• China on Tuesday banned exports to the United States of the critical minerals gallium, germanium and antimony that have widespread military applications, escalating trade tensions the day after Washington's latest crackdown on China's chip sector.
• The curbs strengthen enforcement of existing limits on critical minerals exports that Beijing began rolling out last year, but apply only to the U.S. market, in the latest escalation of trade tensions between the world's two largest economies ahead of President-elect Donald Trump taking office next month.
• A Chinese Commerce Ministry directive on dual-use items with both military and civilian applications cited national security concerns. The order, which takes immediate effect, also requires a stricter review of end-usage for graphite items shipped to the U.S.
• The move has sparked fresh concern that Beijing could next target other critical minerals, including those with even broader usage such as nickel or cobalt.
• The United States was assessing the new restrictions, but will take "necessary steps" in response, a White House spokesperson said, without giving details.
• China's announcement comes after Washington launched its third crackdown in three years on China's semiconductor industry on Monday, curbing exports to 140 companies, including chip equipment maker Naura Technology Group.
• Trump, whose first four-year White House term was marked by a bitter trade war with China, has said he will implement 10% tariffs on Chinese goods and threatened 60% tariffs on Chinese imports during his presidential campaign.

(Source: Reuters)

• The world economy is set for steady growth in the next two years if resurgent protectionism does not derail a recovery in global trade, the Organisation for Economic Cooperation and Development said on Wednesday.
• The world economy is poised to grow 3.2% this year and 3.3% in 2025 and 2026 as lower inflation, job growth and interest rate cuts help offset fiscal tightening in some countries, the OECD said in its latest Economic Outlook.
• After global trade sputtered last year, it is rebounding and growth in volumes is set to reach 3.6% next year despite a growing number of measures to restrict the flow of imports, the OECD said.
• "Rising trade tensions and further moves towards protectionism might disrupt supply chains, raise consumer prices, and negatively impact growth," the OECD said. The outlook for global trade has become clouded since U.S. President-elect Donald Trump has stepped up calls for tariff hikes on various major trade partners.
• As a cooling job market causes consumer spending to moderate, the OECD forecast that U.S. growth would ease from 2.8% this year to 2.4% in 2025 and 2.1% in 2026.
• In China, the world's second-biggest economy, growth was seen easing from 4.9% in 2024 to 4.7% in 2025 and 4.4% in 2026 despite monetary and fiscal easing as consumer spending remains sluggish due to high rainy-day savings.
• Meanwhile, in the eurozone, investment would benefit from central bank easing and tight labour markets would support consumer spending, pushing growth up from 0.8% this year to 1.3% in 2025 and 1.5% in 2026.
• UK growth was seen picking up from 0.9% this year to 1.7% in 2025 as real income gains and a hike in public spending helped offset the effect of higher taxes before growth eases back to 1.3% in 2026.
• As inflation eases, most major central banks should keep carefully loosening monetary policy with the exception of Japan, the OECD said. With most governments' public finances under strain, the OECD said they needed to take decisive action to stabilise their debt burdens.

(Source: Reuters)

• For the period January to July 2024, Jamaica’s spending on imports totalled US$4.35Bn, while the country earned approximately US$1.09Bn from exports, according to new data from the Statistical Institute of Jamaica (STATIN).
• This marks a 2% reduction in import spending compared to the same period in 2023 when Jamaica spent US$4.44Bn. The drop in the value of imports was mainly due to lower imports of Fuels and Lubricants and Raw Materials/Intermediate Goods, which fell by 4.2%, and 12.1%, respectively.
• On the export side, Jamaica's earnings fell by 9.8% from last year, moving from US$1.21Bn to US$1.09Bn, due to a sharp drop in re-exports¹ of Mineral Fuels, which fell by 67.4%. Notwithstanding, domestic exports (goods made in Jamaica) increased by 5.8%, totalling US$961.9Bn while earnings from re-exports declined to US$128.7Mn.
• Jamaica’s top five import markets during the period were the United States, China, Brazil, Japan, and Trinidad and Tobago. However, import spending from these countries fell by about 3.3% to $2.64Bn, primarily due to a 7.3% decrease in fuel (mineral) imports.
• On the other hand, Jamaica's biggest export markets included the United States, Iceland, Russia, the Netherlands, and Canada. Export revenue from these markets rose by 17.8% to US$765.1Mn, largely because of a significant increase in the value of crude materials being sold abroad, which went up by 67.2%.
• The net effect of a larger export side decline over the period translated to a deficit of roughly US$3.26Bn in the Merchandise Trade Balance segment of Jamaica’s current account (CA).
• That said, according to the Bank of Jamaica (BOJ), the CA of the balance of payments amounted to a surplus of 1.0% and 0.6% of GDP, for both the March and June 2024 quarters respectively, before recording a deficit of 0.8% of GDP for the September 2024 quarter. Still, the BOJ expects that notwithstanding the deterioration in the merchandise trade balance amid higher consumer and capital goods imports, there will be a CA surplus in FY25 and FY26. However, these surpluses of 0.5% and 1.5% respectively are expected to be lower than the 3.1% surplus for FY24.

