• In August 2021, Fitch Solutions decided to keep its 2021 global growth forecast unchanged at 5.7%. Real GDP data revealed that growth momentum remained strong in Q2 2021 in large part owing to the significant easing of restrictions in recent months, which led to a significant pickup in activity throughout the first half of the year.
• Despite the acceleration in activity over the second quarter, Fitch continues to monitor two key areas, which could pose downside risks to its global outlook. First, there has been a sharp pick up in the number of infections globally, particularly of the Delta variant, and second, high frequency data are easing already.
• Rising caseloads of the Delta variant pose a downside risk to growth, particularly for countries with low vaccination rates. Initial data suggest that despite a sharp rise in the number of cases, fatality rate remains low in regions such as North America and Europe, where vaccination rates are higher than their emerging market counterparts.
• High frequency data suggest that momentum is starting to ease. It seems that the global PMI (Purchasing Managers Index) may have peaked already, which suggests that incoming data are no longer beating expectations to the degree that they were several weeks ago. While slower growth is to be expected over the coming months as base effects wear off, Fitch notes that shortages and supply chain challenges are also factors behind the weakening of momentum.

(Source: Fitch Solutions)

• U.S. consumers’ expectations for inflation over the medium term rose to an eight-year high in July, according to a Federal Reserve Bank of New York survey. The median survey respondent anticipated an inflation rate of 3.7% in three years’ time, the highest since August 2013 and up from 3.6% in June, the New York Fed said Monday. Expectations for inflation over the next year rose to a record 4.8%.
• Consumers polled by the New York Fed said they expected rents to increase 9.8% in the coming year, the highest reading since the survey began in 2013. Expected changes in medical care costs over the next 12 months ticked up to 9.5%, while the expected change in gas prices moderated to 8.1%.
• Forecasters polled by Bloomberg expect the Labour Department’s monthly report on consumer prices, to be published Wednesday, will show that the annual inflation rate moderated slightly in July after rising to a 13-year high of 5.4% in June.

(Source: Bloomberg)

• Owing to a 20.0% increase in revenues, for the 6-months ending June 2021, tTech Limited reported a 51.0% year over year rise in net profit to $8.62Mn (EPS: $0.15).
• Revenues improved as tTech continued to benefit from the momentum realized in Q1 with the addition of several Cybersecurity related projects to its roster, and the continuation of the Data Protection Service campaign which has strengthened its pipeline. Also contributing positively was the company’s highly successful business technology event, TechCon, that was held virtually this year on May 18‐19.
• The rise in revenues was also sufficient to outweigh the 19.9% and 23.5% expansion in admin expenses and direct costs, respectively.
• tTech has entered the second phase of the Junior Market incentive scheme where 50% of the normal tax rate equivalent to 12.5%, applies to its profits during the second five years of listing on the Junior Market of the Jamaica Stock Exchange. Therefore, tax expenses will begin to adversely impact net income. However, the company is eligible for the Employment Tax Credit which will further reduce the rates payable to 8.75% for the next 5 years and 17.5% thereafter, which will ease the full effects of taxation on its bottom-line.
• tTech’s stock price has appreciated by 2.3% since the start of the year and closed Wednesday’s trading session at a price of $4.40 per share. At this price, the stock trades at a P/E ratio of 18.3x earnings which is below the Junior Market average of 21.0x.

Source: (tTech Financials)    

• Fitch Solutions has made notable upward revisions to many of its real GDP forecasts in Latin America in recent months. Overall, the agency expects the region to grow 5.2%, up from 4.4% previously (-6.7% in 2020), and 3.3% in 2022.
• Growth will continue to be driven by external demand for commodities and economies’ growing resilience to the impact of public health lockdowns. However, a return to pre-pandemic economic activity remains dependent on vaccinations.
• Despite Fitch’s upward revisions, risks remain solidly to the downside due to the spread of variants of COVID-19 and volatile political dynamics.

(Source: Fitch Solutions)

• Fitch Solutions revised down its Panamanian real GDP growth forecast to 11.2% in 2021, from 12.2% previously, to reflect ongoing public health restrictions that will hamper domestic demand. The agency forecasts 5.8% growth in 2022, meaning that real GDP will not recover from the COVID-19 pandemic until 2023. 
• While a steady rebound of industrial activity and strong export growth will make Panama a regional growth outperformer, this largely reflects base effects from a 17.9% contraction in 2020. 
• Fitch highlights downside risks to its short- and long-term growth forecasts due to the potential for future global economic disruptions from the Delta variant and any fiscal adjustments carried out by the Panamanian government in the coming years to weaken public investment. 

