• The U.S. goods trade deficit widened in March as declining exports offset a shrinking import bill, suggesting the novel coronavirus outbreak was upending the global flow of goods and services.
• The Commerce Department said on Tuesday the trade deficit increased to $44.4 billion from a revised $39.8 billion in February. Economists polled by Reuters had forecast the trade gap increasing to $44.0 billion in March from the previously reported $39.9 billion in February.

 (Source: Reuters)

• The economic shock of the coronavirus pandemic will increase political risks in Jamaica as rising unemployment and limited government spending could spark unrest among an austerity-weary population.
• Fitch, expects the domestic outbreak of Covid-19 to delay parliamentary elections, which had been expected to take place in H120, for several months.
• The research firm has revised down Jamaica’s score in its Short-Term Political Risk Index (STPRI) to 68.8 out of 100, from 70.0 previously, reflecting higher social stability risks.

 (Source; Fitch)

• For the year ended December 31, 2019, Productive Business Solutions (PBS) Limited reported audited net profit of US$2.09Mn (EPS: US$1.46), which represents a 1456.0% (or US$1.95Mn) increase in net profit relative to the previous year.
• This performance was driven by a 6.2% (or US$4.02Mn) decline in selling, general and administrative expenses as well as a 17.9% (or US$1.64Mn) decline in finance costs year-over-year.
• Since the start of the year, PBS stock price has risen 18.5%, closing Monday’s trading session at US$0.77. At this price, the company trades at a P/E of 52.7x earnings, which is above the $USD Stock Market Average of 24.6x.

 (Source: PBS’s Financials)

• A number of measures announced by the Venezuelan government, including new price controls, suggest that the partial economic liberalisation seen in the country in recent months has come to an end.
• The new measures, intended to address shortages amid the Covid-19 outbreak, are unlikely to be effective, and reinforce our view that Venezuela will not return to strong long term growth while the current government remains in power.
• Risks to social stability will likely continue to rise in the weeks ahead, as shortages and a rising Covid-19 case total are likely to weigh heavily on living conditions in the country.

 (Source: Fitch)

• Barbados will experience a fiscal deficit in FY2020/21 as the economic impacts of Covid-19 hinder revenue growth and elevate spending.
• Travel restrictions will reduce revenues, while the government response to the coronavirus pandemic will push expenditures higher.
• Fitch has revised down its fiscal forecast to a deficit of 1.3% of GDP from a surplus of 2.5% of GDP, with risks weighted to the downside.

 (Source: Fitch)

• The U.S. Treasury Department on Monday said it plans to borrow nearly $3 trillion in the second quarter of 2020 - more than five times larger than the previous record - as the federal government spends at a frantic pace to mitigate the impact of the coronavirus on the U.S. economy.
• Monday’s estimate is $3.055 trillion more than the original target for the quarter issued in early February, when it was still unclear whether the coronavirus would spread widely in the United States.
• At that time, it appeared as though the federal government would pay down $56 billion of debt in the current quarter, leading Treasury to forecast a negative estimate for new net marketable debt in the period.

 (Source: Reuters)

• U.S manufacturing activity plunged to an 11-year low in April as the novel coronavirus wreaked havoc on supply chains, suggesting the economy was sinking deeper into recession.
• The survey from the Institute for Supply Management (ISM) on Friday added to a raft of grim data this week, including a collapse in consumer spending in March and a surge to 30.3 million in the number of Americans who have filed claims for unemployment benefits in the last six weeks.
• The ISM said its index of national factory activity dropped to a reading of 41.5 last month, the lowest level since April 2009, from 49.1 in March. The monthly decline in the ISM index was the biggest since October 2008. A reading below 50 indicates contraction in the manufacturing sector, which accounts for 11% of the U.S. economy.

 (Source: Reuters)

• Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, says the newly established COVID-19 Economic Recovery Task Force will be working assiduously to ensure the restoration of jobs lost as a result of the coronavirus (COVID-19) pandemic.
• The Minister said layoffs and job losses have occurred in a number of sectors and subsectors. These include tourism and attractions, the airline industry, entertainment, manufacturing, retail, security, entertainment, early childhood, and private education services.
• Of note, Dr. Clarke said data from the SET Cash applications suggest that more than 75 per cent of the applicants are under age 40, pointing out that these are “persons who are starting out in life [and] have obligations”.
• The Minister described this scenario as “very painful”, particularly in light of the significant level of job creation and reduction in unemployment occurring in recent years.

 (Source: JIS)

• Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, says the first Supplementary Estimates for 2020/21 should be tabled in the House of Representatives within two weeks.
• “That supplementary budget will recast [projected] revenues in light of the [coronavirus] COVID-19 pandemic… it will involve a reallocation of expenditure to be consistent with the realities that we face at this time… and will ensure that the expenditure we intend to enact for the COVID Allocation of Resources for Employees (CARE) Programme, goes to the Houses of Parliament,” Dr. Clarke said.
• The Government’s initial Budget of $852.7 billion was adjusted to $853.5 billion to reflect an additional $792 million to fund the operations of the Petroleum Corporation of Jamaica (PCJ), which is being integrated into the Ministry of Science, Energy and Technology.

(Source: JIS)

• Fitch Ratings has affirmed El Salvador's Long-Term Foreign- Currency Issuer Default Rating (IDR) at 'B-' and revises the Outlook to Negative from Stable.
• The Negative Rating Outlook reflects deterioration in debt sustainability metrics as a result of the widening of the fiscal deficit and economic contraction as well as financing constraints stemming from increased reliance on short-term debt, limited scope for additional local market financing and uncertain access to external market financing given high borrowing costs. However, multilateral funding can help ease borrowing constraints this year.
• The rating agency projects a deep economic contraction of 4.8% in 2020 due to the extended national quarantine to combat the coronavirus pandemic as well as 20% fall expected in remittances, representing nearly 20% of GDP,that will hit domestic demand sharply. However, its expects a strong rebound of 5% in 2021 but risks are to the downside in both 2020-2021.

(Source: Fitch)