• Point-to-point (P2P) inflation inched up to 5.3% in April, up 30 basis points from 5.0% in March. This marks the second consecutive P2P increase following February’s 4.4%.
• The average price paid for goods and services by Jamaican consumers fell in April as seen by a 0.4% decline in the All-Jamaica Consumer Price Index (CPI). The largest contributor to the downward movement was a 1.4% decline in the index of the ‘Housing, Water, Electricity, Gas and Other Fuels’ division, influenced mainly by a 4.0% reduction in the index of the group ‘Electricity, Gas and Other Fuels’ as electricity rates fell.
• A marginal reduction (-0.5%) in the heavily weighted index for the division ‘Food and Non-Alcoholic Beverages also contributed to the downward movement in April 2025. The slight falloff in the index was due to a 2.8% decline in prices for some agricultural produce as production continues to improve post-Beryl.
• However, April’s outturn was tempered by a 0.4% increase in the index of the ‘Health’ division, primarily due to higher costs for prescription medication.
• While it is higher than the 5.0% between March 2024 and March 2025, April’s monthly CPI reading continues to support the Bank of Jamaica’s (BOJ’s) expectations that inflation will remain anchored within its target range of 4%-6% over the next two years. Still, uncertainties surrounding the changing trade policies of our main trading partner could result in a less favourable outcome. These policies could result in higher inflation in the U.S. and higher imported inflation in the domestic market. However, the policies remain fluid, and the final level of tariffs is still unknown as negotiations continue between the U.S. and its trade partners.
• At its last monetary policy meeting in March, the BOJ kept its policy rate at 6.00% as it continues to monitor the effects of U.S. trade policies on the local economy. The next policy decision will be on the 20th of May, when it is expected that BOJ will maintain its policy rate at 6.00%.

(Sources: STATIN and NCBCM Research)

• Caribbean Producers Jamaica (CPJ) reported strong earnings for its first quarter ended March 31, 2025 (Q1 2025), with net profit increasing by 28.5% year-over-year, driven by higher sales volumes and expanded product offerings.
• Revenues rose to $45.97Mn, marking a substantial 21.5% (or $8.14Mn) increase, compared to $37.83Mn in Q1 2024. This growth was fueled by increased sales to large resorts and the successful introduction of new products, notably the Stry8 Vybz rum, developed in partnership with Angostura Limited of Trinidad and Tobago.
• The company also improved its protein supply through increased manufacturing capacity and expanded its entire spirits portfolio. These efforts, along with an expanded distribution footprint and intensified marketing strategies, contributed to positive top-line performance.
• However, top-line growth was met by a 26.9% rise in direct costs totalling $33.30Mn. Consequently, gross margin declined to 27.6% of revenues, down from 30.6% in Q1 2024. 
• Operating expenses also rose by 5.7%, reflecting higher selling and administrative costs from increased headcount as the company prepared for upcoming business opportunities by employing additional staff. Other expenses related to manufacturing upgrades also contributed to the higher operating costs. Financing costs also increased (+15.3%).
• Despite the increase in direct and indirect costs, CPJ’s bottom line growth was robust, supported by an improvement in revenue and operating profit (+20.22%). Consequently, there was an accompanying improvement in its net profit margin to 3.9% from 3.7% in the prior corresponding period.
• Looking ahead, the company is poised for several operational improvements throughout 2025. These include its manufacturing plant upgrade, slated for completion in June 2025; the implementation of warehouse storage and distribution in Kingston in June 2025; and ERP implementation, which should enhance efficiency and overall productivity by July 2025.
• At market close on Thursday, CPJ’s price was J$8.03, down 3.40% since the start of the year. At its current price, the company trades at a P/E of 8.8x, which is below the Main Market Distribution and Manufacturing Sector average of 15.97x.