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¹The export of imported goods, typically after they have undergone further processing or manufacture.

(Sources: STATIN & BOJ)

• Fontana Limited’s (Fontana’s) profits are down 1.5% to $60.50Mn for its first quarter ended September 30, 2024 (Q1 2025) when compared to Q1 2024. The decline occurred as the company’s revenue and operating profit growth were negated by higher finance costs and taxes.
• Revenues rose by 16.2% to J$2.01Bn, aided by month-on-month growth in transaction counts, average spending per customer, and prescription counts. All locations saw higher revenues, including its newest store in Portmore, which has largely maintained its break-even monthly sales. Other income also grew by 7.7% to $35.7Mn, reflecting the company’s efforts to tap into new revenue streams in the Portmore store.
• Amid double-digit revenue growth, cost of goods sold (COGS) grew by 9.9%  to $1.29Bn, supporting a 28.4% growth in gross profits to $774.54Mn. As such, gross profit margins improved from 33.9% to 37.5% over the period.
• Furthermore, operating expenses increased by 28.6%, ending the quarter at J$671.9Mn.This reflects the additional operating costs associated with the Portmore store, which opened in November 2023 and increased staff costs across the network spawning from initiatives to increase staff retention, engagement and benefits. Notwithstanding the surge in operating expenses, operating income grew by 26.9% to $102.61Mn.
• However, higher finance costs and tax charges tempered its overall performance. Finance costs are 25.3% more than they were in Q1 2024, owing to foreign exchange losses on lease liability and the new Portmore store. Meanwhile, taxation charges totalled J$11.9Mn compared to nil in the corresponding quarter. Fontana’s 5-year tax-free benefit for listing on the Junior Market ended in January 2024. However, it will still benefit from paying taxes at half the normal rate for another five years. 
• Amid weaker earnings, Fontana is working on improving its efficiency, which could help stimulate profit growth. The company is far advanced in its PIMS integrated point of sale system for the pharmacy department and its new integrated HR software. Management expects these new tools to improve operating efficiency for central ordering and inventory management, create faster processing times and support better data analytics.
• While it focuses on improving efficiency, management remains cognizant of risks that could threaten profitability. Of note, there are early signs of softening demand for non-essential home items, toys and home décor following Hurricane Beryl’s negative impact on the economy. The company noted that it would continue to monitor these developments and implement the required strategies to manage the potential impact.
• Fontana’s stock price has declined by 19.3% since the start of the year. The stock closed Tuesday’s trading session at $8.08, with a P/E ratio of 17.2x, below the Junior Market Distribution Sector average of 20.5x.

