• An International Monetary Fund (IMF) staff team led by Uma Ramakrishnan visited Kingston from June 10 to 14, 2019, ahead of the sixth and final review under the SBA planned for September 2019. At the end of the visit, Ramakrishnan issued the following statement:
• “Jamaica’s improved economic growth in FY2018/19 was buoyed by construction and mining. Unemployment is now at an all-time low of 8%, inflation outturn was 3.9% YoY in April, closer to BOJ’s target range. The primary surplus was almost 7½ % of GDP in FY2018/19, and public debt fell to 95% of GDP at end-March 2019. Non-borrowed reserves were US$430Mn above target at end-March 2019, providing a critical buffer against unforeseen global economic shocks.”
• “The IMF welcomes the recent BOJ’s accommodative policies aimed at restoring inflation to the target range. The reduction in the Cash Reserve Requirement by 5 ppts this year and the successive policy rate cuts to 0.75% should support private credit expansion as the government continues to deleverage”.

(Source: IMF)

• St. Lucia will see moderate real GDP growth in the coming quarters as tourism and related services drive economic activity.
• However, it is expected that tourism growth will slow in the coming years which, combined with the economy’s vulnerability to natural disasters, will curb St. Lucia's long-term growth potential.
• Fitch revised its 2019 real GDP growth forecast to 3.0% YoY, from 2.9% previously, and its 2020 forecast to 3.0%, from 3.2%, as a weaker global growth environment constrains demand for St. Lucian service exports in the longer term. 

(Source: Fitch)       

• Fitch Solutions forecast Panama's real GDP to grow at the fastest pace in the region at 4.8% in 2019 and 4.7% in 2020. Strong construction activity and increased use of the expanded canal will be key growth drivers.
• Growth is expected to remain below the pace seen over the last decade as global trade tensions and a strong dollar weigh on trade flows and canal activity.
• A further worsening of trade relations between the US and China, or the US and other major trade partners, could severely undermine government revenues, which are supported by Panama Canal transit fees.
• Over the long term, an increasingly close economic relationship with China could pose upside risks to Fitch’s growth outlook as stronger trade relations boost export volumes and investment helps to drive the expansion of the construction sector.

 (Source: Fitch)

• Europe isn’t wasting much time expanding its global trading relationships while President Donald Trump shreds the U.S. playbook on multilateralism and tries elsewhere to overhaul the rules of international commerce.
• As Trump charted his “America First’’ political course in 2016, the European Union restarted negotiations with the Mercosur group of countries including Argentina, Brazil, Paraguay, and Uruguay.
• Those talks may be close to becoming the EU’s next big deal in the Trump era, with two-way trade in goods valued at 85 billion euros ($96 billion).
• Chief negotiators from the two regions are holding technical discussions this week in Brussels, and if successful, will lead to a political meeting next week to iron out final details.

 (Source: Bloomberg)

• Members and organizations in the diaspora are being encouraged to support the newly established Jamaica Social Stock Exchange (JSSE).
• An initiative of the Jamaica Stock Exchange (JSE), the JSSE, which was launched in January by Prime Minister, the Most Hon. Andrew Holness, is designed to facilitate funding, through donations, for the activities of entities involved in social programme delivery to the society’s most vulnerable and marginalised citizens.
• Addressing delegates during the Eighth Biennial Jamaica Diaspora Conference earlier this week, Foreign Affairs and Foreign Trade Minister, Senator the Hon. Kamina Johnson Smith, described the JSSE as an “exciting concept” and “expansion of what many of you [in the Diaspora] are already doing… making investments in Jamaica”.
• Noting that the dividends are not only monetary but also social, Senator Johnson Smith expressed the hope that diaspora donors and investors can be matched with the social business enterprise projects of the organizations already approved for funding under the JSSE.

 (Source: JIS)

• Grenada will continue to enjoy steady growth over the coming years, driven by the tourism and education sectors.
• Analysts at Fitch Solutions, expect real GDP to expand by 3.5% in 2019, after averaging 5.5% y-o-y growth from 2014-2018, as the overall global economy slows.
• Risks to the forecast are weighted to the downside as Grenada’s economy is heavily exposed to natural disasters or a slowdown in the global economy.

 (Source: Fitch)

• Guyana will see a competitive general election in 2019 after a Caribbean Court of Justice (CCJ) ruling upheld the December 2018 no-confidence vote against President David Granger’s A Partnership for National Unity (APNU) government.
• Fitch Solutions expect the opposition People’s Progressive Party/Civic (PPP) is most likely to regain control of the government in the next election; however, we cannot rule out the possibility that Guyanese voters re-elect Granger.
• Political risks will remain high in the coming months given sectarian tensions between the Indo-Guyanese and Afro-Guyanese communities and the likelihood of a close election.

 (Source: Fitch)

• The fed funds futures market is now pointing to a 100% chance of an easing of monetary policy next month.
• The market is also pointing to a 64% chance of one rate cut in the 2% to 2.25% range and a 36% probability of two cuts, according to the Chicago Mercantile Exchange (CME) Fed Warch tool.
• The tool is based on futures pricing from live markets and reflects the views of traders placing real bets on the CME exchange.
• The Fed decided to keep the benchmark rate in a target range of 2.25% to 2.5% on Wednesday. However, Fed chair, Jerome Powell said the case for a more accommodative policy has strengthened and added that policymakers are concerned about some of the recent economic developments.
• The Fed also dropped the word “patient” from its statement.

 (Source: CNBC News)

• Oil rose after Iran said it shot down a U.S. spy drone in its airspace, stoking Middle East tensions further after the attack on two tankers last week, while a more dovish stance from the Federal Reserve lifted financial markets.
• Futures climbed as much as 3.3% in New York.
• The reported drone drowning follows a missile strike by Yemeni rebels overnight on Saudi Arabia.
• The Fed’s readiness to lower interest rates for the first time since 2008 boosted stock markets and weakened the dollar, spurring demand for commodities priced in the U.S. currency.
• Oil also gained after U.S. government data showed inventories declined by 3.1 million barrels last week, more than analysts had estimated.

(Source: Bloomberg

• 1834 Investments Limited’s profit took a nose dive for the year ended March 31, 2019. Net Profit ended the year at $5.54Mn (EPS: $0.46) down from $81.93Mn (EPS: $6.76) a year earlier, a decline of 93.2%.
• Revenues decreased by 38.6% to $27.87Mn, whilst other income plummeted 76.5% and together, were the main contributors to the group’s performance.
• The stock has fallen 7.8% since the start of the calendar year. 1834 Investments closed yesterday’s trading session at $1.07 and currently trades at a P/E of 2.33x earnings which is below the Main Market average of 20.35x.

 (Source: 1834 Investments Financials)