• Another surge in energy prices pushed wholesale goods prices to their biggest one-month jump on record in February, according to Labour Department data released Tuesday. Final demand prices for goods jumped 2.4% for the month, the largest move ever in data going back to December 2009, the Bureau of Labour Statistics said. 
• That pushed the headline producer price index up 0.8% on the month, which was slightly lower than the 0.9% Dow Jones estimate. Excluding food, energy and trade services, the so-called core PPI rose just 0.2%, well below the 0.6% expectation. 
• On a year-over-year basis, headline PPI rose 10%, the same as January and tied for the biggest 12-month move ever. The data came during the week of Feb. 13, before the Russian invasion of Ukraine. Energy prices surged even more as the war began, and will show up in next month’s report. 
• The numbers coincide with most other inflation gauges running around 40-year highs, thanks to price increases that have spread beyond volatile gas and grocery prices and across a broad spectrum of consumer goods and services. In response to the inflation trend, the Federal Reserve is expected on Wednesday to raise interest rates for the first time since December 2018. 
• Gasoline was still the main story in February when it came to final demand prices. Some 40% of the increase in wholesale goods prices came from gasoline, which rose 14.8%. Diesel fuel and electric power also helped feed an 8.2% increase in final demand energy prices, while motor vehicles and equipment and dairy prices also climbed. Various prices for food products, such as fresh and dry vegetables along with beef and veal showed declines.

(Source: CNBC News)

• The Government is making a special provision, in the amount of $2 billion, to provide targeted support to Jamaicans who are most adversely affected and have the least ability to absorb the impact of high gas and energy prices. 
• Though discussions are in their initial phases, the provision is expected to target key stakeholders such as taxi operators, who have fixed fares, as well as children on the Programme of Advancement Through Health and Education (PATH), who have transportation costs. 
• Additionally, the government has a long term strategy to reduce Jamaica’s dependence on petroleum. Given that majority of Jamaica’s import bill is for petroleum used by cars, the government intends to provide incentives to promote the use of Electric Vehicles, which is a cheaper alternative. 
• This incentive will come in the form of reduced import duty from 30% to 10%, for an initial five-year period. The measure will be executed in the first quarter of the financial year 2022/2023. 
• As the government combats gas and energy prices by incentivizing Electric Vehicle purchases, petroleum retailers may see a gradual demand reduction.

(Source: JIS and NCBCM Research)

• The Government is making a special provision, in the amount of $2 billion, to provide targeted support to Jamaicans who are most adversely affected and have the least ability to absorb the impact of high gas and energy prices. 
• Though discussions are in their initial phases, the provision is expected to target key stakeholders such as taxi operators, who have fixed fares, as well as children on the Programme of Advancement Through Health and Education (PATH), who have transportation costs. 
• Additionally, the government has a long term strategy to reduce Jamaica’s dependence on petroleum. Given that majority of Jamaica’s import bill is for petroleum used by cars, the government intends to provide incentives to promote the use of Electric Vehicles, which is a cheaper alternative. 
• This incentive will come in the form of reduced import duty from 30% to 10%, for an initial five-year period. The measure will be executed in the first quarter of the financial year 2022/2023. 
• As the government combats gas and energy prices by incentivizing Electric Vehicle purchases, petroleum retailers may see a gradual demand reduction.

(Source: JIS and NCBCM Research)

• Dominica has suspended, with immediate effect, applications from nationals of Russia and Belarus seeking citizenship under the island’s Citizenship by Investment Program (CBI) that caters to large foreign investors. 
• Dominica’s position to suspend nationals from Belarus and Russia from the CBI program follows Moscow’s invasion of Ukraine and the United Nations General Assembly (UNGA) decision to condemn Moscow for its action. This measure is to safeguard the Dominica community and the integrity of the Dominica Citizenship by Investment Program. 
• In 2020, Prime Minister Roosevelt Skerrit told Parliament that the CBI had earned Dominica EC$1.2 billion (One EC dollar=US$0.37 cents) over the last three years, and for the fiscal period 2017-2020, and 5,814 applications had been approved. 
• To qualify for the CBI, the investment made by foreigners is expected to be large enough to positively impact the island’s socio-economic conditions. The approved CBI residents, up to 2020, totalled around eight per cent of the Dominican population.
• Notably, in March last year, Skerrit said his administration had been utilizing the CBI funds to pay off debts, meet the current expenditure of the government, and sustain ongoing projects in the public sector.

 (Caribbean National Weekly)

•  The Dominican Republic Consumer Price Index (CPI) in 2021 reached its highest level since 2008, at 8.50%, and everything seems to indicate that this year it will surpass double digits. 
• Inflation is expected to range between 12% and 13% by the end of 2022 assuming that the conflict between Russia and Ukraine will continue for at least four months, which will undoubtedly alter the macroeconomic framework of the country. 
• Antonio Ciriaco Cruz, an Economist, explained that the government must make a supplementary budget because, in the current one, the oil barrel is contemplated at US$62. 
• In this sense, he explained that if, in the best-case scenario, the average price of oil is at US$90, the oil bill would increase by some US$2.4Bn in addition to the US$4Bn paid last year. The bill could reach US$7 billion he noted. This is a difficult situation for countries like the Dominican Republic, which is a net importer of oil. 
• The current Russia-Ukraine crisis is likely to push oil and natural gas prices higher and drive up import costs for key commodities such as wheat and corn, thereby contributing to higher levels of inflation. The expected rise in inflation for the Dominican Republic will have implications for consumers, businesses and the overall economy.