(Sources: JIS & NCBCM Research)

• Having successfully secured a $600Mn loan from a consortium of local commercial banks, the Barbados government is seeking to tap into the increasing confidence in its debt instruments since the 2018-2019 debt restructuring exercise. Over the weekend, the Central Bank of Barbados announced it was offering a $250Mn Government of Barbados 20-year Debenture issue.
• The issuance has a grace period of 10 years, followed by 10 years of equal quarterly payments to be made in February, May, August and November.  A total of 40 payments will be made until 2044. The interest rate on this long-term debt instrument is 7.75% and the government is offering it to the public for minimum purchases of $1000.  According to the Central Bank of Barbados, the issue will remain open until the bank advises that it has been fully subscribed.
• The Debenture¹ represents a shifting focus by the Barbados government back to raising capital on the local market. In his mid-year report to the country, Minister of State in the Ministry of Finance Ryan Straughn reported that as of September 30, 2024, Barbados’ total public debt stood at $14.87Mn, or 104.8 per cent of GDP. However, he affirmed the government’s commitment to responsible debt management, including timely debt service payments, which totalled $717.8Mn during the first half of the financial year.
• “Our focus on public sector reform, debt management, and prudent fiscal policies will ensure that Barbados remains on a sustainable fiscal path, whilst continuing to invest in the future of our people and our country,” Straughn said. He highlighted restrained government expenditure, which stood at $1.70Bn, falling short of the forecasted $1.763Bn.
• According to Straughn, the restrained expenditure was mainly due to delays in capital project execution for road repairs and housing developments. Parliament recently approved a $600Mn loan from three local commercial banks as it pursues a debt swap, where it repays higher interest loans with a new loan at a lower interest rate. The loan is being financed by CIBC, Royal Bank and ScotiaBank. CIBC is structuring the 20-year loan.  

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¹Debentures are a type of loan that is not backed by collateral, but instead by the reputation and creditworthiness of the issuer.

(Source: Barbados Today)

• Delta Air Lines’ expanded service during the Summer 2025 season is expected to improve Barbados’ connectivity with the U.S. This action follows the airline’s planned service initiation to Barbados on November 23, 2024. Effective December 21 of 2024, Delta will inaugurate a weekly service from New York on Saturdays exclusively and a seven-day-a-week service from Atlanta, Georgia.
• Delta will provide daily non-stop flights from Hartsfield-Jackson Atlanta International Airport (ATL) to Grantley Adams International Airport starting May 7, 2025, and concluding September 7, 2025. Minister of Tourism and International Transport Ian Gooding-Edghill expressed enthusiasm for the Delta Summer 2025 expanded service.
• At a time when Network Planning for 2025 is advanced, this represents yet another vote of confidence in Barbados as a destination. The additional capacity further bolsters Barbados’ allure as a travel destination, especially amid continued demand from the U.S. market.
• Barbados has been emphasising the development of a comprehensive airlift strategy in recent years, which is essential for the island to maintain its competitiveness in the global tourism market and increase visitor arrivals. Delta’s dedication to expanding its capacity resulted from these strategic discussions, underscoring the significance of government and private sector collaboration in improving Barbados’ tourism offerings.

(Source: Caribbean News Now)

• U.S. manufacturing contracted at a moderate pace in November, with orders growing for the first time in eight months and factories facing significantly lower prices for inputs.
• The improvement reported by the Institute for Supply Management (ISM) on Monday tracked similar increases in other sentiment surveys, which have risen on hopes of more business-friendly policies from the incoming Trump administration.
• Still, manufacturing is not out of the woods yet. ISM Manufacturing Business Survey Committee Chair Timothy Fiore noted that "production execution eased in November, consistent with demand sluggishness and weak backlogs," and that "suppliers continue to have capacity, with lead times improving but some product shortages reappearing." Economists agreed.
• The ISM said its manufacturing PMI rose to a five-month high of 48.4 from 46.5 in October, which was the lowest level since July 2023. A PMI reading below 50 indicates a contraction in the manufacturing sector, which accounts for 10.3% of the economy.
• Only three industries, including computer and electronic as well as electrical equipment, appliances and components reported growth. Among the 11 industries reporting contraction were transportation equipment, machinery, miscellaneous manufacturing, chemical products and primary metals.
• Some machinery manufacturers said a slowdown in construction "has created a surplus of finished goods, creating the need for an extra two weeks of shutdown over the Christmas holiday period." Fabricated metal products makers said customers were destocking, adding "the preliminary forecast for 2025 is down significantly."

