• Argentine authorities are committed to reach an agreement with the International Monetary Fund no later than the end of March as part of an understanding with the Paris Club to avoid default, according to the group’s second-ranking official. 
• The country also agreed to treat all other external creditors in a comparable way as part of an accord with the group of wealthy nations in which it will make a partial payment, the Club’s Secretary General Schwan Badirou-Gafari said in an emailed response to questions. 
• “Given the commitments made by the authorities regarding the conclusion of an agreement with the IMF as soon as possible and not beyond end March 2022, as well as their commitment to comply with the comparability of treatment, Paris Club would be in a position to avoid declaring a default at end July,” said Badirou-Gafari. 
• Argentina announced on Tuesday that it would make a partial US$430Mn payment to the club to avoid a default after missing a US$2.4Bn payment that was due last month. 
• As part of the understanding, the country has until March 31 2022 to complete its restructuring with the Club, but Economy Minister Martín Guzmán said that deadline wasn’t going to have any impact on the timeline for IMF negotiations. 
• An IMF agreement would help the country to make policy and fiscal adjustments that will allow for a reduction in the country’s unsustainable debt levels. At the end of December 2020, the country’s government debt stood at 102.5% of GDP (CEIC data) and the government had defaulted on payments twice in 2020. According to Bloomberg, traders are almost certain that it will default once more in 2021.

(Source: BA Times & NCBCM Research)

• S. Treasury Secretary Janet Yellen on Wednesday warned Congress that the United States risks a debt default and a new financial crisis as soon as August if lawmakers fail to act quickly to suspend or raise the federal borrowing limit. 
• In testimony to a Senate Appropriations subcommittee, Yellen said defaulting on U.S. debt obligations would be "unthinkable" and "would have absolutely catastrophic economic consequences." 
• Yellen said that to avoid uncertainty for financial markets, Congress should pass new debt limit legislation - allowing the Treasury to continue borrowing - before the latest suspension expires on July 31. 
• A first-ever default on U.S. government debt obligations "would precipitate a financial crisis, it would threaten the jobs and savings of Americans at a time when we're still recovering from the COVID pandemic," Yellen said.

(Source: Reuters)

• Inflation pressures faced by British firms hit record levels this month, and growth in the private sector cooled only slightly from an all-time high in May when coronavirus restrictions were lifted, a survey showed on Wednesday. 
• The preliminary reading of the IHS Markit/CIPS UK Composite Purchasing Managers' Index (PMI) pointed to one of the strongest monthly improvements in business activity since 1998, with a reading of 61.7 - not far off May's unprecedented 62.9. 
• Input costs matched a previous record increase from June 2008 and prices charged by firms rose by the largest amount since these records began in 1999, as disruption to supply chains caused a scramble for components. 
• Inflation faced by consumers could now have a lot further to rise after breaking above the Bank of England's 2% target last month, said Chris Williamson, chief business economist at IHS Markit, which compiles the survey. 
• The BoE is not expected to change monetary policy when it announces the outcome of its June policy meeting on Thursday, but investors are waiting to hear whether it is sticking to its view that the rise in inflation is likely to prove transient.

(Source: Reuters)

• The Ministry of Health and Wellness is advising Jamaicans travelling overseas to observe strict safety protocols to prevent importation of the Delta and other variants of the coronavirus (COVID-19). 
• Chief Medical Officer (CMO), Dr. Jacquiline Bisasor-McKenzie, who was addressing the Ministry’s virtual COVID Conversations press briefing recently, said preliminary reports coming out of the UK indicate that this variant has been found to be 40% more transmissible. 
• Expressing concern about the highly contagious and virulent nature of the Delta and other COVID-19 variants, the CMO said maintenance of quarantine measures for persons who come into country are even more important to prevent importation of these variants. 
• Bisasor-McKenzie encouraged Jamaicans travelling abroad to continue to practise established COVID-19 safety protocols, even when they enter those jurisdictions that do not require maintenance of the precautions. 
• “They may bring back into the country a variant that is naïve to the population and, of course, that means that it will spread very, very quickly within the population. With the vast number of persons in country that are not vaccinated, we remain at risk from all the strains of the COVID-19. So we are still at risk of exposure for the variants, which present an additional risk,” she emphasized. 
• With only 5.5% of the population partially vaccinated, the spread of Delta or other COVID-19 variants of the virus would result in the re-imposition of strict containment measures that would constrain commercial activity and reduce the likelihood of a recovery in economic activity this year.

