slightly in 2025, despite a weak labour force participation rate compared to pre-pandemic levels and persistent gender inequality.
• That said, the main risks to the region's economies include intensifying geopolitical and trade tensions that could affect the price of raw materials, as well as complicate shipping routes and transport logistics.
• That said, countries in Latin America and the Caribbean are on a downward trend in inflation, which, combined with monetary easing in the United States, has allowed rate-setters to reduce interest rates in a "heterogeneous and cautious" manner, and should keep private demand robust.
• That said, the ECLAC stressed that the outlook for investment in the coming years remains discouraging amid weak public spending. "Gross fixed capital formation is expected to continue to contract, which calls into question its role in sustaining medium- and long-term growth in the region's economies," the report said.

(Source: Reuters)

• The Ministry of Foreign Affairs (Mirex) and the Dominican Association of Exporters (Adoexpo) have signed an agreement to promote and enhance the country’s exports by leveraging its advantages.
• The agreement outlines an action plan aimed at improving communication, enhancing diplomatic support for Dominican exports, exploring market opportunities, conducting research, and establishing open communication channels between both organizations.
• It also highlights the Dominican Republic’s capacity to strengthen international ties, particularly through integration and cooperation efforts in line with the National Development Strategy.
• The agreement establishes a joint working group, led by the Ministry of Foreign Affairs and coordinated by the Vice-Ministry for Economic Affairs and International Cooperation. Foreign Minister Álvarez emphasized the government’s commitment to fostering investment and trade, enhancing international relations, and supporting the growth of the national productive sector.
• He noted that the country’s political stability, legal security, and economic resilience have been crucial in consolidating the Dominican Republic’s presence in global markets, contributing to record export figures of over $12Bn in 2023. Furthermore, since the start of the year (January to November 2024), Dominican exports reached $11.9Bn, supported by key exports in gold, medical instruments, and cigars.

(Source: Dominican Today)

• The U.S. Federal Reserve cut interest rates by 25bps on Wednesday to range between 25%-4.50%. However, Federal Reserve Chair Jerome Powell said more reductions in borrowing costs now hinge on further progress in lowering stubbornly high inflation, remarks that showed policymakers are starting to reckon with the prospects for sweeping economic changes under a Trump administration.
• Powell's explicit - and repeated - references to the need for caution from here on jolted Wall Street, sending stocks sharply lower, bond yields higher and leading investors to dial back estimates of how far borrowing costs are likely to fall over the coming year.
• "I think we're in a good place, but I think from here it's a new phase and we're going to be cautious about further cuts," Powell said at a press conference after the central bank's policy-setting Federal Open Market Committee cut its benchmark interest rate by a quarter of a percentage point at the end of a two-day meeting.
• While he said the Fed remained confident price pressures would continue to ease, he also acknowledged central bank staff and policymakers were beginning to at least preliminarily think through how President-elect Donald Trump's promises of higher tariffs, tax cuts and tougher immigration policy will change the outlook.
• In developing new projections, "some people did take a very preliminary step and start to incorporate highly conditional estimates of economic effects of policies into their forecasts at this meeting," Powell said of an outlook in which U.S. central bankers anticipated a higher inflation outlook and fewer rate cuts next year.
• S. central bankers now project they will make just two quarter-percentage-point rate reductions by the end of 2025. That is half a percentage point less in policy easing next year than officials anticipated as of September, with Fed projections of inflation for the first year of the new Trump administration jumping from 2.1% in their prior projections to 2.5% in the current ones - well above the central bank's 2% target.

(Source: Reuters)

• The Bank of England is expected to hold interest rates at 4.75% on Thursday, despite signs of a slowing economy, as persistent inflation pressures limit it to a "gradual" approach towards cutting borrowing costs. All 71 economists polled by Reuters said rates would stay unchanged for now. Most expect a quarter-point cut only on Feb. 6 after its next meeting, followed by three more cuts by the end of 2025.
• However, financial markets are much less certain about the extent of rate cuts next year, following data on Tuesday that showed an unexpected acceleration of wage growth. Investors late on Wednesday priced in just a 50% chance of a rate cut in February and only two cuts in 2025 as a whole.
• By contrast, the European Central Bank has cut rates by one percentage point in 2024 and is expected by markets to lower them by another percentage point in 2025 as the euro zone economy is hit by political turmoil and the risk of a U.S. trade war.
• Importantly, Governor Andrew Bailey this month reaffirmed the BoE's message that "a gradual approach to removing policy restraint remains appropriate". The BoE's November forecasts - which showed inflation staying just above its 2% target until 2027 - were based on market expectations of four rate cuts next year.

(Source: Reuters)

• Prime Minister, Dr. the Most Hon. Andrew Holness, officially opened the Princess Grand Jamaica and Princess Senses The Mangrove Resorts in Green Island, Hanover. The resorts’ development, representing a US$400.0Mn investment, promises to transform Jamaica’s tourism sector by creating sustainable economic growth and employment opportunities.
• The Prime Minitster acknowledged the substantial risks involved in such a large-scale project, emphasising the critical role of economic stability in attracting investments. The Prime Minister also shared an optimistic outlook for the tourism sector by announcing that at least three new hotels are in the pipeline for development, with several others already under construction and plans for 500-900 additional rooms by existing resorts.
• He added that, going forward, the sector will strategically pivot to focus on speed and efficiency, as well as improving infrastructure to support more investment opportunities. Prime Minister Holness further stated that most importantly, the sector will ensure that the people of Jamaica benefit from the stability, adding that, “those three things form the pivot.”
• Tourism Minister, Hon. Edmund Bartlett, similarly celebrated the development and commended the management of the Princess brand for their confidence in Jamaica. He acknowledged the transformative impact of the multimillion US dollar investment, which will create between 1,500 and 2,000 jobs for Jamaicans. Mr. Bartlett also highlighted the resorts’ unique ecological integration of a mangrove forest, incorporated as part of its attraction.
• The development features a triple-generation plant and solar facilities, designed to significantly reduce energy consumption. The plant is powered by natural gas and has a reverse osmosis facility for water treatment. Princess’ Managing Director, Enrico Pezzoli, stated that, currently, they employ over 1,400 staff, with plans to expand to 1,700 in the coming weeks.

