• In its July Economic Bulletin, the Central Bank of Trinidad and Tobago (CBTT) said: 'The short-term economic outlook for Trinidad and Tobago will be directly impacted by the virus' path and the domestic response’.
• 'If sustained, the gradual relaxation of restrictions on movement and business activity from August could see, by the end of 2021, a meaningful recovery of non-energy output lost during the first 2½ quarters of the year'.
• The price of the two commodities that drive T&T’s energy sector recovered for the first seven months of 2021, bolstered by favourable demand conditions on account of the re-opening of several economies alongside crude oil production cuts. West Texas Intermediate (WTI) crude oil price increased by 69.5%year-on-year over the first seven months of 2021 to an average of US$63.46 per barrel, while natural gas prices rose by 81.5% to an average of US$3.26 per million British Thermal Units (mmbtu).
• 'While some improvement is anticipated in export earnings as the country benefits from the ascent in international energy prices, continued efforts to shore up domestic energy output will be critical'.

(Source: Central Bank of Trinidad & Tobago)

• With the excitement brought on by the string of petroleum discoveries offshore Guyana, the country is already a coveted investment destination. President, Dr. Irfaan Ali plans to make the environment even more attractive to foreign direct investors.
• The government intends to add some 500 megawatts of new power, using the gas-to-energy and Amaila Falls hydropower projects, and several small-scale renewable energy projects, before the end of its term. The projects are intended to cut the cost of power by half and improve the reliability of the electricity supply to businesses and households.
• The government is continuously working to improve the ease of doing business, showing investors that local markets are ready for their entry. This would create thousands of jobs, in line with the government’s manifesto promise of opening avenues for persons to provide for their families.

(Source: The Tribune)

• Fitch Solutions expects the Canadian economy will continue to rebound from the COVID-19 pandemic and grow 5.9% in 2021 and 3.7% in 2022. In Q221, real GDP expanded 12.7% y-o-y on a seasonally adjusted basis but contracted 0.3% q-o-q, due to weak exports and a slowdown in residential investment.
• Additionally, a strengthened labour market and looser public health restrictions will underpin 5.3% private consumption growth in 2021 and 4.4% in 2022. In H121, private consumption increased 6.2% y-o-y, and elevated economic sentiment suggests that household spending will remain strong in the coming months. As businesses rehire more workers to fulfill higher demand, Fitch expects that unemployment will fall to 6.8% by end-2021, from 7.5% in July, raising household incomes.
• Furthermore, in the FY2021/22 budget, the government extended the Canada Workers Benefit and several other stimulus measures to support low-income and unemployed workers, offering additional tailwinds to private consumption. These measures, combined with Canada’s robust COVID-19 vaccine roll out, will sustain a rebound in commercial activity in the short-to-medium term.

(Source: Fitch Solutions)

• Wall Street's main indexes marched on, with the S&P 500 and Nasdaq hitting record highs on Wednesday, as fresh technology stock buying combined with hopes the Federal Reserve would keep the stimulus taps open after weaker-than-expected private payrolls data.
• Technology stocks, which tend to benefit from a low-rate environment, were up 0.5%. Apple Inc rose 1.2% to its second record high this week, and Microsoft Corp, Amazon.com Inc and Google-owner Alphabet Inc all advanced between 0.4% and 1.4%.
• Wall Street's main indexes have hit record highs recently, with the benchmark S&P 500 notching a solid 20.8% gain so far this year as investors shrugged off risks around a rise in new coronavirus infections and hoped for the Fed to remain dovish in its policy stance.

(Source: Reuters)

• The Jamaican economy grew by 12.9% for the April to June 2021 quarter, influenced by increased production in the goods producing and services industry of 7.8% and 14.0% respectively, according to the Planning Institute of Jamaica.
• The growth in the goods producing industry was mainly driven by an increase in the real value added by the agriculture, forestry & fishing (10.3%), manufacturing (3.1%) and the construction (18.3%) sectors.
• Improved weather conditions and increased demand accompanied by the relaxation of measures to contain the COVID-19 pandemic, particularly from related industries such as Hotels Restaurants, were the main factors driving the performance of the manufacturing and agricultural sectors. The expansion in the construction sector was influenced by increased capital expenditure on civil engineering activities and a rise in residential and non-residential building.
• All sectors in the services industry grew, with the highest growth seen in the hotels and restaurants sector at 330.7%. The sector rallied from depressed levels in Q2 2020 on the back of an increase in tourism activity due to relaxed travelling restrictions and vaccine-led recovery in key markets.
• The prospects for overall economic recovery in the short term are positive, with the PIOJ projecting growth between 4%-6% in Q3 2021. This should be led by the gradual recovery of the global economy, which augurs well for external demand; as well as continued recovery in the levels of domestic employment; and a strengthening in business confidence, which are both expected to support domestic demand.
• However, the spread of the Delta variant, re-imposition of stricter containment measures, adverse weather conditions during the hurricane season, plant down-time due to relatively aged plant equipment in major industries, as well as the recent fire at the Jamalco Alumina refinery, are significant downside risks to this forecast. Importantly, the imposition of no movement days to stem the spread of the virus is likely to severely impact key sectors, such as retail and distribution, weighing on business confidence and corporate profits.

