• Prime Minister, the Most Hon. Andrew Holness, has highlighted the need for the strengthening of engagement between CARICOM and the African continent, noting that “great economic potential” exists between the regions.
• The African Continental Free Trade Agreement (AFCFTA) serves as an enabling environment for trade and investment opportunities across the regions. The Minister highlighted that there is potential in the agro industry and logistic sector, and Jamaican companies have already invested in Africa. Opportunities also exist for scientific research, healthcare, technological innovation and digitisation, and tourism.
• There is solidarity between the two regions in addressing issues such as development financing, debt sustainability, and climate change in various regional and international fora while working for deeper integration.
• The African Union (AU) has also provided access to COVID-19 vaccines and other critical medical supplies to Caribbean countries through the Africa Medical Supplies Platform (AMSP). This has been a game-changer for the continent and the region.
• The Prime Minister added that the timely dialogue between the two regions will serve to entrench their platform of bonds and common historical experiences, which have been enriched by cultural, economic, and political affinities.

(Source: JIS News)

• Mexican regulator’s recently approved Basel III liquidity rules, requiring one year of stable funding, may be a challenge for some small- and medium-sized banks with highly concentrated funding structures, according to Fitch Ratings. However, it is expected that the largest and second-tier banks will easily meet the new rules.
• On Aug. 23, 2021, the financial authorities published an update to the Liquidity Coverage Ratio (LCR) rules as well as the final rules to implement the Net Stable Funding Ratio (NSFR) for Mexican banks. The introduction of a minimum NSFR of 100% should be a credit positive for the banking system as a whole, improving resilience during cyclical downturns by increasing liquidity and reliance on stable funding sources.
• The new rules implementing the NSFR for Mexican banks will take effect in March 2022 and will help close the gap on Basel III implementation with its G20 peers. Some banks may have to adjust their balance sheets to meet the new requirements, most likely by utilizing effective asset management to reduce the required amount of stable funding.

(Source: Fitch Ratings)

• While headline growth in Panama will be strong at 11.2% in 2021 and 5.8% in 2022, Fitch Solutions does not expect that real GDP will recover from the COVID-19 pandemic until 2023. A steady rebound of industrial activity and strong export growth will help bolster the economic recovery following the country's 17.9% contraction in 2020.
• The current account balance will return to a deficit in the coming quarters as rebounding imports modestly outpace export growth, widening the goods trade deficit. In addition, stronger profits for foreign-owned corporates that operate in Panama will underpin a greater outflow of repatriated investment income, causing the primary income deficit to swell.
• Panama’s fiscal deficit is expected to narrow to 7.5% of GDP in 2021 and 5.6% in 2022, from 9.8% in 2020, as rebounding economic growth and Panama Canal shipping fees support government revenue. President Laurentino ‘Nito’ Cortizo will likely refrain from pursuing fiscal consolidation in the near term, particularly as his government extends spending programmes to bolster economic activity.
• While Cortizo’s embrace of expansionary fiscal measures and the country’s robust national vaccination programme will help bolster short-term stability, his long-term aim of narrowing the deficit and the potential for constitutional changes highlight key challenges once the economic impact of COVID-19 subsides..

(Source: Fitch Solutions)

• Purchasing managers’ indices continue to point to a weakening of growth momentum across developed markets (DM), supporting Fitch Solutions’ view that DM growth has peaked.
• Despite improving labour market conditions, the rise in COVID-19 cases in July and August 2021 has resulted in a weakening of consumer confidence and monthly retail sales fell in most DMs in July.
• Fitch retains its view that high inflation rates across DMs will only be temporary; however, inflation risks have shifted to the upside.
• Elevated inflation has increased pressure on major central banks to consider dialing down asset purchases, which could happen as soon as Q421. However, Fitch believes that the major DM central banks will not hike interest rates before 2023 so as not to stifle the economic recovery.

(Source: Fitch Solutions)

• The Bank of Canada left rates unchanged on Wednesday and said it expects growth to strengthen in the second half following a shock contraction last quarter. The central bank left its key interest rate at a record low of 0.25% and maintained its current quantitative easing program.
• Canada's economy unexpectedly shrank in the second quarter, data showed last week, and a preliminary estimate for July showed another contraction, putting pressure on its economic recovery.
• "The Bank continues to expect the economy to strengthen in the second half of 2021, although the fourth wave of COVID-19 infections and ongoing supply bottlenecks could weigh on the recovery," the Bank of Canada said in a statement.
• The central bank kept its guidance that economic slack would be absorbed sometime in the second half of 2022, even with the surprise economic contraction in the second quarter and a softer start to the third quarter.

