• According to Fitch, Jamaica’s current account deficit will widen to 5.8% of GDP in 2020, from an estimated 2.5% of GDP in 2019, as the coronavirus pandemic disrupts the country’s main export activities.
• Historically, large remittance inflows have produced sizeable secondary income surpluses, which, in turn, have helped contain Jamaica’s overall current account deficits. However, as the US economy enters a recession in 2020, it will cause a significant spike in unemployment, weighing on household incomes of Jamaican-Americans and reducing the funds they are able to send back to Jamaica.
• However, steady foreign direct investment inflows and sizeable international reserves will reinforce Jamaica’s external account stability. According to Fitch durable FDI inflows—which are less prone to volatility than other investments—is expected to support Jamaica’s external financing needs over the coming quarters.
• While FDI inflows will likely slow in the coming quarters as both sectors contract, Jamaica’s international reserves, which were USD3.2bn in March 2020, equivalent to 4.8 months of imports, will offer moderate support in the event of a short-term imbalance in its external accounts.

(Source: Fitch Solutions)

• The International Monetary Fund (IMF) has approved $508 million in emergency financing for Costa Rica to respond to the coronavirus pandemic, Costa Rica's central bank said on Wednesday.
• The five-year loan, granted through the IMF's Rapid Financing Instrument (RFI), carries a spread of 150 basis points over the IMF's special drawing rights (SDRs), equal to an interest rate of 1.55% per year.
• Costa Rica requested the loan when an IMF delegation visited the country on April 16-17.
• The IMF also approved the disbursement of $65.6 million in emergency financing for Dominica, Grenada and Saint Lucia to help cover balance of payment needs during the coronavirus pandemic.

(Source: Latin Finance)

• IDB Invest, part of the Inter-American Development Bank (IDB), said on Tuesday that it made available another $2 billion to address the coronavirus pandemic in Latin America and the Caribbean.
• The multilateral lender can now supply up to $7 billion in financing to support companies affected by the COVID-19 outbreak, including an additional $500 million in long-term loans and $1.5 billion in trade finance, it said in a press release.
• IDB Invest and the Mexican business council CMN announced a program to lend up to $12 billion a year to small businesses to cope with the coronavirus pandemic. Before that, IDB Invest printed $1 billion in two-year bonds in its largest debt sale ever to fund part of its response to COVID-19.

(Source: Latin Finance)

• First-time filings for unemployment insurance hit 3.84 million last week as the wave of economic pain continues, though the worst appears to be in the past, according to Labor Department figures Thursday.
• Jobless claims for the week ended April 25 came in at the lowest level since March 21 but bring the rolling six-week total to 30.3 million as part of the worst employment crisis in U.S. history. Claims hit a record 6.87 million for the week of March 28 and have declined each week since then.
• The surge in unemployment has come amid efforts to contain the coronavirus spread. While some states and municipalities have begun bringing their respective economies back online, much of the key U.S. infrastructure remains on lockdown.

(Source: CNBC)

• The Federal Reserve painted a dour picture of current conditions and pledged Wednesday to continue its historically aggressive policy stance until it is comfortable that the U.S. economy is back on its feet.
• Following this week’s Federal Open Market Committee meeting, the central bank said it would maintain its current interest rate target between 0% and 0.25%.

(Source: CNBC)

• Details about this filing are limited at this time.

 (Source: Bloomberg)

• Over the past three weeks some $50 million has been allocated to redistributing excess crops and fresh produce held by farmers in the wake of the COVID-19 outbreak in Jamaica and the consequent fall out of demand from the tourism and other markets.
• The Ministry of Industry, Commerce, Agriculture Fisheries through its agency, the Rural Agricultural Development Authority working with purveyors in the private sector have been executing the redistribution of fresh produce from areas of glut to consumers under the Government of Jamaica’s $240 million stimulus programme for the agricultural sector.
• In addition to the redistribution programme, the Ministry has established other channels to ensure continued production in the sector, with $100 million allocated to drought mitigation, and $300 million for the Production Incentive Programme.

(Source: JIS)

• For the year ended December 31, 2019, iCreate Ltd. reported a net loss of $45.95Mn (EPS: -$0.24), which is a 209.5% (or $31.10Mn) increase when compared to the $14.84Mn (EPS: -$0.08) loss that was made one year prior.
• This outturn was primarily driven by a 66.4% (or $21.98Mn) increase in total expense and a 518.8% (or $10.87Mn) increase in finance costs, which was outstripped the 44.9% (or $14.31Mn) increase in revenue.
• The company’s stock price has fallen 30.0% since the beginning of the year to end Thursday’s trading session at $0.49.

 (Source: iCreate Financials)

• Puerto Rico will fall into a significant recession in Fiscal Year 2020 (FY20; July 2019-June 2020), as the global Covid-19 pandemic, and measures to contain it locally, hit commerce, investment and exports.
• We forecast a contraction of 4.0% y-o-y in FY20, noting that fiscal stimulus from the local and federal governments will provide a floor to growth. We expect 2.9% growth in FY21.
• We maintain our downbeat long term outlook on economic activity in the territory, though we note that debt renegotiations, currently on hold, are a pivot point for Puerto Rico’s growth trajectory.

(Source: Fitch)

• Guatemala’s current account will flip from a surplus of 2.2% of GDP in 2019 to a deficit of 0.2% in 2020 as a large recession in the US undermines remittance inflows and demand for Guatemalan exports.
• As a result, we at Fitch Solutions have revised down our 2020 current account forecast from a 1.5% surplus to a 0.2% deficit.
• While steeper than expected recession in the US poses downside risks to our forecast, sizeable foreign reserves bolster Guatemala’s overall account stability.

(Source: Fitch)