Jamaica’s fiscal surplus will decline over the coming quarters as the government’s economic stimulus response (approximately 1.1% of GDP) to the coronavirus pandemic reduces revenue intakes and increases expenditures.
A sharp contraction in real GDP growth in 2020, driven by public health restrictions on economic activity, will further undermine revenues.
In addition, it is expected that the government’s proposed reduction of the general consumption tax (GCT) from 16.5% to 15.0% and a one-time tax credit to small and medium-sized enterprises (SMEs) will provide additional drag on revenue intakes.
Notably, the economic effects of the coronavirus pandemic will slow the pace of Jamaica’s debt drawdown and like force legislators to seek an exemption from Jamaica’s fiscal responsibility law, which mandates that debt as a percent of GDP falls below 60.0% by March 2026.
President of the Jamaica Promotions Corporation (JAMPRO), Diane Edwards, says Jamaica’s agriculture sector will be key to the country’s recovery from the coronavirus (COVID 19) pandemic.
She told JIS News that the large acreages of land currently under production, as well as the linkages with other sectors, present a number of opportunities for Jamaican entrepreneurs to exploit. She noted that increasing production to supply the demand for Jamaican produce would position the country to recover quickly.
“We have supply lines, we have markets that have already been identified and, in fact, in most of the overseas markets we have seen that we are not producing enough to fulfil them,” Ms. Edwards said.
“So I think in the short-term there are some extraordinary measures that we are going to have to take, but if we take them, I think we can see agribusiness return to a pretty robust and even expanded level of production,” she added.
The company is asking holders of the DIFL 8.75% Sr Secured due 2024 to consent to an increase of secured debt at DIFL (the most senior part of the capital structure) by up to US$100Mn and to change the required leverage ratios to accommodate the higher secured debt.
DIFL is required to maintain a secured debt leverage below 3x; it was 2x at the end of 2019 but with the issuance of new secured debt at that entity as proposed by the exchange offer, the leverage would surpass 3x, breaching the covenant.
There seems to be opposition from holders of the '24s to this change as those holders only get less asset coverage as more secured debt is added onto DIFL.
Asset, loan and deposit growth will decelerate rapidly in Mexico in the coming months, as economic growth and financial markets are hit hard by the global Covid-19 pandemic.
While support from the Banco de México will help prevent a major banking crisis, risks to the view are slanted to the downside.
Despite the near-term headwinds, Fitch maintains its constructive long-term outlook on the sector, given Mexico’s economic upside and relatively low levels of banking sector penetration
The number of Americans seeking unemployment benefits in the last three weeks likely totalled a staggering 15 million as tough measures to control the novel coronavirus outbreak abruptly ground the country to halt, which would cement views the economy was in deep recession.
Thursday’s weekly jobless claims report from the Labor Department, the most timely data on the economy’s health, would strengthen economists’ expectations of job losses of up to 20 million in April.
The government reported last Friday that the economy purged 701,000 jobs in March. That was the most job losses since the Great Recession and ended the longest employment boom in U.S. history that started in late 2010.
Oil prices rose on Thursday on expectations the world’s largest oil producers would agree to cut production at a meeting later in the day as the industry grapples with a coronavirus-driven collapse in global oil demand.
Brent crude LCOc1 futures rose 1.2%, or 41 cents, to $33.25 a barrel as of 0529 GMT. The contract rose to an intra-day high of $33.90, climbing for a second day. U.S. West Texas Intermediate (WTI) crude CLc1 futures were up 3.3%, or 82 cents, at $25.91 a barrel, after earlier climbing by as much as 6.1%.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - a group known as OPEC+ - are set to convene a video conference meeting on Thursday.
The meeting is expected to be more successful than their gathering in March, where they failed to agree to extend supply cuts and triggered a price war between Saudi Arabia and Russia.
Jamaica’s imports for January to December 2019 were valued at US$6,339.2 million, an increase of 2.7 per cent when compared to US$6,170.5 million which was spent for the similar period in 2018 according to the International Merchandise Trade (IMT) Bulletin released on March 31, 2020 by the Statistical Institute of Jamaica (STATIN).
The December 2019 IMT Bulletin further outlined that revenue from exports amounted to US$1,586.4 million for the current review period, 19.1 per cent lower than the US$1,960.7 million earned in the similar period in 2018.
Expenditure on imports from the United States of America (USA) – Jamaica’s main trading partner – were valued at US$2,848.8 million. This is 3.9 per cent above the US$2,740.7 million recorded in the period January to December 2018.
Earnings from total exports to the USA amounted to US$614.4 million, an increase of 4.4 per cent when compared to the US$588.5 million earned for January to December 2018.
The Government is spending $240 million to purchase excess produce from farmers impacted by coronavirus (COVID-19).
Hutchinson noted that the objective is to bring fresh produce to market and minimise the threat of waste, resulting from the fall-off in demand from the tourism sector, due to COVID-19.
He said the Ministry is aware that some farmers, who would normally supply the hotel and hospitality sectors, have had excess supplies of fruits and vegetables available for redistribution to local consumers.
Panama’s fiscal deficit will widen in the coming quarters as stimulus measures designed to mitigate the economic impact of the Covid-19 (coronavirus) pandemic and subdued revenues weigh on the fiscal balance.
That said, sustained interest in Panamanian debt and a long-term commitment to fiscal consolidation will help keep borrowing costs modest in the coming years.
Fitch has revised its 2020 and 2021 fiscal deficit forecasts to 4.8% and 4.6% of GDP, from 2.9% and 2.6% previously, significantly wider than Panama's estimated 3.1% shortfall in 2019.
Mexico’s deputy health minister said on Thursday there are no plans for border closures even as the country’s death toll from the coronavirus jumped to 50 from 37 in a day.
The deputy minister, Hugo Lopez-Gatell, said “there’s no plan, because there’s no intention to use the border closure mechanism as if it were a useful mechanism for controlling the epidemic,” during his regular evening news conference.
However, Lopez-Gatell reiterated earlier calls on Mexicans resident in the United States to not make non-essential visits to Mexico to help avoid spread of the coronavirus. So far, the Health Ministry has reported 1,510 cases.