(Source: Fitch Solutions)

• Low-income countries have been hard hit by the pandemic. Their large financing needs are only likely to grow as they deal with the crisis and its economic aftermath. The IMF has approved a far-reaching package of support that would expand their access to financial assistance at zero-interest rates, while providing stronger safeguards against taking on debt they cannot handle.
• IMF has provided financial assistance to 50 low-income countries totaling $13 billion in 2020 compared to an average of $2 billion a year pre-pandemic. It also provided $739 million in grant-based debt service relief to 29 of its poorest and most vulnerable members.
• Three-quarters of the new lending came from the Poverty Reduction and Growth Trust (PRGT)–the IMF’s vehicle for zero-interest loans to low-income countries. The lion’s share was in the form of emergency disbursements with limited conditionality.
• Looking ahead, low-income countries will continue to require exceptional levels of external financial support as they recover from the pandemic, and boost investment to build more resilient and inclusive economies.

(Source: IMF and NCBCM Research)

• The U.S. Centers for Disease Control and Prevention (CDC) on Tuesday issued a new 60-day moratorium on residential evictions in areas with high levels of COVID-19 infections citing the raging Delta variant after having rejected an earlier push by the White House.
• The order applies to about 80% of U.S. counties that have substantial or high COVID-19 community transmission rates and covers about 90% of the U.S. population. The CDC said it will expand the protections to additional counties if they see a rise in COVID-19 cases.
• "The emergence of the Delta variant has led to a rapid acceleration of community transmission in the United States, putting more Americans at increased risk, especially if they are unvaccinated," CDC Director Rochelle Walensky said in a statement. "This moratorium is the right thing to do to keep people in their homes and out of congregate settings where COVID-19 spreads."

(Source: Reuters)

• The Rural Economic Development Initiative (REDI) ll is being implemented by the Jamaica Social Investment Fund through a loan agreement from the World Bank valued at US$40.0Mn. The objectives of the project include enhanced access to markets and climate-resilient approaches for targeted beneficiaries. 
• Managing Director of JSIF, Omar Sweeney, said the undertakings are critical in supporting community tourism development in the country, particularly in light of the COVID-19 pandemic and its impact on the sector. 
• Project Manager of REDI II, Kemeisha Batchan, has noted that the demand study will help to better position Jamaica internationally, regionally and locally based on the trends in demand. It will also assist in developing the types of products and experiences needed to be able to meet the various market tastes. 
• Further, Dr. Henry, JSIF Chairman noted that there are myriad linkages and synergies that can be derived from a strengthened community tourism product, which leverages outputs and relationships with key industries.

Source: (JIS News)

• Tourism Minister, Hon. Edmund Bartlett, has said that the investment climate remains positive despite the tourism sector being impacted by the COVID-19 pandemic. He noted that investor confidence in Jamaica is reflective of the level of multibillion-dollar investment projects that are now under way or programmed for implementation over the next two years. 
• Bartlett highlighted several projects that were completed in 2020 or are nearing completion. He further indicated that there are several projects slated for implementation between 2021-2023 which include the construction of over 7500 rooms across the island. 
• These investment projects have helped to place the sector on a path to recovery while creating more job opportunities for Jamaicans and further bolstering the growth of Jamaica’s tourism and economy. 
• The strategic public-private investment partnerships will be crucial to the tourism industry’s economic recovery from the effects of COVID-19. Continued investor confidence, even in a pandemic environment, is evidence that Jamaica is still a coveted destination and a powerful global brand.

 (Source: JIS News)

• The International Monetary Fund’s (IMF) top executive yesterday hailed The Bahamas for leading the revolution” by becoming the first nation to launch a Central Bank Digital Currency (CBDC). 
• Mr Rolle (Bahamian Central Bank Governor) described the Sand Dollar as “the glue that will connect the system together” in terms of modernizing The Bahamas’ payments system infrastructure, with its digitization having “started from ground zero” more than a decade ago. 
• Explaining the rationale for launching the digital Bahamian dollar, he added that it holds out the potential for reduced costs and greater efficiency in payments transactions. 
• This digitization also promises greater financial inclusion and access to financial services, especially in remote Family Island communities without a physical commercial bank branch, while also bringing the so-called ‘unbanked’ and ‘under-banked’ into the formal system.

(Source: The Tribune)