• Jamaica is exploring strategic partnerships with the Republic of India to improve the supply and affordability of quality pharmaceuticals locally, in an effort to reduce the cost of healthcare in the country. This was announced by Prime Minister, Dr. the Most Hon. Andrew Holness, in a statement to the House of Representatives on Tuesday (October 8) on his recent visit to India.
• He said India is among the largest manufacturers and exporters of pharmaceuticals globally, with an industry valued more than US$50 billion. The Prime Minister further noted that India provides supplies for nearly all countries around the world.
• “Jamaica’s strategic location offers Indian businesses an ideal nearshore hub to access markets in the USA, Canada and Latin America and the Caribbean and, in return, India represents a large export market for Jamaican products like Blue Mountain coffee, aged rums and liqueurs. But the largest opportunity is tourism, and the Minister of Tourism will be visiting India in a few weeks from now… as a follow on… to get greater tourism from India to Jamaica,” the Prime Minister said.
• Dr. Holness pointed out that in the area of agriculture, discussions during his recent visit to India focused on the sharing of knowledge and best practices in critical inputs such as mechanisation.
• “The most important discussion in agriculture that we had was on affordable irrigation. India has some amazing technology in affordable irrigation, and we also discussed advanced seal technologies and expertise in crop development, agro-processing as well as investment facilitation and credit support.
• “What I particularly like about the Indian agricultural technology is that they rely heavily on using natural solutions… nature-based solutions in pest control and enhancing crop productivity, and I think Jamaica’s farmers would quickly embrace those technologies,” he said.

(Source: JIS)

• On October 8, 2024, the European Union (EU) Council removed Antigua and Barbuda from the EU list of non-cooperative jurisdictions for tax purposes. With this change, the list now consists of the following 11 jurisdictions: American Samoa, Anguilla, Fiji, Guam, Palau, Panama, Russia, Samoa, Trinidad and Tobago, US Virgin Islands, and Vanuatu.
• Antigua and Barbuda was included in the EU list of non-cooperative jurisdictions for tax purposes in October 2023 after a negative assessment from the OECD Global Forum concerning the exchange of information on request.  According to EU officials, the delisting followed “significant reforms” to Antigua and Barbuda’s tax framework. It has granted the country a supplementary review, which will be conducted in the coming months.
• Earlier this year, Antigua’s Parliament passed the Money Services Business (Transfer) Levy Act 2024, which made changes to the country’s 2002 Tax Information Exchange Act, 2007 International Foundations Act, International Trusts Act, and International Limited Liability Companies Act, the 2008 Corporate Management and Trust Service Providers Act, 2018 Tax Administration and Procedure Act and the International Business Corporations Act. The changes include the introduction of a standardized definition of “beneficial owner” and the implementation of annual attestation reports on beneficial ownership and control.
• Prime Minister Gaston Browne, in the Act’s explanatory notes, said that “the purpose of the Act is to ensure that beneficial owners are correctly identified, and that ownership information is available in all cases and is in accordance with international standard.”
• The EU list of non-cooperative jurisdictions for tax purposes was established in December 2017 as part of the EU’s external strategy on taxation. Jurisdictions are assessed based on a set of criteria laid down by the Council, covering tax transparency, fair taxation and implementation of international standards designed to prevent tax base erosion and profit shifting in EU countries. Since 2020, the Council has updated the list twice a year, with the next revision of the list scheduled for February 2025.

(Sources: European Union & Antigua Observer)

• The Dominican government anticipates that its Fiscal Modernization Project, presented at the National Palace, will take effect starting January 1, 2025, according to Finance Minister José (Jochi) Vicente.
• The Minister of Finance announced that the project (which seeks to increase tax revenues by 1.5% of GDP) aims to improve the quality of life for Dominicans through increased tax revenue. He emphasized that if tax revenues are not raised, the government will be unable to fund essential investments needed to meet the growing demands of the population.
• As part of the reform, which has been in development for over five years, the government plans to strengthen social assistance and significantly increase minimum wages in both the public and private sectors. These measures are intended to boost the economy and enhance citizens’ living standards.
• Minister Vicente emphasized that the additional funds will positively impact public services and citizens’ quality of life, using improved garbage collection - key to reducing diseases like dengue - as an example.
• He noted that higher tax revenues would support better public infrastructure and social services. Key infrastructure projects include the metropolitan train linking the capital to Las Américas International Airport, the Santo Domingo Oeste cable car, the San Cristóbal train, and the Santiago monorail. These initiatives are expected to reduce traffic congestion, taking 1.4 million vehicles off the main roads, thus improving mobility, reducing pollution, and enhancing overall quality of life.
• The proposal, expected to be submitted to Congress this week, not only seeks to boost tax collection but also addresses tax evasion, which Vicente characterized as a crime that hinders the delivery of essential public services. The final implementation timeline will; however, depend on the legislative process.

