• The Ministry of Tourism is reporting that Jamaica earned US$4.3Bn from the industry in 2024, with some 4.3Mn visitors according to Portfolio Minister, Hon. Edmund Bartlett.
• Bartlett said the sector finished the year strong, despite the slight shortfall in arrival figures due to aviation disruptions, Hurricane Beryl and travel advisories.
• “We had 68,000 less seats into Jamaica, which meant there was a natural reduction in the projected figures in terms of arrivals. Tourism, as you know, is resilient. Notwithstanding those disruptions, we are coming out of the year with a small increase in arrivals, but the earnings are in line with what we projected,” Mr. Bartlett said.
• Minister Bartlett further disclosed that Jamaica is on track to realise its 5x5x5 growth strategy of five million visitors and earnings of US$5 billion by 2025. 1.6Mn airline seats have been secured so far for the winter season, which, he said, “is the largest amount ever”.
• “Assuming an 80% load factor, that is … the plane is coming 80% full, we would bring 1.3Mn visitors in that space, and that’s a 12.9% increase over last year. So, the winter is strong, and winter is the strongest period for earnings in tourism, and so we anticipate a very strong first quarter of 2025,” the Minister said.

(Source: JIS)

• Jamaica’s commitment to climate justice and social equity has been given a boost by the International Labour Organization (ILO), through its Just Transition Project. The two-year project was officially launched on November 27, 2024, and is scheduled to be completed in 2026.
• “Through the ILO Just Transition project, Jamaica is taking bold strides towards a sustainable future, ensuring that its workers are protected and that policies are inclusive and forward-thinking,” says Just Transition Officer and Project Coordinator in Jamaica, Marissa Shepherd. Jamaica’s journey towards a sustainable economy will be guided by the Just Transition Project implementation, with the primary goal of fulfilling international commitments while also protecting the livelihoods of local individuals and communities.
• By integrating policy coherence, fostering social dialogue, and enhancing social protection, this project is set to outline a thoughtful pathway towards a just and equitable future for all Jamaicans.
• ILO is a United Nations agency that promotes social justice and fair labour practices globally. Its initiatives aim to advance labour rights and improve working conditions through partnerships and innovative policy frameworks.

(Source: JIS)

• Fitch Ratings on Tuesday upgraded its rating for El Salvador to B- from its prior CCC+ status, along with a stable outlook, citing a reduction in financing needs helped by a recently announced International Monetary Fund (IMF) program. The B- rating is, however, six notches into the credit rating agency's speculative grade, or junk, status.
• Last month, the IMF announced a staff-level agreement with El Salvador on a new loan program for about $1.4 billion to support government reforms.
• "Fitch expects the program to support the implementation of fiscal consolidation measures which in conjunction with the reduction in outstanding short-term debt owed to domestic banks and buyback of external debt, due to last year's liability management operations, should reduce financing needs," according to a statement from the ratings agency.
• The rating agency added that successful fiscal consolidation could boost investor confidence and potentially enable future debt issuances.  It expects Salvadoran economic growth to slow to 1.9% in 2024, from a 3.5% expansion in 2023, and then pick up to 2.3% growth this year despite the government's heavy debt burden.

(Source: Reuters

• Eurozone inflation accelerated in December, an unwelcome but anticipated blip that is unlikely to derail further interest rate cuts from the European Central Bank. Inflation in the 20 nations sharing the euro picked up to 2.4% last month from 2.2% in November, Eurostat said on Tuesday. This was in line with expectations in a Reuters poll of economists, lifted by more expensive energy and stubbornly high service costs.
• Inflation has been oscillating just above the ECB's 2.0% target recently and data over the next few months could remain choppy, but the overall trend is expected to point downwards with the ECB's goal likely to be hit sometime in the second half of the year.
• Underlying inflation, a valuable indicator of the durability of price growth, remained sticky, possibly fuelling calls for the ECB to exercise caution in removing policy restrictions over the coming months. Price growth excluding volatile food and energy held at 2.7% and the closely watched services component, the single biggest item in the consumer price basket, accelerated to 4.0% from 3.9%.
• Adding to the case for caution, a separate consumer survey from the ECB showed both near and medium-term inflation expectations were rising, with figures three years ahead seen at 2.4%, well above the previous survey's 2.1% and the ECB's own target. December's inflation jump, anticipated by markets after data out of Spain and Germany foreshadowed the trend, is not overriding near-term rate cut bets for now and investors still fully price in a further reduction on Jan 30.
• However, a cut at every meeting through June is no longer fully expected, with investors seeing a 50% chance that the ECB will skip a meeting sometime in the first half. The 3% deposit rate is then seen to hit 2% by the end of the year. One reason for the more cautious market pricing is the dollar's recent strength which is making imports of key commodities more expensive, quickly feeding through to prices via more expensive energy, including car fuel.