(Source: JIS & NCBCM Research)

• Tourism Minister, Hon. Edmund Bartlett has revealed that since its reopening in June 2020, the tourism sector has been driving the economic recovery of Jamaica’s economy, through a steady increase in arrivals and tourism earnings. 
• Minister Bartlett expressed that “preliminary figures indicate that since the reopening of the tourism sector on June 15, 2020, Jamaica has recorded a total of 816,632 stopover visitors and generated earnings of approximately US$1.31 billon (J$196 billion), over the one-year period.” 
• He emphasized that this is further proof that the tourism sector is on a steady path to recovery. Minister Bartlett adds that “for the current calendar year, the Tourism Ministry is reforecasting to deliver 1.61Mn visitors against an earlier estimate of 1.15Mn, an improvement of 460,000 more visitors.” If this is realized, total visitor arrivals would be 2.62Mn below the total 4.23Mn arrivals reported in 2019, but 0.28Mn above total arrivals in 2020. 
• The Minister credits this improvement, in part, to the development of robust health and safety protocols for the sector as well as the establishment of the Tourism COVID-19 Resilient Corridors, which have seen a very low infection rate of 0.6%. He also noted that the measures enabled Jamaica to welcome some 342,948 tourists during the first five months of this year (January to May). This is 1.65Mn and 0.68Mn below the total arrivals after the same period in 2019 and 2020, respectively. 
• However, given that this 5-month total represents 36,675 more visitors than that recorded from June to December 2020 (following the reopening of the sector), there has been gradual improvement in the sector supported by the vaccine-led recovery in source markets, particularly the US.  
• The Ministry remains cautiously optimistic of cruise passengers starting to return around July/August. The first cruise out of North America to the Caribbean took place very recently and that has heightened expectations of more setting sail soon.

(Source: JIS & NCBCM Research)

• Royal Caribbean and Carnival cruise lines have agreed to a new combined investment of $350Mn in the Grand Bahama Shipyard, Prime Minister the Most Hon. Dr. Hubert Minnis announced today in his wrap-up of the 2021/22 Budget Debate in the House of Assembly. 
• The Prime Minister pointed out that to understand the scale of this investment, the original investment and other investments to date in the Shipyard have totaled approximately $250Mn dollars. “This new investment will match this and exceed it by $100Mn,” said Prime Minister Minnis on Monday 21 June 2021. 
• The proposed infrastructure works will replace the two damaged docks with larger docks. The new docks will be capable of handling and servicing the largest ships in the world, said the Prime Minister. 
• Once the expansion is completed, the shipyard will be the largest civilian shipyard in the Americas. Prime Minister Minnis said the new investment will result in a notable increase in employment and economic activity on Grand Bahama and for local businesses throughout Freeport and the rest of the island

(Source: Office of the Bahamian PM)

• Inflation has picked up markedly in recent months, both in emerging markets (EMs) and developed markets (DMs). The simple average of inflation among 22 of the world’s largest EMs rose from 3.8% y-o-y at the start of 2021 to 5.9% in May. However, it is believed that the rise will be temporary. 
• Accelerating inflation has already prompted interest rate hikes in Brazil, Russia, Mexico and elsewhere. It is expected that policymakers in EMs, including South Africa, Egypt and Colombia, will follow their lead by hiking their key rates before the end of 2021. 
• Even so, the risk of an economically disruptive acceleration in EM-wide inflation is low. For one, recent inflation prints may mark a sharp increase from the abnormally slow inflation of the past year, but they are not particularly elevated by recent standards and even these figures are currently being flattered by the base effects caused by lockdowns in 2020. 
• In addition to fading base effects, there are two key reasons why it is forecast that current period of comparatively elevated inflation will soon fade in most economies. Firstly, temporary factors that are disrupting supply chains will probably be resolved over the coming months; and secondly, the agency believes that commodity prices have peaked and will now ease in late 2021 and into 2022.