(Source: Dominican Today)

• A "substantial majority" of U.S. Federal Reserve officials last month supported a half-point rate cut to start the turn towards easier monetary policy, but there appeared more universal agreement that the initial move would not commit the Fed to any particular pace of rate reductions in the future, minutes of the two-day policy meeting showed on Wednesday.
• The minutes provided further detail on the breadth of opinion within the Fed as policymakers approved a rate cut of a size usually reserved for moments when the central bank is worried the economy is slowing fast and needs the support of looser financial conditions. The half-point cut drew only a single dissent from Board of Governors member Michelle Bowman, but the minutes said "some" participants supported only a quarter-point cut, while "a few others indicated they could have supported such a decision."
• The minutes “paint a slightly more cautious picture” of the Fed’s approach to rate-cutting, wrote Oliver Allen, senior U.S. economist with Pantheon Macroeconomics, and “suggests that the unease about a 50 bp cut went beyond Governor Bowman.” Still, the minutes indicated that even some policymakers who may have favored an initial quarter-point cut went along with the larger one as a way to catch up with how fast inflation had fallen without putting future rate cuts “on a preset course.”
• Supporters of the half-point cut "observed that such a recalibration of the stance of monetary policy would begin to bring it into better alignment with recent indicators of inflation and the labor market," said the minutes of the Sept. 17-18 session, at which the Fed lowered the benchmark policy rate to a range of 4.75% to 5.00% from the 5.25% to 5.50% range it had maintained since July of 2023.

(Source: Reuters)

• Germany's economy is expected to contract by 0.2% in 2024, the economy ministry said on Wednesday, which is likely to make it for the second year running the only member of the Group of Seven major industrial democracies to post shrinking output.
• The government is cutting its forecast from a previous projection of 0.3% growth for this year, as the expected recovery in the second half of the year failed to materialise. Germany's economy was already the weakest among its large euro zone peers and other G7 countries last year, with a 0.3% decline in gross domestic product.
• The economy contracted in the second quarter, sparking fears of a possible recession, defined as two consecutive quarters of contraction. Early indicators such as industrial production and business climate suggest that the economic downturn has continued into the second half of the year, the ministry said.
• The economy has not grown strongly since 2018 due to its structural problems and geopolitical challenges, Habeck said. The strength of the German economic model was based on two pillars: cheap energy for industry from Russia and functioning global markets for its exports, the economy minister said.
• To counter the cyclical and structural challenges, it has agreed to a growth package of 49 measures. "If they are implemented, the economy will be stronger and more people will come back to work," Habeck said.
• Growth is expected to resume in 2025 due mainly to increased private consumption resulting from higher wages, falling inflation and tax relief, the ministry said. Lower interest rates should also stimulate consumption, it said. However, construction investments will not contribute to growth again until 2026, the ministry said.

(Source: Reuters)

• The Statistical Institute of Jamaica (STATIN) Labour Force Survey (LFS) revealed that in April 2024, the unemployment rate was 4.2%. There were 62,800 unemployed persons; females accounted for 58.1% of those unemployed. There were 29,400 unemployed youth (aged 15 -24) in April 2024, of which 15,100 or 51.4% were males.
• STATIN noted that the changes made to the LFS represent a break in the series, and as such, data comparability with previous quarters is not advised. However, for context, the unemployment rate reported for January 2024 was 5.4%.
• STATIN revised its survey to incorporate the latest international standards and guidelines from the International Labour Organization (ILO), which resulted in a significant change in the definition of employment and unemployment. Additionally, the reference week for the LFS has shifted from the last full week of the previous quarter to the first full week of the current quarter and the minimum age for inclusion in the LFS has been raised to 15, which is consistent with the ILO recommendations (previously 14 years old).
• Overall, the labour force comprised 1,483,100 persons, including 788,500 males (53.2%) and 694,600 females (46.8%), with an overall labour force participation rate of 63.3%.
• Of this, 1,420,300 members of the labour force were employed, with 762,200 males (53.7%) and 658,100 females (46.3%). Among the employed population, 24,800 or 1.7% were underemployed (time-related), meaning they worked part-time but wanted additional hours.
• The occupation group with the highest number of employees was ‘Services and Sales Workers’, employing 324,800 individuals, representing 22.9% of the total employed population. The second largest was ‘Elementary Occupations’, employing 192,900 individuals, followed by ‘Skilled Agricultural, Forestry and Fishery Workers’ which employed 187,800 persons. Regarding industry groups, ‘Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles’ was the largest employer, engaging 265,100 individuals or (18.7%).
• Of note, there were 93,900 youth who were not employed, not enrolled in educational activities or currently in training (NEET), of which 48,700 were males and 45,100 females.
• Given the sharp slowdown in Jamaica's economy in the second quarter ( 0.2% from 1.9%) in Q1 2024, and the projected contraction of -0.1% to -1.0% in Q3 due to the impact of Hurricane Beryl, unemployment levels could inch up in subsequent surveys. Of note, recent layoffs by a major BPO company could cause the rate to rise, especially if other operators follow suit.
• The Labour Force Survey is expected to resume its regular quarterly schedule following the delay in the January 2024 report, likely due to the survey’s revisions.