(Sources: CPJ Financial Release & NCBCM Research)

• Fitch forecasts that Costa Rica’s current account deficit will remain stable, edging up slightly from 1.4% of GDP in 2024 to 1.5% in 2025, before reaching 1.6% in 2026. This reflects a modest deterioration in the goods trade deficit, which is expected to widen from 2.6% of GDP to 3.8%.
• Agricultural exports underperformed in Q1 2025, reinforcing the view that pineapples, bananas, and coffee—highly reliant on the US market—remain among the most exposed to trade disruptions and falling global food prices. Therefore, a slowdown in the US will likely deepen this contraction in H2 2025 and 2026. 
• However, medical devices, which account for just under half (43%) of total goods exports, are expected to remain insulated. These high-value products are deeply integrated into US supply chains, and many multinational manufacturers operate locally to take advantage of lower labour costs. As a result, Fitch is not overly concerned about broader export disruption.
• Meanwhile, imports are expected to slow as a share of GDP, from 25.5% in 2024 to 24.3%, owing to the negative terms of trade effects from lower oil prices, Costa Rica’s main import. In contrast, input purchases and consumer goods imports are expected to remain strong, as household consumption remains a key driver of growth in 2025. Overall, the goods trade balance posted a deficit of 1.0% of GDP in Q1, slightly narrower than the 1.2% recorded in the same period last year.
• That said, both the service trade surplus and primary income deficit are set to improve in 2025, with the former rising from 9.3% of GDP to 10% and the latter narrowing from 8.6% to 8.2%. Service exports will remain strong, supported by Costa Rica’s role in global value chains for business services, IT, and other high-value sectors.
• On the primary income side, lower interest payments due to fiscal consolidation will help reduce net income outflows. Although rising FDI inflows could limit further improvement by increasing profit repatriation, this should be partially offset by a continued trend toward reinvestment, particularly in free trade zones.

(Source: Fitch Solutions – BMI)

• The Bank of Mexico lowered its benchmark interest rate by 50 basis points for the third consecutive meeting on Thursday, as inflation remains within the bank's target range, but uncertainty persists around trade tensions and a weak economy.
• The unanimous decision by the bank's governing board, which was expected by analysts polled by Reuters, brings Mexico's benchmark rate to 8.50%, its lowest level since August 2022.
• In a statement announcing the decision, the Mexican monetary authority said it could consider cutting the rate by a similar magnitude at future meetings. The decision comes days after official data showed headline inflation in Latin America's no. 2 economy hit 3.93% on an annual basis in April, accelerating from the previous month but still within the central bank's target range. Banxico, as Mexico's central bank is known, targets inflation at 3%, plus or minus a percentage point.
• The bank said its board considered Mexico's weak economic activity, "as well as the possible changes in trade policies worldwide." Banxico upheld its expectation that inflation will converge to its 3% target in the third quarter of 2026, but flagged risks from trade tensions with the United States, its top trading partner.

(Source: Reuters)

• U.S. bookings for container transport from China to the United States spiked almost 300% in the wake of the United States and China pausing punishing tit-for-tat tariffs, container-tracking software provider Vizion said on Wednesday
• Average cargo bookings for the seven days ended Wednesday, May 14, soared 277% to 21,530 twenty-foot equivalent units (TEUs) from 5,709 TEUs for the average for the seven days that ended on May 5, said Ben Tracy, Vizion's vice president of strategic business development.
• U.S. importers slammed the brakes on shipments after April 2, when Trump announced plans to slap 145% tariffs on goods made in China. That trade restarted after the U.S. and China on Monday announced a 90-day thaw in their bruising trade war.
• The U.S. said it would reduce tariffs it imposed on Chinese imports in April to 30% from 145%, while China reduced duties on U.S. imports to 10% from 125%. The United States said it would reduce tariffs it imposed on Chinese imports in April to 30% from 145%, while China reduced duties on U.S. imports to 10% from 125%.
• German container shipping firm Hapag-Lloyd earlier said its bookings were up 50% for U.S.-China traffic week on week in the first few days of this week. CEO Rolf Habben Jansen told Reuters: "I expect that there will be additional volume between China and the U.S. That is what we have already seen in the last few days.