(Source: Reuters)

• Major central banks in December delivered their biggest policy easing push since the spring 2020 COVID rate-cutting frenzy, with the latest moves making the annual 2024 easing effort the biggest in 15 years as policymakers brace for unsteady times.
• Among central banks overseeing the 10 most heavily traded currencies, five of the nine that held meetings in December cut interest rates. Central banks in Switzerland and Canada shaved off 50 basis points (bps) each, while the Federal Reserve, the European Central Bank and Sweden's Riksbank trimmed benchmarks by 25 bps each.
• Policymakers in Australia, Norway, Japan and Britain left interest rates unchanged, while New Zealand did not hold a meeting. The latest moves come ahead of Donald Trump taking over the White House on Jan. 20, with uncertainty over how aggressively the U.S. President-elect will pursue his trade and economic policies keeping markets on edge.
• December marked the biggest monthly tally of rate cuts across G10 central banks since March 2020, when turmoil over the COVID pandemic roiled global markets. The latest moves took the 2024 rate cut total to 825 bps - the biggest annual easing effort since 2009. "2024 was another strong year for asset returns, as economic growth surprised on the upside and central banks finally began to cut rates," said Henry Allen, macro strategist at Deutsche Bank.
• Across emerging markets, 14 of a Reuters sample of 18 central banks in developing economies held rate-setting meetings in December. Turkey delivered an eye-catching 250 bps cut, while Mexico, Colombia, Chile, and the Philippines lowered rates by 25 bps each.

(Source: Reuters)

• The Government will be providing close to $1Bn to establish cold storage facilities to benefit farmers across the island this year. The investment is among initiatives to boost agricultural production, which were announced by Prime Minister, Dr. the Most Hon. Andrew Holness (PM Holness), during his 2025 New Year’s Day message on January 1.
• PM Holness informed that Minister of Agriculture, Fisheries and Mining, Hon. Floyd Green, has been tasked to develop a plan to increase production of the most consumed staples and proteins such as potato, red peas, onion, cabbage, carrot, tilapia and goats.
• PM Holness noted further that the Southern Plains Agricultural Development Programme, which will irrigate 1,400 acres of land between Clarendon and St. Catherine, will be commissioned into service this year. Additionally, he announced that ground will be broken for the Pedro Plains Irrigation Scheme, which will provide irrigation for a further 6,000 acres of land.
• He noted that the project, which will be the largest irrigation programme in Jamaica’s history “will take water from the Black River to our most arable agricultural areas.” This should help to mitigate the effects of drought conditions on agricultural production, which have plagued the island periodically in recent years.
• The Government will also be supporting farmers with a programme of mechanisation and technology integration. “Growing and building resilience in the agricultural sector is an important strategy for our food security and limiting the impact of food inflation,” PM Holness said.
• Overall, these agricultural investments could help save foreign currency by replacing imports with competitive local products, particularly as we enter a period likely to be characterised by increased protectionism, which could reduce export earnings.

(Sources: JIS & NCBCM Research)

• During the last six workdays of December 2024, the Bank of Jamaica (BOJ) issued currency totalling $9.3Bn and redeemed $0.2Bn from the financial system. This net currency issue of $9.1Bn for the period contributed to an overall growth of $21.1Bn or 8.0% in the currency stock for December 2024 relative to the previous month.
• The growth rate of December’s issued currency was lower than the Bank’s projection of $24.4Bn or 9.2% and the 9.3% recorded for December 2023.
• As at 31 December 2024, the currency stock was $286.1Bn, representing an annual increase of 3.1%, compared to 18.7% at end-December 2023. This deceleration is consistent with a moderation in the growth in nominal GDP, reflected in part in lower inflation.
• Adjusted for inflation, the currency stock is estimated to have declined by 0.9% over the period, compared to the real growth of 11.1% for the corresponding period in 2023.
• The Bank anticipates that most of the currency issued during December 2024 will be redeemed during January 2024. For the last five years, net currency redemption in January averaged 77.4% of the net currency issued in the preceding month.
• Typically, the BOJ issues and redeems notes and coins daily to meet the demand for cash from individuals and businesses. There is normally a stronger demand for currency during December, associated with increased spending over the holiday period. Financial institutions therefore request more currency from BOJ to satisfy this demand.

