• Jamaica’s capacity to combat the coronavirus pandemic has been further boosted through a US$75Mn loan commitment from the Inter-American Development Bank (IDB).
• According to the IDB communiqué, the provision is earmarked to strengthen the efficiency and effectiveness of public policy and fiscal management, in response to the health and economic crises resulting from COVID-19.
• The allocation is intended to promote the availability and timely execution of public resources to respond to the pandemic. It will strengthen the countercyclical effect of fiscal policy through the introduction of temporary measures to protect the income of vulnerable households and increase liquidity for businesses during the crisis.
• The loan is also intended to promote post-COVID-19 economic and fiscal recovery. It will help finance cash transfers to employees, grants to low-income informal workers, vulnerable groups, and the unemployed, and provide student loan relief. Additionally, it is aimed at supporting small-business grant programs, especially in the tourism sector, and measures to strengthen fiscal institutions to improve efficiency and transparency of public investment.

(Source: JIS)

• The All-Jamaica Consumer Price Index (CPI) declined by 0.1% for February 2021 contributing to the lowest point-to-point inflation rate (3.8%) since October 2019.
• A 1.3% fall in the index for the heaviest weighted division, ‘Food and Non-Alcoholic Beverages’ was the main driver of the decline in consumer prices. However, increases of 1.4% in the index for the ‘Housing Water, Electricity, Gas and Other Fuels’ division and 0.5% in the index for the ‘Transport’ division tempered the decline in the CPI.
• Electricity rates rose in February due to new tariff rate changes for JPS approved by the Office of Utilities Regulation (OUR). Further, the index for the ‘Transport’ division advanced by 0.5% due to higher petrol prices supported by the vaccine-led recovery in global oil prices
• Consumer prices actually fell for the calendar year-to-February ( -0.1%), while the point-to-point (February 2020 – February 2021) rate was 3.8%, falling just below the lower bounds of the Bank of Jamaica’s (BOJ) inflation rate target of 4%-6%.
• Despite the current low inflation rate and expectations for continued weakness in domestic demand, the BOJ forecasts inflation to average 5.4% this year. This is being driven by expectations for a potential increase in agricultural food prices, higher international commodity prices as the global economy recovers and the effects of the increases in regulated utility prices. 

(Source: Statin)

• On March 15, 2021, S&P Global Ratings lowered its long-term foreign and local currency sovereign credit ratings on Aruba to 'BBB' from 'BBB+'. The outlook was revised to stable.
• Aruba has the largest exposure to the tourism of any sovereign rated by the agency. Furthermore, the severe hit to the country's economy by the COVID-19 pandemic and its aftermath is expected to be more prolonged than anticipated. S&P also expects the government will rely more heavily on borrowing to fund its expenditures, pushing debt levels higher.
• The stable outlook considers the economic and fiscal challenges the country faces, alongside the support afforded by the agreement reached between it and the Netherlands in late 2020. 
• The agreement underscores the Netherlands' strong commitment to providing concessionary financial assistance to Aruba while laying the groundwork for reforms and aiming to limit the severity of the effects of the pandemic.
• Aruba is highly vulnerable given its lack of economic diversity and high dependence on the Kingdom of the Netherlands for support. That being said, the continued support from the kingdom bodes well for the country’s credit profile. Notwithstanding, if the effects of the pandemic continue to weigh on the fiscal accounts this could weaken Aruba’s creditworthiness further.

(Source: S&P Global Ratings & NCBCM Research)

• Brazilian economic activity rose sharply in January, a central bank index showed on Monday, indicating that Latin America’s largest economy has not only recovered all its pandemic-related decline but is now back to the size it was over five years ago.
• The IBC-Br economic activity index, a leading indicator of gross domestic product, rose a seasonally adjusted 1.04% in December, more than double the 0.4% increase forecast in a Reuters poll of economists.
• The seasonally adjusted index in January stood at 140.3, higher than the 140.02 from February last year before the COVID-19 pandemic brought the economy to a standstill and triggered the biggest annual decline in activity since 1990. That is also the highest level since May 2015, according to central bank data.
• Despite the strong start, the outlook for this year remains uncertain, as a deadly second wave of the pandemic sweeps the country, unemployment remains high, and emergency government aid to millions of poor people approved by Congress last week will be only a fraction of last year’s payments.

(Source: Reuters)

• Economic activity in China soared during the first two months of 2021, but recovery remains uneven a year after the country imposed draconian lockdowns around this time in 2020. National Bureau of Statistics (NBS) data released earlier in the day said that industrial production grew 35.1% year-on-year in February, above the 30% growth in forecasts prepared by Investing.com and the previously recorded 7.3% growth.
• Retail sales also soared 33.8% year-on-year in February, against the predicted 32% growth and the previously recorded 4.6% growth. The unemployment rate was at 5.5, higher than the previously recorded 5.2%.
• The spectacular growth rates of more than 30% for key indicators in the data are largely attributable to distortions when compared to 2020’s lockdowns. It also indicated a rebound happening at uneven rates, with strong industrial output and export demand against lagging consumer recovery.
• China is the only major economy to have returned to economic growth after imposing 2020’s lockdowns as COVID-19 spread. Soaring global demand for medical goods and work-from-home devices has also given the recovery a boost.
• The economy grew 2.3% in 2020 and is forecast to expand 8.4% in 2021, although the recently-ended National People’s Congress set a more modest growth goal of “above 6%.” There are also signals that the government will gradually scale back COVID-19 stimulus measures.

