Bolstered by strong remittance inflows, private consumption and export demand will support El Salvador’s steady economic expansion over the coming quarters.
Fitch has revised up its 2020 real GDP forecast from 2.2% y-o-y to 2.4% and its 2021 forecast from 2.2% to 2.3% as a strong labour market in the US is driving larger than expected remittance inflows.
A potential escalation in violence as the result of President Nayib Bukele’s anti-crime initiatives poses downside risk to business confidence and investment.
Asset, loan and deposit growth will rise in Mexico in the coming months, as economic growth picks up, interest rates continue to fall and US trade tensions fade.
Fitch maintains its constructive long-term outlook on the sector, given Mexico’s economic upside and relatively low levels of banking sector penetration.
The forecast is for loan growth to accelerate to 5.5% y-o-y in 2020, from an estimated 4.5% in 2019. This is down from our previous forecast of 9.8%, as there is now less optimism about the Mexican economy in 2020.
U.S stocks rose to records and Treasuries fell after President Donald Trump toned down rhetoric against Iran. Equities closed well off highs as reports of fresh rocket attacks in Baghdad heightened investor jitters.
The S&P 500 jumped to an intraday record after the U.S. president suggested further military action against Iranian targets is not necessary. The rally faded into the close after reports that rockets hit the Green Zone in Iraq’s capital where the U.S. embassy is located.
Equities had swooned overnight around the world after Iran launched missiles at U.S. bases in Iraq, escalating tensions that flared last week.
The World Bank said that the global expansion will accelerate slightly to 2.5% in 2020, down from a previous 2.7% projection.
In its latest Global Economic Prospects report released on Wednesday, the lender warned that conditions remain fragile as it cut estimates for growth in 2020 and 2021 and lowered the euro area and China estimates for this year.
The outlook for a shaky recovery follows a year in which faltering trade and investment dealt the world its weakest growth since the global financial crisis. The bank warned that the scenario depends on much going right, an outcome that may be less likely should tension between the U.S. and Iran continue to flare.
World shares steadied and oil pulled back from multi-month highs on Tuesday after dramatic post-new year moves, as investors judged that prospects of an all-out conflict between the United States and Iran had eased.
On Monday the mood began to calm, helping U.S. shares recover ground. The Dow ended 0.24% higher, the S&P 500 0.35% and the Nasdaq 0.56%.
After a strong rally, oil gave back some of its gains amid signs that Iran would be unlikely to strike against the United States in a way that would disrupt supplies.
Brent crude futures fell 44 cents to $68.48 a barrel, having been as high as $70.74 on Monday, while U.S. crude dropped 34 cents to $62.93.
Fitch is neutral on the Mexican peso (MXN) over the short term, but expects the unit will depreciate over the long term.
The forecast for the unit was revised for 2020 to an average of MXN19.16/USD, from MXN20.05/USD previously, amid a relaxation of global trade tensions.
Risks to the view are weighted to the downside, given the potential for deterioration in relations with the US or a downturn in the global economy.
The Dominican Republic will maintain one of the highest real GDP growth rates in the Caribbean over the coming quarters even as economic activity slows from its 2018 high.
An accommodative monetary policy stance will support foreign investment and business expansion, while exports will rebound as global headwinds level off.
Fitch Solutions maintain its real GDP growth forecasts for the Dominican Republic of 4.7% y-o-y in 2020 and 4.5% in 2021, from an estimated 4.9% in 2019, though a US recession or domestic political unrest may weigh on economic activity in the short to medium term.
Mexican company, Grupo Aeroportuario del Pacifico (GAP), says the level of investments made in Jamaica is indicative of its belief in Jamaica and the country’s prospects for growth.
The firm officially took over management of the Norman Manley International Airport (NMIA) last October, through its local subsidiary, PAC Kingston Airport Limited (PACKAL), under a 25-year concession agreement.
Chief Executive Officer (CEO) of GAP, Raul Revuelta, said the investment decision rested heavily on the strides that Jamaica has been making.
“It is completely related to what we believe about the future of Jamaica. We really believe in what is coming. We know that Jamaica has the lowest inflation rate, the lowest interest rate, and the lowest unemployment rate in its history,” he said. “That is something really great to celebrate.
GAP has committed to invest US$60Mn in the development of the airport during the first three years of operation, under a modernisation plan that is expected to cost more than US$100Mn.
The Bank of Jamaica (BOJ) says net currency issued during the last five working days of 2019, between December 23 and 31, totalled some $2.9Bn.
In a statement on Thursday (January 2), the BOJ said this out-turn for the week contributed to the overall $18.9Bn or 14.5% growth in the currency stock for the month, consistent with expenditure associated with the festive Christmas season.
The Central Bank indicated that the overall stock of currency issued for the year totalled $148.9Bn as at December 31. This, the BOJ said, represented an annual increase of 11.5%, as against 20.4% recorded for the corresponding period in 2018.
The BOJ said it anticipates that the majority of the currency in circulation during December will be redeemed during January. It further noted that over the last five years, net currency redemption in January averaged 73.2% of the sum issued in the preceding month.
With several major markets shuttered and trading volumes thin before the New Year’s holiday, the dominant moves on Tuesday reflected some common investor expectations for 2020: dollar weakness and caution in stocks.
Contracts on the S&P 500 Index fluctuated in a small range a day after the underlying gauge fell the most in more than three weeks. Shares struggled for traction in Europe and slipped in Asia as the blockbuster year headed for a lackluster finish.
Utility and food shares led Tuesday’s decliners on the Stoxx Europe 600 Index, though the benchmark was still on track for its best annual performance in a decade with a 23% gain.