(Source: Reuters)

• The RJRGLEANER Communications Group has signed an agreement to acquire a 15.0% equity stake in StarApple Analytics Limited, a startup data analytics and artificial intelligence consulting company operating in Jamaica, which plans offer services regionally and beyond. The acquisition was done through the Group’s St. Lucia-based subsidiary, Media Plus Limited.
• StarApple, which was founded in December 2019, provides three main service offerings including data analytics consulting, artificial intelligence model development and corporate data analytics training. The company is poised to exploit growing corporate demand for its services arising from ongoing digital transformation strategies.
• The investment continues the group’s strategic objective of diversification into complementary businesses, following the increase in its ownership stake in the e-commerce business, Gustazos, to 50.0% and the acquisition of a 10.0% stake in digital marketing player ePost Caribbean Limited. The investment also aligns with the Group’s strategy of building capacity to harness insights from its vast store of market data to buttress business decisions and enhance client offers.

(Source: JSE News)

• Jamaica Producers Group Limited (‘JP’) announced its acquisition of a 50% interest in Co Beverage Lab, S.L. (CBL), effective September 1, 2021. JP is now the largest shareholder of CBL, a producer of fresh juice, based in Barcelona, Spain. According to Mr. Jeffrey Hall, Chief Executive Officer of JP: “The acquisition is directly in line with the stated strategic plan of Jamaica Producers Group Limited which includes the development of major new markets in Europe for fresh juice.”
• CBL serves a range of customers in Southern Europe and will target business opportunities in that market. JP currently operates A.L. Hoogesteger Fresh Specialist B.V. which is among the market leaders in fresh juice in Northern Europe and is JP’s largest business by revenues. Mr. Hall further stated: “CBL is a useful platform for growth. We believe it has the team and the facilities to benefit from JP’s larger established footprint and overall expertise in fresh juice.”
• This acquisition will help JP to expand its global footprint and grow its top and bottom-line to provide more value for investors.

(Source: JSE News)

• The Government has confirmed that The Bahamas’ national debt has breached the $10Bn mark due to the borrowing blow-out inflicted by the combination of COVID-19 and Hurricane Dorian.
• The Ministry of Finance, in its 2020-2021 full-year and fourth quarter “fiscal snapshot”, revealed Central Bank of The Bahamas data showing that the combination of the Government’s $9.909Bn direct debt - together with loans it has guaranteed on behalf of various state-owned enterprises (SOEs)- had taken the national debt to $10.356Bn at end-June 2021.
• It also confirmed the substantial increase in The Bahamas’ debt-to-GDP ratio, which rose from 66% of the latter at end-June 2020 to 86.3% some 12 months later. This resulted from the collapse in revenues due to the COVID-related contraction in economic activity as well as increased spending on business and social support measures to prevent families and wider society from imploding.
• While the Government had little choice but to respond to COVID and its devastating fall-out in the way that it did, and save the businesses and households that it could, the latest “snapshot” - issued just ten days before the upcoming general election - shows the scale of the economic and fiscal crisis confronting the next administration.
• Higher debt will likely result in greater future taxes, and the implementation of fiscal consolidation measures to achieve debt reduction and improve fiscal balances. It could also result in higher borrowing costs for the government.

(Source: The Tribune & NCBCM Research)

• The Guyanese Government has approached the Inter-American Development Bank (IDB) for a loan totalling US$1,817,764 to support the development, and implementation of a Medium-Term Development Strategy which will leverage the country’s emerging oil and gas revenues. The strategy would be used to grow investment, increase employment and strengthen the economic resilience of the country.
• According to the loan documents seen by Kaieteur News, the funding would be spent to: strengthen the technical capacity of the government to lead economic transformation in Guyana; and to achieve economic diversification and mid-term development strategy.
• It is expected to include a forum for infrastructure opportunities, targeted investor workshops to assist in structuring specific Public Private Partnership (PPP) projects, public consultation, and awareness building through strategic communications to investors, stakeholders and the general public will be held.
• There will also be several activities, such as the engagement of a strategic advisor on economic development, to facilitate consultations and provide insight into success stories on economic diversification, amongst others.

(Source: Kaieteur News)

• British Prime Minister Boris Johnson set out plans on Tuesday to raise taxes on workers, employers and some investors to try to fix the health and social care funding crisis. The government is likely to confirm plans to go ahead with a 10 billion pound ($14 billion) tax increase.
• The move aimed at tackling the backlog in Britain's health system, which has seen millions waiting months for treatment from the state-run National Health Service, after resources were refocused to deal with COVID-19.
• The government on Monday announced an extra 5.4 billion pounds ($7.5 billion) for the NHS in England over the next six months to help bring down waiting lists and bolster the COVID-19 response.
• A 10 billion-pound boost to social care funding would require employees and employers each to pay an extra 1% in national insurance. Business groups say the extra burden could deter firms from hiring. A similar amount could be raised by adding just under 1.5 percentage points to the basic and higher rates of income tax.

(Source: Investing.com)