(Source: STATIN)

• The Caribbean Community (CARICOM) and the African Union (AU) have signed a Memorandum of Understanding (MoU) to enhance effective cooperation and collaboration between the organisations and their peoples.
• Signed in the margins of the recently concluded 79th Session of the United Nations General Assembly in New York, the MoU envisages the creation of a conducive environment for investment on the African continent and in CARICOM.
• In addition to promoting investments, the MoU seeks to deepen relations by creating platforms for closer people-to-people interaction and solidarity through initiatives including a diaspora volunteer exchange as a framework for associating people with development. The MoU also outlines modalities for cooperation and collaboration, information sharing, as well as its implementation.
• The MoU was signed by the CARICOM Secretary-General, Dr Carla Barnett, and the Deputy Chairperson (DCP) of the African Union (AU) Commission, Dr Monique Nsanzabaganwa, on behalf of the African Union. (CARICOM).

(Source: CARICOM)

• The official opening of Barbuda’s new international airport marks a significant milestone for the island’s economic development.
• The Barbuda International Airport, soon to be renamed the Burton-Nibbs International Airport, is expected to bring numerous benefits to the sister island of Antigua and Barbuda. Prime Minister Gaston Browne, in his remarks during the ceremony, emphasised that the airport will catalyze growth and development.
• “This in essence will actually open up Barbuda. It’s going to be the catalyst for growth and development to attract more tourists and investments, increased trade, and an enormous amount of opportunities, including career opportunities for Barbudan people,” he said.
• The 6,100-foot runway can accommodate larger aircraft, including private jets and planes as large as the Embraer E170 which typically seats around 72 passengers, opening up possibilities for direct flights from North America and Europe soon.
• Prime Minister Browne also emphasised his vision for Barbuda’s development, stating that the island would soon have access to many of the amenities currently available in Antigua.
• Looking ahead, Barbuda is anticipated to see other developments including the repurposing of $35Mn in funding to build out concrete road infrastructure, with construction expected to begin in 2025. Educational opportunities are also set to be enhanced with the establishment of a branch of the Antigua and Barbuda Institute of Continuing Education (ABICE) on the island.

(Source: Antigua Observer)

• The U.S. trade deficit narrowed sharply in August as exports increased to a record high, suggesting trade could have little or no impact on economic growth in the third quarter. The smaller-than-expected trade gap reported by the Commerce Department on Tuesday added to data on the labour market and consumer spending in suggesting that the economy remained on solid footing last quarter.
• The economy's strength likely has no impact on expectations that the Federal Reserve will cut interest rates again next month. It, however, reinforced views that the U.S. central bank did not need to pursue another half-percentage point rate reduction. Economists at Goldman Sachs maintained their forecast for gross domestic product to rise at a 3.2% annualised rate in the July-September quarter after the trade data.
• "This report says that net trade supports GDP growth in August," said Carl Weinberg, chief economist at High Frequency Economics. "Putting together July and August figures suggests that net trade is flat so far in third quarter, making no significant addition or subtraction to GDP growth so far." Trade has subtracted from gross domestic product for two straight quarters.
• The trade gap contracted 10.8% to $70.4 billion, the smallest in five months, from a revised $78.9 billion in July, the Commerce Department's Bureau of Economic Analysis said.
• Economists polled by Reuters had forecast the trade deficit would narrow to $70.6 billion from the previously reported $78.8 billion in July. Exports increased 2.0% to a record $271.8 billion. Goods exports surged 2.5% to $179.4 billion, the highest level since September 2022. They were boosted by a $1.7 billion rise in capital goods to a record high, mostly reflecting telecommunications equipment, civilian aircraft, computer accessories as well as other industrial machinery.

(Source: Reuters)

• Several European Central Bank policymakers argued their case on Wednesday for another interest rate cut next week, even if some of their colleagues remained unconvinced as turmoil in the Middle East fuels volatility in energy costs.
• The ECB has already lowered rates twice this year, and a cut to a 3.5% deposit rate on Oct. 17 is almost fully priced in by financial markets, indicating investors expect the bank to accelerate the pace of policy easing given a weak economy and an unexpectedly quick slowdown in price growth.
• "A cut is very likely, and it will not be the last one, the rhythm depending on how the fight against inflation evolves," French central bank chief Francois Villeroy de Galhau told Franceinfo radio station. That message is fully in line with expectations as more than 90.0% of economists polled by Reuters anticipate a cut next week with a similar majority betting on a follow-up move in December.
• "Even if we have one cut of 25 basis points now and another one in December, we will be back to just 3.0% — still in highly restrictive territory," Greek central bank chief Yannis Stournaras told the Financial Times in his support for back-to-back moves.
• The issue is that the economy has been stagnating for most of the past year, the labour market is softening, wage growth is slowing, and inflation has fallen quicker than the ECB predicted. However, Belgium's Pierre Wunsch was still undecided, arguing that there were opposing forces at play as growth is weak but domestic inflation is still too quick and geopolitical tensions have pushed energy costs higher.
• Financial investors now see the ECB's deposit rate falling to 3.0% by the end of the year and 2.0% by the end of 2025, hitting what a large part of the financial community considers the neutral rate, a level that neither stimulates nor slows economic growth.

(Source: Reuters)