(Source: Reuters)

• According to industry data released on Tuesday, British retailers reported lacklustre sales in November, affected by the timing of the Black Friday sales, although it still pointed to weakening consumer confidence.
• Sales volumes dropped by 3.3% in the 12 months to November, the weakest reading since April when they fell 4.0%, and below an increase of 0.6% in the year to October, the British Retail Consortium said.
• Last month's decline reflected the fact that this year's data did not include Black Friday sales in late November, which will be reflected in the December numbers, though they were included in last year's comparison.
• Nonetheless, other factors also weighed on consumer spending in November.  Rising energy bills have also weakened consumer confidence and dented non-food spending, which fell 2.1% year-on-year in the three months to November, reflecting a decline in spending on winter clothing.
• Additionally, easing consumer confidence post-summer, and expectations that post-budget inflation and interest rates will stay higher in the coming months also contributed In line with expectations for higher-for-longer interest rates, the Bank of England (BoE) is expected to keep rates on hold at 4.75% later this month after cutting Bank Rates in August and November.

(Source: Reuters)

• Data from the Statistical Institute of Jamaica (STATIN) Labour Force Survey (LFS) revealed the unemployment rate stood at 3.6% in July 2024, down from 4.2% in April 2024.
• The total number of unemployed individuals amounted to 52,600, down from 62,800 in April, with females making up 52.5% of unemployed individuals. 19,500 of the unemployed persons were youth (aged 15 to 24 years), with females accounting for 10,100 or 51.8%.
• Overall, female and youth unemployment were higher. Female unemployment stood at 4.0% compared to males who had a 3.2% rate of unemployment. However, Youth unemployment was higher at 10.4%, with young adult females having a higher unemployment rate of 11.8% compared to 9.1% for young adult males.
• Of note, the labour force¹ shrank to 1,461,600 persons, from 1,483,100 in April 2024. 775,300 (53.0%) were males, while 686,300 (47.0%) were female. The decline in the labour force reflects a lower participation rate of 67.8%, down slightly from 68.8% in April.
• Regarding employee distribution across occupation groups, the ‘Services and Sales Workers’ segment employed the highest number of individuals at 338,200 or 24.0% of the labour force. The second largest was ‘Skilled Agricultural, Forestry and Fishery Workers’ with 190,500 workers, followed by ‘Elementary Occupations’, with 185,900 workers.
• The ‘Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles’ remains the largest employer, engaging 265,200 or 18.8% of the individuals. The second largest industry group was ‘Agriculture, Forestry, and Fishing’, with 201,000 or 13.8% of persons employed.
• The latest unemployment figure beats expectations for unemployment levels to inch up in 2024, given Jamaica’s economic slowdown to a 0.2% YoY growth in Q2 2024 and a subsequent contraction of 2.8% for Q3 2024.
• The unemployment data for April and July, reflects the new labour force series, introduced in January 2024 when unemployment amounted to 5.4%. It represents a break in the series and as such is not comparable with previous survey data. The new series incorporates the latest guidelines from the International Labour Organization (ILO), which resulted in, inter alia, a significant change in the definition of employment and unemployment.

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¹The labour force refers to the sum of those either working (i.e., the employed) or looking for work (i.e., the unemployed)

(Source: STATIN & NCBCM Research)

• The Government of Jamaica has launched a project aimed at addressing climate change by creating sustainable jobs, safeguarding workers’ rights, and fostering fair and inclusive growth. The ‘Jamaica Just Transition: Embedding Climate Justice in Regional Policy Framework’ project is considered an important step towards climate justice and sustainable development.
• The two-year initiative, which was unveiled during the Ministry of Labour and Social Security’s Regional Labour Talk Roadshow in St. Ann on Wednesday (November 27), brings together the International Labour Organization (ILO) and local stakeholders to foster collaboration and implement policies to infuse climate action with decent work principles in Jamaica, advancing social justice and sustainable economic development goals.
• At its core, the Just Transition concept aims to address the societal and economic challenges that arise from shifting towards a greener, more sustainable economy.
• The initiative focuses on ensuring that workers, communities and industries most affected by the transition to low-carbon practices are not left behind. This includes providing social protection, improving workers’ rights, creating policies that meet global standards, developing a roadmap for integrating climate action, and more.
• The government envisages that by 2026, Just Transition measures will be integrated into Jamaica’s national climate change policy frameworks, including its Nationally Determined Contributions (NDCs).

(Source: JIS)