 (Source: Dominican Today)

• U.S. motorists, already dealing with a steep rise in spending on fuel as the economy rebounded from the coronavirus-induced recession, are now dealing with surging gasoline prices after Russia invaded Ukraine. 
• However, coming into recent months, U.S. consumer spending on energy and gasoline had been near historically low levels - even in the years preceding the coronavirus pandemic. 
• Global energy market prices have skyrocketed since the invasion and subsequent sanctions on Russia from the United States and other countries. U.S. gasoline prices hit an all-time high, while global oil prices surged to a 14-year-high. 
• Americans allocated a record-low share of 1.3% of their total spending on gasoline and energy goods during lockdowns imposed by governments during the coronavirus pandemic in April 2020, according to the Bureau of Economic Analysis. 
• Since then, consumer spending on gasoline and energy has taken up a greater portion of total spending. By December 2021, consumers spent about 2.6% of their total spending on gasoline and energy goods, the most since 2015, according to BEA data. That number dropped to 2.5% in January, the most recent figure available - but is expected to keep rising.

(Source: Reuters)

• Canadian carriers are seeing a bounce in spring travel after a slump due to the spread of the Omicron coronavirus variant, with the country's largest airport bracing for its busiest travel day since the onset of the pandemic this Friday. 
• But just as COVID-19 shows signs of ebbing, surging oil prices due to the Russian-Ukraine crisis and high regulatory costs are casting shadows ahead of the busy summer vacation season. 
• Canadian air traffic is recovering more slowly than in the United States due to tougher virus restrictions. But after rules eased in February, flights to some sun destinations rebounded in March to levels similar to those seen before Omicron hit winter travel, data from airline data company Cirium suggest. 
• Toronto Pearson International Airport on Wednesday said it is expecting March 11 to be the busiest travel day since the start of the pandemic, with about 85,000 passengers set to arrive or depart ahead of spring break next week in the country's most populous province, Ontario.

(Source: Reuters)

• Despite a 20.4% reduction in revenues, Blue Power reported a 146.4% or $121.41Mn increase in earnings for the nine months ended January 31, 2021. The fall in the company’s revenues can be attributed to a reduction in exports as a result of the discontinuation of sales to CARICOM markets arising from a changed trade regime. In 2021, the Jamaican Government discontinued the issuance of Certificates of Origin for soap manufactured locally with imported soap noodles, as a result of a ruling made in 2020 by CARICOM’s Council for Trade and Economic Development (COTED). 
• However, the company’s bottom-line benefited from capital gains from the sale of real estate and investments during this period of $145.64Mn. Consequently, profit before tax totalled $215.12Mn for the nine months relative to $110.6Mn for the previous year, up 94.6%. 
• In the coming months, management has indicated that the company will be taking steps to adjust its prices in response to the rising commodity prices and freight rates. The increases in input cost no longer appear to be temporary, and as such, Blue Power will be adjusting prices to reflect the changes in the economic environment. As such the company may see an increase in its revenue as a result of charging higher prices for its products.
• Blue Power’s stock price has increased by 23.3% since the start of the calendar year. The stock closed Tuesday’s trading session at $3.88 and currently trades at a P/E of 9.7x earnings which is below the Junior Market Manufacturing Sector Average of 19.7x.

(Source: Company Financials)

• Fitch forecasts that the Brazilian economy will grow 0.7% in 2022, down from a 4.6% expansion in 2021, as higher inflation and rising interest rates limit private consumption and investment, and weaker sentiment restrains economic activity. 
• The 2021 outturn of 4.6% was in line with Fitch’s expectations, as robust consumption and private investment led Brazil out of the economic downturn in 2020 that was caused by the COVID-19 pandemic. However, higher inflation will cause private consumption to slow to 1.9% in 2022, from 3.6% in 2021 and will continue to undermine consumer confidence. 
• Inflation is expected to average 8.2% in 2022, compared to 8.3% in 2021 driven by higher food and fuel costs that will limit how much consumers can spend on other goods. Nevertheless, while inflation is expected to slow in H2 2022, it will likely happen gradually. 
• Fitch is slightly more constructive in the medium-to-long term as inflation and interest rates begin to moderate and policy uncertainty will partially abate following the October 2022 general election. As such, growth is forecasted to average 2.1% from 2023 to 2026.

 (Source: Fitch Solutions)

• Fitch anticipates that Prime Minister Philip Davis will prioritise short-term spending measures to bolster the Bahamian national vaccination campaign, which has lagged behind other Caribbean markets. As of February 23, 38.8% of the Bahamian population had been fully vaccinated, and an additional 3.3% had been partially vaccinated. This is well below vaccination rates in the Dominican Republic and many other major tourist destinations in the Caribbean.  
• Additionally, Davis and the Progressive Liberal Party (PLP) will likely advance expansionary fiscal measures in the near term to support the economic recovery from the COVID-19 pandemic. However, In the longer term, the PLP government will likely shift fiscal policy towards consolidation due to wider deficits caused by the pandemic and a rising debt load.  
• Bahamas’ real GDP contracted 14.5% in 2020; however, Fitch forecasts that growth will accelerate to 10.9% in 2022, from an estimated 1.5% in 2021. These forecasts suggest that the Bahamian economy will not fully regain its 2019 level of output until 2024. Notably, Davis said his government will take measures to contain rising prices caused by global inflationary pressures, such as supporting domestic agricultural production. 
• The country’s fiscal deficit widened to 11.4% of GDP in 2020, then modestly narrowed to 10.3% in 2021. Consequently, Fitch expects that the PLP government will likely pursue debt renegotiations with the IMF and other international creditors, though the fiscal adjustment would not likely begin until the Bahamas is nearing its pre-pandemic level of output. 

 (Source: Fitch Solutions)