(Source: Reuters)

• U.S. manufacturing production fell more than expected in April amid a sharp decline in motor vehicle output, and the sector could struggle to regain its footing in the second quarter because of tariffs.
• Factory output dropped 0.4% last month after an upwardly revised 0.4% gain in March, the Federal Reserve said on Thursday. Economists polled by Reuters had forecast production would slip 0.2% after a previously reported 0.3% rise.
• Production at factories increased 1.2% on a year-over-year basis in April. President Donald Trump's shifting tariffs policy poses a significant headwind to manufacturing, which accounts for 10.2% of the economy and relies heavily on imported raw materials.
• While the Trump administration slashed duties on Chinese imports last weekend to 30% from 145%, a 10% tariff on nearly all imports remained in place as did a 25% tax on steel and aluminum, as well as motor vehicles and parts.
• Manufacturing grew at a 4.8% rate in the first quarter after a prolonged slump due to higher interest rates. Motor vehicle and parts output plunged 1.9% last month after increasing in the prior two months, likely as automakers tried to stay ahead of tariffs. Durable manufacturing production fell 0.2%. Nondurable manufacturing production decreased 0.6%, with most industries posting declines. Mining output slipped 0.3% after posting strong gains in the previous two months. Utilities production rebounded 3.3%. That followed two straight monthly declines.
• Capacity utilisation for the industrial sector, a measure of how fully firms are using their resources, dipped to 77.7% from 77.8% in March. It is 1.9 percentage points below its 1972–2024 average.

(Source: Reuters)

• After reporting robust earnings in its first quarter ended December 31, 2024 (Q1 2025), Salada Foods' performance stalled in Q2 2025, with the company recording a 10.1% dip in earnings for the six months (6M) ended March 31, 2025. The decline was primarily driven by higher operating costs.

• Gross profit growth increased by only 3.3% to J$236.82Mn reflecting modest revenue growth that was partially eroded by higher direct costs. For the 6M period, revenues increased by 5.7% to J$767.90Mn, backed by a 6.6% improvement in domestic market sales and a 1.6% uptick in export revenues. This growth reflects the company’s ongoing strategic marketing initiatives and distribution expansion efforts. However, direct costs grew in tandem, with cost of sales rising by 6.8%.

• Continued investment in developing export markets to support brand expansion resulted in operating costs surging by 22.9%. and a 13.6% drop in operating profit to J$107.19Mn, compared to J$124.07Mn in the prior year period. The combined effect of rising costs and modest revenue growth compressed the operating margin, which fell from 17.1% to 13.9% in H1 2025.

• Despite a 47.0% uptick in net financing income, as interest income on invested funds exceeded financing expenses, Salada’s net profit margin declined to 11.6% from 13.6% in the prior corresponding period.

• At the close of the market on May 14, 2025, Salada’s shares closed at $3.25, implying a P/E ratio of 19.1x, which is above the Main Market Distribution & Manufacturing Average of 15.9x.

(Sources: Salada Foods Financial Release & NCBCM Research)

• The staff of the International Monetary Fund (IMF) have commended Jamaica following their official visit to the island from April 30 to May 7, during which they conducted the 2025 Article IV consultation.

• Over the last decade, Jamaica has successfully reduced its public debt, firmly anchored inflation and inflation expectations, and strengthened its external position. The country has built an enviable track record of investing in institutions and prioritising macroeconomic stability. Jamaica has also navigated recent global shocks and natural disasters in a manner that is agile, prudent, and supportive of growth, according to the concluding statement.
• Although GDP declined in FY2024/25 due to hurricane Beryl and tropical storm Raphael, which damaged agriculture and infrastructure and undermined tourism, economic activity is projected to normalise as these effects wane.

• Unemployment has fallen to all-time low levels (3.7% in January 2025); however, low productivity has been worsened by structural issues, including high crime, barriers to competition, poor educational outcomes, inadequate infrastructure, and trade barriers.

• Further, while inflation has converged to the Bank of Jamaica’s (BOJ’s) target band of 4-6%, the Fund noted that implementing reforms to enhance the foreign exchange market and allow greater exchange rate flexibility would strengthen the transmission mechanism of monetary policy.

• Nonetheless, the current account has shown a modest surplus for the last two fiscal years, supported by robust tourism revenues and high remittances. Consequently, the international reserves’ position has continued to improve.

• The IMF also acknowledged that the Government of Jamaica (GOJ) continues to implement sound macroeconomic policies, supported by effective fiscal policy frameworks. As a result, a primary surplus is expected for FY2025/26, leading public debt to fall towards 65% of GDP by the end of the fiscal year, the lowest level in 25 years and well below pre-pandemic levels. 