(Source: Investing.com)

• Eurozone finance ministers promised on Monday to extend public support for the economy through 2021 and 2022 to help the common currency area emerge from the coronavirus crisis, saying they would deal with rising debt only once recovery is on track.
• The ministers, known as the Eurogroup, also said the public support, so far worth 8% of eurozone gross domestic product in national fiscal measures and 19% of GDP in liquidity measures, or more than 3 trillion euros ($3.58 trillion) in total, would be maintained as long as there is an acute health crisis.
• "The Eurogroup is committed to a supportive stance in the euro area in 2021 and in 2022, also taking into account the fiscal stimulus stemming from the RRF (Recovery and Resilience Facility)," the ministers said in a statement, as had been reported by Reuters on Friday.
• The RRF totals 672.5 billion euros in loans and grants, to be borrowed jointly by the EU, on top of the national fiscal and liquidity measures so that EU countries hard hit by the pandemic and with already high debt can finance reforms and investments to make economies greener and more digitalized.

(Source: Reuters)

• The National Housing Trust (NHT) plans to invest $57.7Bn to facilitate the commencement of 8,513 housing solutions and the completion of 7,043 units by March 31, 2022.
• The NHT’s plans include the commencement of construction on units in Albion, St. Thomas and Point, Hanover under the Guaranteed Purchase Programme, as well as solutions at Mount Nelson, Manchester; Fontabelle, Westmoreland; and Rasta City, Kingston.
• The planned level of capital expenditure includes the disbursement of 12,083 mortgage loans under different programs, including build on own land, open market, construction, joint mortgage finance, and house lot loans.
• Meanwhile, the NHT will continue to provide special subsidies and grants amounting to $1.6Bn. This allocation will include provision for community renewal projects and mortgage subsidies aimed at increasing access to benefits by contributors in the lower-income bands.
• This project will help to improve the standard of living for many citizens in the future. In the short-term, it should also support economic recovery in the construction sector which declined by an estimated 0.8% in 2020.

(Source: JIS & NCBCM Research)

• MPC Caribbean Clean Energy Limited (MPCCEL) has advised that on 22nd December 2020, MPC Caribbean Clean Energy Fund LLC, the Investment Company of MPC Caribbean Clean Energy Limited, signed the acquisition of a 6.4 MWp solar park San Isidro, in El Salvador.
• The solar park started its commercial operation on January 29, 2021, and on March 2, 2021, the transaction has been successfully completed.
• MPCCEL further stated that the San Isidro solar park will help to avoid an estimated 36,000 tons of CO2 emissions throughout its lifetime.
• This acquisition should help MPCCEL to increase its energy generation to satisfy greater energy demands and attract more revenues to support future top-and-bottom-line growth.

(Source: JSE & NCBCM Research)

• Prior to the pandemic, Dom Rep’s fiscal deficit stood at 2.3% of GDP before rising to an estimate of 7.3% in 2020. Fitch forecast that with the help of rebounding revenues, the country’s fiscal deficit will narrow to 6.1% of GDP in 2021 and 5.4% in 2022, with public debt climbing to 54.9% of GDP in 2021 and 57.4% 2022, from an estimated 52.7% in 2020. 
• Real GDP is forecasted to grow by 5.0% y-o-y in the Dominican Republic in 2021 and 4.7% in 2022, up from an estimated -6.8% in 2020, as private consumption and tourism recover from the economic shock of the COVID-19 pandemic.
• Additionally, the ongoing government stimulus measures, combined with the planned roll-out of a COVID-19 vaccine in March 2021, will help economic activity return to normal over the coming quarters. This estimated recovery is significant when compared to the forecast 3.4% GDP growth for the Caribbean in 2021, and 3.6% in 2022.
• The prospects for improvement in both fiscal and economic performance along with the push for fiscal consolidation continue to support our current HOLD recommendation on the sovereign.

(Source: Fitch solutions & NCBCM Research)

• According to statistics agency IBGE, Brazil’s economy shrank by 4.1% last year due to the coronavirus pandemic, its worst drop in decades. The country is experiencing a devastating second wave of COVID-19 that threatens to cut short a stronger-than-expected rebound in the economy at the end of 2020.
• Latin America’s largest economy grew by 3.2% in the fourth quarter, more than the 2.8% median estimate in a Reuters poll of economists.
• However, that recovery, based on consumption by households receiving emergency government cash transfers, may be eroded by a resurgent outbreak now killing record numbers of Brazilians and adding to fears of another downturn early this year.
• The full-year 2020 drop was the worst since the current IBGE series began in 1996. The 2020 plunge was also the worst since a 4.35% fall in GDP recorded in 1990, according to central bank data going back to 1962, and the third-steepest in that series.

(Source: Reuters)