(Source: Fitch Solutions)

• Coronavirus vaccine booster shots will likely be needed in the fall, according to experts, who are urging governments to organize them now. It comes as the Delta variant of the coronavirus, first identified in India, continues to spread rapidly across the world. 
• Some countries, like the U.S. and U.K., have already signaled that they could roll out COVID-19 booster shots within a year. Now, pressure is building on governments to mobilize booster shot programs — no easy task given the ongoing uncertainties surrounding the pandemic, vaccines and variants. 
• However, concrete plans for Covid-19 booster shots are lacking. Dr. Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, last month said it was, “just something we’re gonna have to figure out as we go.” 
• There are currently question marks over whether we actually need a third dose of any COVID-19 vaccine given that we don’t know how long immunity currently lasts. There are also unknowns regarding whether people should get a booster shot that’s the same as the vaccines they originally had. And also whether the shots need to be tweaked to deal with variants, much like the flu vaccine, or whether they can remain as they are. 
• Booster shots could potentially be rolled out before countries have even completed their initial vaccination programs. To date, almost 60% of the adult population in the U.K. is fully vaccinated, while just over 55% of adults in the U.S. are. 
• Any decision to roll out programmes to deliver booster shot to populations in developed economies in the fall, is likely to exacerbate challenges accessing sufficient doses of the vaccine by developing countries such as Jamaica and others in the region.

(Source: CNCB News & NCBCM Research)

• Iranian President-elect Ebrahim Raisi gave his first press conference since the country’s election, saying Monday his priorities would be to improve ties with regional neighbors and revive the 2015 nuclear deal — while at the same time squarely ruling out meeting with U.S. President Joe Biden. 
• The 2015 Joint Comprehensive Plan of Action, or JCPOA, brokered by the Obama administration, lifted sanctions on Iran that had crippled its economy and cut its oil exports roughly in half. In exchange for billions of dollars in sanctions relief, Iran agreed to dismantle some of its nuclear program and open its facilities to more extensive international inspections. 
• Tehran has since ramped up its nuclear activity far beyond the deal’s limits in what it says is a protest against the sanctions — sanctions that Washington says it will not lift until Iran reverses its increased nuclear activity, such as increased uranium enrichment and stockpiling.
• The deal “if revitalized, would provide a substantial lift to Iran’s economy — it could plausibly expand by 8-10% per year in 2021-23,” Jason Tuvey, senior emerging markets economist at London-based consultancy Capital Economics, wrote in a note before the election. But he added that its higher crude production would pressure other dynamics in the region. 
• “Higher Iranian oil output would act as a drag on global oil prices and could prompt governments in the Gulf countries to keep fiscal policy tight, weighing on their recoveries,” Tuvey said.

(Source: CNBC News)

• Preparations are in high gear to enable Jamaican producers to better meet the demands of a revived tourism industry. The Ministry of Tourism is working in tandem with the Ministry of Agriculture & Fisheries and has initiated a series of high-level meetings to finalize the requisite arrangements.
• Two crucial meetings were held at the Montego Bay Convention Centre on the weekend with representatives from the agricultural sector: One meeting involving the Jamaica Hotel and Tourist Association (JHTA), to discuss the supply chain for meat and meat cuts, and agricultural produce, and the other with the Jamaica Manufacturers and Exporters Association, exploring supply chain issues.
• The Minister of Tourism noted that the discussions were “in the vein of reimagining tourism in the wake of the COVID-19 pandemic and to drive the new production and consumption patterns that we require to enable more local Jamaicans to be connected to the tourism value chain.” This is aimed at ensuring that a larger percentage of the tourism dollar stays in Jamaica and more jobs are created.
• He expressed confidence that tourism was showing signs of recovery “…and this is why we’re moving so fast to bring the partners together because the pandemic brought tourism literally to a halt and what it meant is that we were all at point zero, and this is a good time to bring the partners together so that we build back together.”

(Source: JIS)