(Source: BOJ)

• Brazil's trade surplus shrank by nearly 25% in 2024 compared to the previous year, to $74.6Bn, official data showed on Monday, January 6, 2025, driven by higher imports as Latin America's largest economy outpaced initial growth expectations. Economic activity consistently outperformed expectations throughout the year, with the government estimating gross domestic product growth of 3.5% for 2024. The annual result followed a $4.8Bn surplus in December, which exceeded a $3.9Bn forecast in a Reuters poll of economists.
• Despite the 24.6% drop from 2023, the 2024 trade surplus was the second largest since records began in 1989, trailing only the $98.9Bn surplus achieved the previous year.
• Exports remained largely flat, slipping 0.8% from 2023 to $337Bn, impacted by lower prices and volumes for key Brazilian commodities such as soybeans and corn. Iron ore also experienced a year-over-year decline due to price factors. These moves overshadowed the rise in crude oil shipments, which became Brazil's top export in 2024 - a position the government does not expect to sustain moving forward.
• Conversely, Brazilian imports rose 9% in 2024 over the previous year, to $262.5Bn, buoyed by strong domestic demand and increased investments, particularly in the acquisition of capital goods.
• For 2025, the trade surplus is projected to range between $60Bn and $80Bn, according to the Ministry of Development, Industry, Trade, and Services. This will likely be driven by continuous growth in commodity production.

(Source: Reuters)                                                                                                                

• The Government of Antigua and Barbuda announced that on January 2, the first instalment of the LIAT Employees Compassionate Payment Bond was transferred to BDO Eastern Caribbean, paving the way for the support and upliftment of eligible former LIAT employees.
• A release from the Office of the Prime Minister stated that this allows former LIAT workers stationed in Antigua to begin receiving payments toward their severance.
• The Compassionate Payment Bond, issued by the Government, is a 10-year bond valued at $16.72Mn with an annual interest rate of 2%. The bond addresses Antigua and Barbuda’s 32% share of the severance owed to 405 former employees of LIAT (1974) Ltd, reflecting the nation’s ownership share in the regional airline.
• The release further stated that the bond demonstrates the government’s commitment to the former LIAT employees and ensures some relief for those affected by the airline’s closure.
• “Former LIAT 1974 Ltd employees are advised to contact BDO Eastern Caribbean, the appointed escrow agent, to receive their payment. BDO is responsible for managing and distributing the bond payments to ensure a smooth and equitable process for all eligible recipients,” the communique added.
• It added that Prime Minister Gaston Browne made the announcement of the Compassionate Payment Bond late last year during his Budget Presentation in Parliament and that his “government’s intervention in addressing the concerns of the former LIAT workers will provide much-needed relief and demonstrates government’s dedication to fairness and justice, representing meaningful action on behalf of the affected workers”.

(Source: Antigua Observer)

• British business activity growth slowed to a crawl in December and employers cut staffing at the fastest rate in almost four years as a slump in corporate morale after the government's budget rumbled on, a survey showed on Monday.
• The final headline UK S&P Composite Purchasing Managers' Index (PMI) inched down to 50.4 from 50.5 in November, its lowest since October 2023. A preliminary reading for December had also been 50.5. The survey is barely above the 50 dividing line between growth and contraction and adds to a run of lacklustre economic indicators since Finance Minister Rachel Reeves announced the biggest tax rises since 1993 in October.
• Britain's economy stagnated in the three months to September and the Bank of England has estimated that it will flatline again in the fourth. While the BoE thinks higher public spending will temporarily boost growth this year, a big question for its policymakers, as they consider how quickly to cut interest rates, is whether Reeves' tax rises lead mostly to lower employment, higher prices or reduced profits and investment.
• Investors are pricing in just two quarter-point rate cuts by the BoE in 2025 as inflation pressures remain sticky. "A post-Budget slump in business optimism persisted in December, with output growth expectations for the year ahead unchanged from November's 23-month low," said Tim Moore, economics director at S&P Global Market Intelligence.
• Companies that had cut staffing in December overwhelmingly cited rising costs, particularly due to Reeves' increase in employer social insurance contributions from April. The PMI's gauge of future output fell to its lowest level since December 2022, while costs faced by businesses increased at the fastest pace since April. The BCC survey of nearly 5,000 businesses showed that 55% of firms planned to raise prices, up from 39% the quarter before, while 24% intended to cut investment, up from 18% previously.

(Source: Reuters)