• In the budget debate yesterday, the Prime Minister warned that the country can expect six more years of fiscal medicine before the economy can recover fully, less than six months into an International Monetary Fund austerity programme.
• The bread-and-butter tourism industry has been slapped with increases in room rate levies which is expected to generate government revenues of $15Mn. There was also an increase in VAT on accommodation from 7.5% to 10%, which is expected to generate $27Mn in revenues.
• Changes to property tax are also expected to generate revenues of $61.9Mn and there was an introduction of gaming tax; 20% tax on winnings and 17.5% on all gaming establishments.
• On a more positive note, however, Prime Minister Mottley has noted that Barbadians will be able to open foreign currency bank accounts in Barbados from July as the administration begins to loosen nearly five decades of foreign exchange controls.
• Prime Minister Mottley reported that the NIR has risen from just over $400Mn as of early 2018 to $1.1Bn as of March 20, 2019.

 (Source: Barbados Today)

• Fitch Solutions maintains its expectation that the Central Bank of Trinidad & Tobago (CBTT) will likely devalue the Trinidad & Tobago Dollar (TTD) in late 2019 in response to capital outflows and hard currency shortages.
• Accordingly, Fitch expects the TTD to average TTD$7.50/USD in 2019, down from its current spot of TTD6.78/USD.
• There are substantial upside risks to Fitch’s forecast as the CBTT has proven committed to using the managed peg to combat pass-through and wage inflation.

 (Source: Fitch)

• The Fed went beyond the market’s most dovish hopes, signaling it will extend a pause on rates through the year, and increasing the odds its next move will be a cut.
• The initial reaction in stocks was to rally, but that faded before the end of the session as investors digested the implications of the decision: If policymakers are this worried about the outlook for growth, then maybe traders should be too.
• It was a different story in the bond market, as Treasury yields fell, and bond prices across the world rose.

 (Source: Bloomberg)

• The Federal Reserve appears to be taking a more dovish approach to the markets, but Victoria Fernandez suggests it’s not enough to keep the markets stabilized.
• As long as geopolitical risks dominate the headlines, the chief market strategist at Crossmark Global Investments contends they’ll exacerbate global slowdown fears which could undermine 2019′s historic rally.
• “The two biggest concerns on that list are going to be Brexit and the U.S.-China trade relations,” said Fernandez.
• Despite her view that stocks are vulnerable to a pullback, she largely believes the U.S. economy is strong enough to withstand these obstacles — including one more Fed interest rate hike. However, it looks like another move higher is off the table this year, since the Fed announced plans to keep rates unchanged.

 (Source: CNBC)

• Fitch predicts that Jamaica will continue to run budgetary surpluses in the coming years, with a broad political consensus supporting fiscal consolidation measures.
• Expectations are that the 2019/20 Budget, which includes modest increases to social and security spending and tax cuts for small businesses, will pass in the coming weeks. 
• With Jamaica running annual surpluses, Fitch Solutions forecast total government debt to fall to 87.3% of GDP in 2021, from 115.8% in 2017.

(Source: Fitch)

• LASCO Manufacturing Limited (LASM) recently completed the construction of a 65,000-square-foot warehouse at its White Marl complex at an approximate cost of US$5.2Mn.
• The commissioning of the warehouse has led to the streamlining and simplification of internal logistics operations, eliminated the need for external storage and costly double handling, and is already generating significant efficiencies and cost reductions, according to the company.
• LASCO is also in the process of expanding its dry products manufacturing plant by 12,000 square feet. Completion is slated for May 2019. The expected US$1.7Mn expansion aims to streamline additional manufacturing processes and significantly reduce costs.
• Combined, these initiatives are expected to increase the company’s productive capacity and reduce costs, which will bode well for its bottom line in coming quarters.

(Source: JSE

• Trinidad &Tobago, Aruba, Bermuda, Belize, Dominica, Barbados, and US Virgin Islands featured on the European Union’s latest blacklist for tax abuse and unfair tax competition globally.
• In terms of consequences, EU Member States have agreed on a set of countermeasures, which they can choose to apply against the listed countries, including increased monitoring and audits, withholding taxes, special documentation requirements, and anti-abuse provisions.
• In addition, new provisions in EU legislation prohibit EU funds from being channeled or transited through entities in countries on the tax blacklist.

 (Source: European Commission)

• Fitch Solutions forecast that Trinidad and Tobago’s (T&T) current account surplus will widen in 2019 due to an expanded traded goods surplus.
• Growing liquefied natural gas production will bolster export growth over the coming quarters.
• However, the view that T&T’s overall external position will remain under significant pressure is unchanged, with capital outflows forcing the Central Bank of Trinidad and Tobago (CBTT) to further draw down reserves.

(Source: Fitch)

• The world economy may be the rockiest it’s been since the financial crisis, yet there are reasons to expect the current slowdown will prove short-lived.
• Bloomberg Economics, Deutsche Bank AG and Morgan Stanley are among those whose economists reckon the slide will bottom out in this quarter or next before acceleration later in the year.
• The International Monetary Fund is still predicting global growth of 3.5% in 2019, a pretty good clip for this stage of the expansion.
• Deutsche Bank strategist Alan Ruskin also argues there is a reason to be more upbeat than the headlines suggest. China’s economy, for example, is five times its size in 2000, meaning a 6% growth rate now is equivalent to 30% back then.

(Source: Bloomberg)

• A meeting between President Donald Trump and President Xi Jinping to sign an agreement to end their trade war won’t occur this month and is more likely to happen in April at the earliest, three people familiar with the matter said.
• Despite claims of progress in talks by both sides, a hoped-for summit at Trump’s Mar-a-Lago resort will now take place at the end of April if it happens at all, according to one of the sources.
• “China is pressing for a formal state visit rather than a lower-key appearance just to sign a trade deal,” said the source.
• Trump acknowledged concerns in Beijing about the possibility of him walking away from a trade deal, offering to push back a summit with Xi until a final deal is reached.

(Source: Bloomberg)