(Source: PIOJ and NCBCM Research)

• Fitch Solutions believes there is an increasing probability that the ruling, centre-right Free National Movement (FNM) could fail to win re-election during the snap September 16 parliamentary election in the Bahamas, amid a slow vaccination campaign and rising cases in the country. The Bahamas are in the midst of a second wave of COVID-19 cases, with the 7-day moving average of new cases reaching an all-time high on August 1, and cases remained high throughout the month
• Weak economic activity and Bahamian voters’ tendency to vote for the out of power further undermine the FNM’s prospects. As a result, Fitch has revised down the Bahamas’ score in its Short-Term Political Risk Index (SPTRI) to 67.1 out of 100, from 72.1 due to increased risks to policy continuity.
• That being said, it has not made a final forecast for the election due to a lack of public polling and the large swings that typify Bahamian elections.

(Source: Fitch Solutions)

• Peru’s banking sector will post moderate growth in the short-to-medium term as negative base effects and policy uncertainty offset macroeconomic tailwinds.
• However, Fitch Solutions expects that sustained real GDP growth and the banking sector's relatively small size will help Peruvian banks, such as Scotiabank Peru expand at a faster pace than regional peers in the longer term.
• Fitch forecasts asset, loan and deposit growth of 5.4%, 6.1% and 6.9% in 2021 and 7.9%, 8.0% and 8.7% in 2022, down from 24.4%, 11.3% and 25.4% growth in 2020.

(Source: Fitch Solutions)

• U.S. consumer confidence fell to a six-month low in August as worries about soaring COVID-19 infections and higher inflation dimmed the outlook for the economy.
• The Conference Board's consumer confidence index dropped to a reading of 113.8 this month, the lowest since February, from 125.1 in July.
• The survey showed that consumers are less inclined to buy a home and big-ticket items like motor vehicles and major household appliances over the next six months, supporting the view that consumer spending will cool in the third quarter after two straight quarters of robust growth.
• “While the resurgence of COVID-19 and inflation concerns have dampened confidence, it is too soon to conclude this decline will result in consumers significantly curtailing their spending in the months ahead," said Lynn Franco, senior director of economic indicators at the Conference Board in Washington.

(Source: Marketwatch)

• Euro zone inflation surged to a 10-year-high in August, with further rises likely, challenging the European Central Bank's benign view on price growth and its commitment to look past what it deems a temporary increase.
• Consumer inflation in the 19 countries sharing the single currency accelerated to 3% this month from 2.2% in July, far above expectations for 2.7% and moving well clear of the ECB's 2% target.
• The increase was fuelled by energy costs, but food prices also surged, while there were unusually large increases in the prices of industrial goods too, according to Eurostat, the EU's statistics agency.
• Markets mostly shrugged off the data, with stocks rising and yields increasing just a basis point or two, suggesting the narrative of temporary inflation and ultra-easy central bank policy for years to come remains the central one.

(Source: Reuters)

• Data from the April 2021 labour market survey indicates that more than half of the 151,100 persons who lost their jobs in July 2020, during the initial stages of the COVID-19 pandemic, have been reinstated according to Planning Institute of Jamaica (PIOJ) Director General, Dr. Wayne Henry.
• The unemployment rate for April 2021 was 9.0% compared with a rate of 7.8% in April 2019. This figure amounts to about 84,400 persons. No survey was undertaken in 2020 due to COVID-19 as such the unemployment rate for April 2020 is unavailable. Notably, a decline in the labour force by 40,500 persons to 1,206,000 in April, relative to the same period in 2019 contributed to the improvement in the unemployment rate. When compared with January 2020 when Jamaica recorded its pre-COVID-19 employment high, employment levels have improved and have been doing so since July 2020, as the economy gradually reopened and restrictions were relaxed.
• The PIOJ expects pre-COVID-19 employment levels should be attained in the fiscal year 2022/23. This will be influenced by continued recovery in the tourism sector, and higher private consumption, which will drive the demand for goods and services and the need for labour to facilitate their production. Notwithstanding, the spread of the delta variant of the coronavirus has resulted in tightened restrictive measures including earlier curfews and no movement days. This may force employers to cut staff hours or even lay off some workers and cause a rise in the unemployment rate.

(Source: JIS News & NCBCM Research)