• According to Fitch, natural gas production growth will be the engine of Trinidad & Tobago’s (T&T) modest economic expansion in the coming quarters, as non-energy sector growth will remain anemic due to an undersupply of hard currency.

• Uncertainty in Venezuela and continued capital outflows pose downside risks that will threaten growth in the medium term.

• Fitch has downwardly revised their real GDP growth forecasts to 1.9% in 2018, from 2.5% previously, and 1.9% in 2019, from 3.0%, due to signs of weak consumption and investment.

(Source: Fitch)

• Republic Financial Holdings Ltd (RFHL) recently declared that the banking group’s profit attributable for the quarter ending December 31, 2018, increased by $10.5 million or 3.1 percent, compared to the corresponding period of the previous financial year.

• In a news release announcing the bank’s unaudited financial results for its first quarter of the 2019 financial year, RFHL chairman Ronald Harford said the group recorded $350.5 million in profits attributable to shareholders.

• Harford said that, as at December 31, 2018, RFHL’s total assets stood at $72.5 billion, an increase of 3.6 percent over the total assets at December 2017 and 2.9 percent over September 2018.

(Source: Trinidad Express)

• The British economy is at risk of stalling after the dominant services sector barely grew in January, with IHS Markit’s gauge for the industry falling to 50.1.

• Companies said they were less likely to start new projects and that clients were being cautious as Brexit uncertainty continues to fester.

• In the euro area, composite PMI was revised higher to 51 from an initial reading of 50.7, with IHS saying the survey still signals “only weak growth in business activity.”

(Source: Bloomberg)

• Donald Trump’s State of the Union address to Congress later today promises to be the most dramatic in years, with the president hinting that he may declare a national emergency to secure funding for a border wall.

• Democrats have selected recent Georgia gubernatorial candidate Stacey Abrams to deliver the party’s response.

• While the wall and shutdown issues are likely to dominate proceedings, Trump may also make proposals on drug prices and announce details for upcoming summits with Chinese and North Korean leaders.

(Source: Bloomberg)

• Jamaica’s long-term foreign and local currency rating was upgraded to B+, with a stable outlook,  on large primary surpluses that have cut the debt-to-GDP ratio, Fitch said in a statement.

• Jamaica primary surplus one of the largest of any sovereign rated by Fitch at 7% of GDP in FY2018; primary surplus has been above 7% since FY 2013. Strong growth in global consumption tax has driven growth in revenues as spending on infrastructure increased

• The debt burden is on a downward path but still compares unfavorably to the current ’B’ median of 60.7% of GDP. The fiscal stance is being guided by a fiscal rule that aims to reduce debt to 60% of GDP by FY2025.

• Economic growth to accelerate to 2% in 2019 and 2020 from 1.8% in 2018. Growth is low relative to B-rated peers but has picked up on construction, road infrastructure, rising tourist arrivals and reopening of an alumina refinery

(Source: Bloomberg)

• The OPEC Fund for International Development (OFID) said it has granted a $25m loan for a water project in Cuba.

• The Cuban government will use the money to fund part of the second phase of water supply and sewage treatment project in Las Tunas province.

• OFID has supplied more than $253m in financing for water, agriculture and energy projects in Cuba since 2002.

• The fund recently approved a $50m loan to cover 25% of the project's costs for a $200m water supply project in Argentina.

(Source: Latin Finance)

• Fitch expects the Dominican Republic to remain one of the Caribbean’s fastest-growing economies over the next decade.

• The country's tourism and manufacturing sectors will be major growth drivers, attracting significant foreign direct investment.

• However, the country’s economy will remain closely tied to that of the United States, despite recent attempts to diversify its trading partners, exposing it to external economic shocks.

(Source:  Fitch)

• While both the U.S. and China cited progress at the high-level trade talks in Washington, they stopped short of announcing a breakthrough that would end the conflict.

• They agreed to strengthen cooperation on technology transfers and intellectual property rights, while China said it would buy more U.S. goods. 

• Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer will visit the Beijing in mid-February to hold the next round of talks ahead of the March 1 deadline for avoiding further tariffs.

(Source: Bloomberg)

• Fitch expects that China will experience slowly growing pressures in terms of social stability over the coming years, driven in part by weakening growth and rising income inequality, a trend that is expected to become increasingly entrenched as the economy slows.

• A challenging job market outlook, combined with several politically sensitive anniversaries in 2019, could see small pockets of social protests emerge.

• Fitch expects Beijing, which has signaled that it will exercise even greater control over traditional and social media, will be able to contain any social unrest, even if the frequency and scale of demonstrations increase relative to less politically sensitive years.

(Source: Fitch)

On January 31^st, 2019 Fitch Rating agency upgraded Jamaica’s credit rating from B to B+ with a stable outlook

Fitch attributed the upgrade of Jamaica's Issuer Default Ratings (IDRs) to the country’s track record of large primary surpluses that have cut general government debt/GDP significantly. Jamaica has run one of the largest primary surpluses of any sovereign rated by Fitch at about 7% of GDP in 2018. The primary surplus has been above 7% since 2013, reducing general government debt/GDP to a projected 96.4% in FY 2018 from a peak of 135.3% in FY 2012. 

The debt burden is on a downward path but still compares unfavorably to the current ‘B’ median of 60.7% of GDP. The fiscal stance is being guided by a fiscal rule that aims to reduce debt to 60% of GDP by 2025. Fitch also expects current fiscal policy settings to lead to a sustained fall in debt/GDP.   Fitch’s debt dynamics model assumes rising interest rates in the U.S., medium-term growth of 2% and a narrowing of the primary surplus to 5.5% of GDP by FY 2027; under these assumptions debt is expected to fall under 60% of GDP by FY 2027.

Some key drivers of the rating upgrade include projections that government surplus as a percentage of GDP will improve, the decline in government interest burden, cross-party support for the economic reforms that began with the IMF and the BOJ bill that aims to make the central bank independent with inflation targeting the explicit goal of monetary policy.