(Source: JIS)

• Caribbean Cement Company Limited (CCC) has reached another major milestone in its kiln expansion project with the safe installation of a 160-tonne capacity surge bin and solid fuel equipment. This significant development ensures a stable and increased supply of fuel to the kiln, during the cement-making process.
• Managing Director of the Rockfort-based entity, Mr. Jorge Martinez, noted that the successful installation marks a significant step forward in enhancing CCC’s production capabilities. This investment is a main milestone of the expansion project to be completed in the first half of 2025. The project is aimed at increasing the efficiency and stability of the company’s operations.
• Martinez noted that the company remains focused on the continuous improvement of its infrastructure and processes to ensure long-term sustainability and value for its stakeholders, employees, and customers.
• Targeted for completion in early 2025, the expansion and increased capacity project is expected to strengthen the self-sufficiency of the cement-manufacturing industry, reduce dependency on imports, and reinforce the company’s commitment to supporting the growth of Jamaica’s construction sector and the wider Caribbean.

 (Sources: JSE & Carib Cement Limited)

• Barbados plans to upgrade the resilience of its water systems impacted by climate change by using funds freed up by a debt-for-climate swap. The country’s recently completed debt-for-climate swap is the world’s first to focus mainly on climate resilience measures. It joins a slowly growing list of similar financial structures linked more broadly to climate and nature goals, which are backed by multilateral institutions.
• The swap entails replacing part of Barbados’ national debt with cheaper debt, backed by multilateral institutions including the Inter-American Development Bank (IDB) and the European Investment Bank (EIB). Under the agreement, the provision of a sovereign sustainability-linked loan with a 3.25% coupon, lead arranged by CIBC Caribbean, enabled Barbados to buy back nearly US$300Mn (BBD600Mn) of its existing domestic bonds.
• The loan was backed by guarantees, comprising US$150Mn each from the IDB and the EIB, the latter under the EU Global Gateway Initiative. Upfront funding for the resilience project, totalling US$110Mn, is being provided by the IDB and the Green Climate Fund (GCF). This includes a US$40Mn grant from the GCF, a fund set up under the United Nations climate change process.
• Planned improvements include upgrading a sewage treatment plant into a modern water reclamation facility, which will produce water suitable for agricultural irrigation and recharging groundwater, as well as measures to reduce water losses and improve sewers, according to the institutions involved.
• By cutting marine and groundwater pollution, the upgrades will help safeguard marine ecosystems such as reefs, and groundwater quality, as well as protect public health. The boost to water supply will also help farmers to improve productivity in one of the world’s most water-stressed countries, which relies on groundwater from aquifers for much of its supply and has to import much of its food.
• Under the terms of the loan, Barbados has undertaken to hit targets related to the volume and quality of reclaimed water generated by the upgraded plant. If it fails to meet these requirements, the government will be subject to a financial penalty, which will be paid into the Barbados Environmental Sustainability Fund, a trust for environmental investments.

(Source: Impact Investor)

• Lawmakers in Brazil's lower house of Congress approved on Tuesday, December 17, 2024, a bill that includes regulations needed to implement a constitutional tax reform, following a Senate vote to approve the bill.
• The proposal will now head to President Luiz Inacio Lula da Silva for his signature. The bill sets rules needed to consolidate five existing taxes into a single consumption levy, also known as a value-added tax (VAT), with separate federal and regional rates.
• It also provides details on a new tax on products considered harmful to human health or the environment, such as cigarettes and alcoholic beverages. Lawmakers in the lower house added sweetened beverages back to the list after the senators removed it. Lawmaker Reginaldo Lopes, bill rapporteur in the lower house, said the changes approved by the house will set the overall consumption tax rate at 26.5%.
• The eagerly anticipated tax reform was approved by lawmakers last year and is a central pillar of Lula's plans to boost productivity and economic growth in Latin America's largest economy. Previous governments have attempted and failed to implement a tax reform of their own. Lula's government has also sent to lawmakers a separate bill, which still requires Senate approval, regulating how the VAT would be managed at the state level.

(Source: Reuters)

• Chinese leaders agreed last week to raise the budget deficit to 4% of gross domestic product (GDP) next year, its highest on record, while maintaining an economic growth target of around 5%, two sources with knowledge of the matter said.
• The new deficit plan compares with an initial target of 3% of GDP for 2024 and is in line with a "more proactive" fiscal policy outlined by leading officials after December's Politburo meeting and last week's Central Economic Work Conference(CEWC), where the targets were agreed but not officially announced.
• The additional one percentage point of GDP in spending amounts to about 1.3 trillion yuan ($179.4 billion). More stimulus will be funded through issuing off-budget special bonds, said the two sources, who requested anonymity as they were not authorised to speak to the media.
• These targets are usually not announced officially until an annual parliament meeting in March. They could still change before the legislative session. The State Council Information Office, which handles media queries on behalf of the government.
• The stronger fiscal impulse planned for next year forms part of China's preparations to counter the impact of an expected increase in U.S. tariffs on Chinese imports as Donald Trump returns to the White House in January.

(Source: Reuters)