The biggest threat to President Donald Trump’s hopes for low gasoline prices is his growing entanglement in the politics of OPEC nations.
The White House plans to choke off oil exports from Iran without triggering a spike in prices largely by getting Saudi Arabia, the only OPEC member with significant spare capacity, to make up the shortfall.
Yet his parallel interventions in Venezuela and, more recently, Libya could test the kingdom’s ability to deal with further disruptions.
Crude prices have already climbed almost 40% this year, hitting $75 a barrel in London this week for the first time in six months. If reserve output is exhausted by multiple supply crises, it could surge to levels that hurt the global economy.
The Executive Board of the International Monetary Fund (IMF) completed the fifth review of Jamaica’s performance under the Stand-by-Arrangement (SBA) on April 22, 2019.
The Jamaican authorities continue to view the SBA as precautionary and will use it as an insurance policy against unforeseen external economic shocks that could lead to a balance of payments need.
Reduction in the primary surplus target by ½% GDP to 6½% in the FY19/20 budget will facilitate higher spending in social assistance, citizen security, and infrastructure.
Reducing the highly distortive financial turnover taxes is expected to lower the cost of doing business and increase economic activity. Tackling governance issues swiftly and forcefully is necessary to enhance transparency and accountability, bolster trust in public institutions, and protect public funds.
Micro, Small and Medium Enterprises (MSMEs) are being encouraged to explore the possibility of raising funding through capital market options, such as the Jamaica Stock Exchange (JSE).
Entities are encouraged to have a plan and the goal to be a listed company.
Street-Forrest, speaking at the Small Business Association of Jamaica’s (SBAJ) second regional MSME Conference, noted that despite foreign exchange rate fluctuations, “we have very favourable market conditions, with business and consumer confidence high, a low rate of inflation and oversubscription in all of our Initial Public Offerings (IPOs), which signal an interest in the stock market.”
These factors are good for business, and the JSE believes that the MSMEs should now become engaged.
It is expected that Barbados’ economic recovery will remain muted as its government pursues debt restructuring and fiscal consolidation as part of an IMF-sponsored programme.
Over the longer term, the successful implementation of IMF-backed reforms should boost productivity and growth and lower debt-servicing costs.
Nevertheless, Fitch notes downside risks to both economic growth and the IMF programme as negotiations with external creditors could break down and a ‘No Deal’ Brexit could damage tourism.
According to Fitch, the impact of US sanctions on Cuba will combine with long-standing structural economic deficiencies to push the country into recession in 2019.
The Partido Comunista de Cuba (PCC) government will pursue a number of strategies to support growth, but these will likely only have a modest impact.
Fitch forecasts -2.2% real GDP growth in Cuba in 2019, down from an estimated 1.1% in 2018. Given the lack of up-to-date economic data, there is a relatively large degree of uncertainty surrounding the forecasts for 2019 and the coming years.
Oil is adding to yesterday’s gains, with a barrel of West Texas Intermediate for June delivery trading above $66 this morning while Brent crude was also higher.
The move comes in the wake of the Trump administration’s decision to end waivers on the ban of Iranian oil exports in an attempt to increase pressure on the Tehran regime.
For oil traders, it’s a cue to reprise levels hit when Iranian sanctions were first introduced.
Some Federal Reserve policymakers seem resigned to running a heightened risk of asset bubbles and other financial excesses as they seek to keep the economic expansion going.
That’s one of the messages tucked inside the minutes of the Federal Open Market Committee’s March 19-20 policy-making meeting.
“A few participants observed that the appropriate path for policy, insofar as it implied lower interest rates for longer periods of time, could lead to greater financial stability risks,’’ according to the minutes, published April 10.
The last two expansions ended not in a burst of inflation, but in financial froth, first a dot-com stock market boom, then a housing bubble.
The 2018/19 Winter Tourist Season has emerged as Jamaica’s most successful based on earnings and visitor arrivals, as highlighted by Tourism Minister, Hon. Edmund Bartlett.
He noted that over the last three months of the season, which commenced on December 15, the industry welcomed nearly 800,000 stopover visitors while generating more than $1Bn in earnings.
Bartlett added that 121,000 persons directly employed in the sector, and another 375 who work indirectly, benefited from this out-turn.
Jamaica’s unemployment rate declined to 8.0% in January 2019, relative to the 9.6% recorded in January 2018. This improvement in the unemployment rate occurred in spite of the 1.2% reduction in the number of persons classified as being ‘Outside the Labour Force’.
There was a 2.4% increase in the number of participants classified in the ‘employed labor force’, and the number of female entrants (3.5%) more than doubled the number of males (1.4%) joining the labor force.
Furthermore, the unemployment rate for youth (14-24 years) declined to 21.8% in January 2019 compared to 23.7% in January 2018.
STATIN’s survey indicates that at end-January 2019, there were 1,340,200 persons in the Labour Force, an increase of 8,400 (0.71%) when compared to 1,331,800 registered in January 2018.
Van Selm, the person leading the IMF mission to Barbados, commented on the recent tax measures imposed on the tourism sector, telling Barbados TODAY he agreed with Government that they were necessary.
In addition to a range of levies on hotel room rates depending on the accommodation type, and a subsequent increase in those rates, the hotel sector is in line to pay an increase in Value Added Tax (VAT) from 7.5% to 10%, as of January next year.
As a result of the four-year, US$290 million IMF-funded programme, travelers leaving Barbados on international trips have also been slapped with a new US$70 departure tax, while those traveling regionally pay US$35.
Van Selm noted that a country should not have its main industry “contributing next to nothing to tax credit”.