• Looking ahead, the outlook points to growth settling at its potential rate once the FY2025/26 recovery is complete and with inflation stabilising at the BOJ’s target range. Nevertheless, global developments require continued close monitoring. Global downside risks from tighter financial conditions, slower growth in key tourist markets, and trade policy disruptions remain significant. Additionally, extreme weather events such as floods, hurricanes, or earthquakes could negatively affect economic activity.

(Source: IMF)

• Newly elected Prime Minister Kamla Persad-Bissessar entered office on May 1, 2025, with a strong electoral mandate, a large parliamentary majority, and a potentially amenable opposition leader, supporting Trinidad and Tobago’s (T&T’s) policymaking environment and political stability outlook. However, T&T’s precarious fiscal position may hinder the incoming government’s ability to follow through on campaign promises, including significant increases in public sector wages and proposed tax cuts.

• Immediately following her swearing-in as Prime Minister, Persad-Bissessar announced several top policy priorities, including her intent to abolish the Trinidad & Tobago Revenue Authority (TTRA), an opposition-led initiative to improve tax collection efficiency and collect taxes in arrears, estimated at 7.0% of GDP in Q1 2018. Instead, PM Persad-Bissessar announced her intention to strengthen the Board of Inland Revenue (BIR) by hiring additional commissioners.

• With the IMF emphasising the importance of strengthening T&T’s tax collection and compliance capacity, the ability of the BIR to close the tax gap and identify new revenue streams will be crucial for fiscal stability, especially given the reported budgetary shortfalls.

• However, budget constraints and a deteriorating fiscal position present a downside risk to both Trinidad and Tobago’s fiscal outlook and public support for the government.

• On May 8, 2025, PM Persad-Bissessar reported that Trinidad and Tobago was in a significant budgetary hole, with a deficit of TTD 4.42Bn for May, and a projected deficit of TT$11Bn, an estimated 6.7% of GDP for the 2024/2025 fiscal year.

• Additionally, the PM announced significant shifts in energy policy, indicating that the government would no longer pursue the Dragon gas project. Instead, T&T would look to import natural gas from other sources, including Guyana and Grenada. 

• Finally, parliament will convene in May with proposed ‘stand-your-ground’ laws taking priority. As part of their anti-crime measures, the United National Congress (UNC) has pledged to expand access to firearms for law-abiding citizens, among other reforms. However, the effectiveness of these policies in reducing violence will remain to be seen, with previous efforts to crack down on crime yielding minimal results. 

(Source: Fitch Connect)

• Panama has announced this week that Colombian, Ecuadorian, and Venezuelan migrants residing in Colombia returning from North America will be able to be included on repatriation flights to these two countries, paid for by the United States. 

• “Within the migration memorandum of understanding that Panama signed with the United States (on July 1, 2024), we have also achieved that those individuals, such as Colombians, Ecuadorians, and Venezuelans residing in Colombia, can approach immigration, and we will finance their transfer to those countries through that memorandum,” said Roger Mojica, director of the National Migration Service. 

• He explained that “if there is anyone interested in that regard, we will include them as part of the memorandum of understanding program, and their transfer will be financed as if it were the flights we are operating, because the flow through Darién has decreased. We still have the funds, and we can take advantage of those opportunities we established with the United States.” So far, only Colombian, Ecuadorian, and Venezuelan migrants residing in Colombia can apply for the return flights, according to official information.

• For context, on July 1, 2024, the same day Panamanian President José Raúl Mulino took office, the United States and Panama signed a memorandum of understanding to reduce the migratory flow through the Darién Gap, the jungle bordering Colombia used daily by migrants who dream of reaching the United States in search of better living conditions. Since then, the U.S. has funded nearly $2.7Mn in flights and tickets for the return of migrants to their countries of origin through that agreement, according to information from the U.S. government released last February. 

• More than 40 charter flights have been carried out to more than 14 countries, including Colombia, Ecuador, India, and Vietnam, with 1,729 migrants. In addition to commercial flights to repatriate people from countries such as Russia, Afghanistan, Pakistan, Ghana, and Turkey, according to official data shared by U.S. authorities. 

(Source: Newsroom Panama)