• Fitch Solutions expects Trinidad & Tobago’s (T&T) economy will grow 4.8% y-o-y in 2021 after declining 6.9% in 2020, driven by private consumption and rebounding energy sector exports.
• The agency has revised its 2021 real GDP forecast up from 4.4% y-o-y previously, to reflect a stronger outlook for global energy demand as COVID-19 vaccine distributions support a global economic recovery.
• However, fiscal consolidation and weak investment prospects will slow the pace of recovery, and the economy will reach pre-pandemic levels only in 2023.

(Source: Fitch Solutions)

• Fitch Solutions forecasts Brazil's overall government fiscal deficit will narrow to 9.7% of GDP in 2021, from a historic 18.8% in 2020.
• While revenues will rebound and expenditures will most likely fall as stimulus measures are reduced, the lack of a budget for 2021 leaves significant uncertainty over government spending.
• Together with waning momentum towards enacting structural fiscal reforms, investors will likely remain cautious towards Brazil, limiting the benefits it sees from improving global risk sentiment.

(Source: Fitch Solutions)

• Britain and the European Union remained divided over competition and fishing on Wednesday as they tried to clinch a Brexit trade deal in time to avoid a turbulent split at the end of the year.
• Ireland said a deal was still possible before Britain leaves the EU's orbit on Dec. 31, 11 months after it formally quit the bloc and entered a transition period keeping it in the bloc's customs union and single market until the year ends.
• But with a dizzying array of conflicting signals coming from the two sides, Britain has not yet managed to agree on a deal that would ease the pain of its departure by keeping in place zero-tariff and zero-quota access to the single market.
• Irish Prime Minister Micheál Martin said the gap on how much fish EU boats could catch in British waters was still wide, but that he believed there should be a deal given the economic shock that failure would trigger.

(Source: Reuters)

• U.S policymakers need to consider major changes to make money market funds less vulnerable to investor runs, a working group led by the Treasury Department said on Tuesday, stopping short of making specific recommendations.
• The group laid out several potential changes to those markets, in which the U.S. government intervened to stabilize after big outflows prompted by the coronavirus outbreak in March.
• Ideas included setting stricter rules around fund redemptions, or higher capital buffers for such funds, but the group said it was not favoring any specific approach.
• The report could kick off a broader effort to overhaul money market funds. Former Federal Reserve Chair and incoming Treasury Secretary Janet Yellen are expected to review so-called "shadow banking," which includes such funds.

(Source: Reuters)

• The Economic Programme Oversight Committee met on December 4, 2020, to review the macro-fiscal program of the GOJ for 2020/21FY.
• Based on the reports presented by the Ministry of Finance and the Bank of Jamaica, the GOJ and the BOJ is on track to meet all quantitative targets under the GOJ Economic Reform Programme (ERP) as at the end of September 2020.
• With tax revenues, year to date is 17.6% behind the same period last year and as GDP growth projections are revised downwards, the MOF continues to project that Revenues and Grants for the last quarter of FY2020/21 will be 3.7% higher than the outturn for the corresponding quarter of FY2019/20 and is cautiously optimistic that this target will be achieved.
• The GOJ however remains committed to achieving the downward revised 3.1% primary balance target which could involve a reallocation and reduction of expenditures to achieve the said target

(Source: EPOC)

• An independent evaluation of prospective resources offshore Jamaica prepared by Gaffney Cline & Associates (Gaffney Cline) shows that there is potential for more than 2.4 billion barrels of oil across 11 prospects and leads covering the Walton Morant license. This license is now held 100% by United Oil & Gas, a U.K.-based oil and gas company.
• “United has long held the view that the Walton Morant Basin is a highly prospective and exciting basin, with billion-barrel potential,” said Jonathan Leather, Chief Operating Officer of United Oil and Gas. “This is the second independent report on the license and the first to explore prospects across the full basin.”
• He said results from the report will help the company move towards reaching the goal of being in a position to drill the first exploration well offshore Jamaica for over 40 years.

(Source: Oil Now)

• The Mexican peso (MXN) will appreciate against the US dollar over the near term, driven by optimism around the global economy and its carry trade value.
• Over the longer term, the agency expects the currency will weaken against the US dollar, weighed down by relatively weak economic fundamentals and more dovish monetary policy.
• Fitch Solutions forecasts an average exchange rate of MXN20.70/USD in 2021, down from previous forecast of MXN21.65/USD, with the exchange rate ending the year at MXN21.30/USD.

(Source: Fitch Solutions)

• The Banco Central de Costa Rica (BCCR) will maintain a dovish monetary policy stance in 2021, aided by low domestic inflation and sustained global central bank dovishness.
• In addition, the government’s limited fiscal capacity will leave monetary policy as the primary driver for Costa Rica’s economic recovery in the coming quarters.
• Fitch Solutions forecasts the BCCR will hold its benchmark interest rate at 0.75% through end-2021, and expect inflation will average 1.8% y-o-y in 2021.

(Source: Fitch Solutions)

• Oil hit a nine-month high on Thursday after government data showed a fall in U.S. crude stockpiles last week, while progress towards a U.S. fiscal stimulus deal and strong Asian demand also buoyed prices.
• Brent crude futures rose 45 cents, or 0.9%, to $51.53 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose by 46 cents, or nearly 1%, to $48.28 a barrel. Both benchmarks hit their highest since early March.
• U.S crude inventories fell by 3.1 million barrels in the week to Dec. 11, the Energy Information Administration said, more than analysts' expectations of a 1.9-million-barrel drop.
• Also boosting oil prices, U.S. lawmakers edged closer to an agreement on a $900Bn virus-relief spending package on Wednesday with top Democrats and Republicans sounding more positive than they have in months about getting something done.

(Source: Reuters)

• The United States is hopeful of sealing a mini-trade deal with the United Kingdom to reduce tariffs, President Donald Trump's trade chief, Robert Lighthizer, told the BBC.
• Lighthizer said he was hopeful for a deal that could see punitive tariffs on Scottish whisky lowered.
• He also suggested the UK would need to go further than last week's announcement breaking with the EU's support of European planemaker Airbus.
• Britain will suspend retaliatory tariffs imposed on U.S. goods as part of a dispute over aircraft subsidies from Jan. 1, the first step to diverging from European Union trade policy.

(Source: Reuters)