• Japan kept its forecasts unchanged on Thursday for a return to a budget surplus over the long-term, even though the impact of the coronavirus pandemic on its economy and debt pile remains uncertain.
• In its twice-yearly fiscal and economic projections, the government forecast that the primary budget, excluding new bond sales and debt servicing, would achieve a surplus of 300 billion yen ($2.9Bn) in the fiscal year starting April 2029.
• That was unchanged from its previous forecast released last July when it pushed back the projection for achieving the surplus by two years.
• The uncertainty hanging over the economic outlook due to COVID-19 is particularly painful for Japan, which is saddled with a public debt burden more than twice the size of its $5 trillion economy, the biggest among industrialized nations.

(Source: Reuters)

• Spending on payment cards in Britain last week stood 35% below pre-pandemic levels with the country in its third national COVID-19 lockdown, although the hit was not as severe as seen during parts of last year.
• The Bank of England's figures, published for the first time on Thursday, showed a sharp slowdown this month after a surge in spending during December when parts of the economy reopened temporarily even though COVID-19 cases were soaring.
• While spending during the week to Jan. 14 was running below its level during the previous lockdown in November, it was still some way above the levels during the first lockdown which began in March 2020.
• Other surveys have similarly pointed to renewed weakness in consumer confidence, with Britain likely now in a double-dip recession as it struggles to regain control of the virus, according to a Reuters poll of economists last week.

_{(Source: Reuters)}

• The Bank of Jamaica (BOJ) will maintain its dovish stance through end-2021 in an effort to support Jamaica’s economic recovery from the COVID-19 pandemic.
• Fitch Solutions forecasts that consumer price inflation will accelerate to an average of 5.8% y-o-y in 2021, up from 5.2% in 2020, due to rebounding consumer demand and higher energy prices.
• A food price shock poses upside risks to inflation and interest rate forecasts, as worse agricultural conditions than we currently expect could lead to a spike in headline inflation, causing the BOJ to hike its monetary policy rate.

(Source: Fitch Solutions)

• The inflation rate for December 2020 as measured by the All Jamaica Consumer Price Index was 1.3%.
• The inflation rate for December was mainly due to increases in the index for the divisions ‘Food and Non-Alcoholic Beverages’, ‘Housing, Water, Electricity, Gas and Other Fuels’ and ‘Transport’.
• For the month, the index for the division ‘Food and Non-Alcoholic Beverages’ increased by 2.4% mainly due to higher prices for vegetables, especially tomatoes, carrots, cabbage, and sweet pepper. However, the movement in the class was tempered by lower prices for tubers such as sweet potato and yam.
• This contributed to a fiscal-year-to-date (April 2020 – December 2020) inflation rate of 5.1% and point-to-point (December 2019 – December 2020) rate of 5.2% which was near the midpoint of the inflation target range.

(Source: Statin)

• Fitch Solutions forecast Panama’s fiscal deficit will narrow to 7.4% of GDP in 2021, from an estimated 10.3% in 2020, amid a rebound in economic activity that will support revenue growth.
• However, the agency has revised its 2021 forecast from 6.7% previously, due to limited prospects for expenditure consolidation and revisions to the country’s deficit cap.
• Despite wider deficits over the coming years, it expects investor appetite for Panamanian assets will limit borrowing costs and contain financing risks.

(Source: Fitch Solutions)

• Fitch Solutions expects that credit growth in Mexico will rise to 1.4% y-o-y in 2021, up from -1.2% in 2020, as the economy rebounds and monetary conditions remain loose.
• Other indicators of the banking sector’s health, including leverage and non-performing loans, do not suggest the banking sector’s stability is likely to be threatened in the near term.
• Fitch Solutions maintains its constructive long-term outlook on the sector, given Mexico’s economic upside and relatively low levels of banking sector penetration.

(Source: Fitch Solutions)

• Oil prices rose in early trade on Wednesday, adding to solid gains overnight, on expectations the incoming U.S. administration will go ahead with massive stimulus spending that would boost fuel demand and drawdown crude stocks.
• U.S West Texas Intermediate (WTI) crude futures climbed 23 cents, or 0.4%, to $53.21 a barrel, building on a 1.2% rise on Tuesday. Brent crude futures rose 25 cents, or 0.5%, to $56.15 a barrel, adding to a 2.1% gain on Tuesday.
• U.S President-elect Joe Biden's Treasury Secretary nominee Janet Yellen urged lawmakers on Tuesday to "act big" on pandemic relief spending, reinforcing hopes of massive spending to boost growth.
• The oil market continued to rise despite the International Energy Agency has cut its outlook for first-quarter oil demand by 580,000 barrels per day, due to tight lockdowns in Europe and border closures to stop soaring COVID-19 infections.

(Source: Reuters)

• Janet Yellen, U.S. President-elect Joe Biden's nominee for Treasury Secretary, urged lawmakers on Tuesday to "act big" on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of a higher debt burden.
• In more than three hours of confirmation hearing testimony, the former Federal Reserve chair laid out a vision of a more muscular Treasury that would act aggressively to reduce economic inequality, fight climate change and counter China's unfair trade and subsidy practices.
• Taxes on corporations and the wealthy will eventually need to rise to help finance Biden's ambitious plans for investing in infrastructure, research, and development, and for worker training to improve the U.S. economy's competitiveness, she told members of the Senate Finance Committee.

(Source: Reuters)

• Paramount Trading (Jamaica) Limited recorded a 50.2% (or $19.85Mn) year over year reduction in unaudited net profit to $19.70Mn (EPS: $0.013) for the six months ended November 30, 2020.
• The main drivers for this outturn were 13.0% (or $99.61Mn) and a 44.3% (or $10.15Mn) fall-off in revenues and other operating income, respectively. A 39.0% (or $6.90Mn) increase in net finance costs due to a rise in long-term liabilities also contributed to the lower net profit.
• The unfavorable performance of the aforementioned drivers was tempered by a 15.8% (or $84.84Mn) reduction indirect expenses and a 4.8% ($9.13Mn) drop in operating expenses. The company continues to benefit from its efforts at cost rationalization and restructuring during this time.
• The company’s stock price has fallen by 13.8% since the start of the year, closing Thursday’s trading session at $1.25. At this price, the stock currently trades at a P/E of 59.5x earnings, which is above the Junior Market Distribution Sector Average of 20.7x.

(Source: Paramount Financials)

• Mexico on Thursday published rules implementing a new law on foreign agents, such as U.S. drug-enforcement officials, watering down legislation that caused major friction with the United States and raised fears it could block counter-narcotics cooperation.
• Lawmakers last month amended Mexico’s security law to restrict the work of foreign security officials on Mexican soil despite fierce opposition from Washington, straining ties and calling into question extensive cooperation with the United States.
• The change in law, requested by President Andres Manuel Lopez Obrador, was widely seen as retaliation against the United States following the arrest on drug charges of former Mexican Defense Minister Salvador Cienfuegos in Los Angeles in October.

(Source: Reuters)