Panamanian President-elect Laurentino Cortizo will govern with a relatively weak mandate after narrowly defeating Rómulo Roux in an unexpectedly close May 5th election.
Fitch expects Panama's policy direction to remain relatively unchanged under Cortizo, with his administration continuing orthodox, pro-business economic policies.
Cortizo’s coalition’s narrow majority in the unicameral National Assembly will likely allow him to advance legislation, though a crop of new, anti-establishment legislators could complicate policymaking.
Fitch expects Honduras to continue its steady fiscal consolidation as revenues are supported by strong economic activity and expenditure growth remains muted.
Honduras’ stand-by IMF program will provide the government with additional flexibility to pursue fiscal consolidation.
Fitch has revised its fiscal deficit forecast from 2.3% of GDP to 2.0% after the 2018 deficit was narrower than expected at 2.1%.
President Donald Trump said that he feels talks with China “are going to be very successful” as he confirmed he will meet President Xi Jinping at next month’s G-20 summit.
His comments came after the U.S. Trade Representative’s office released the list of $300Bn of Chinese goods that are next in line for a 25% tariff while Beijing announced its own trade measures.
Trump may be coming under pressure from inside the Republican party as the standoff is increasing pain for American farmers, among the president’s most loyal supporters.
Markets are recovering some of the worst of yesterday’s sell-off as hopes of a deal linger.
U.S Secretary of State Michael Pompeo received a cool response from European Union allies at a meeting in Brussels where he tried to persuade leaders in the region to take a harder line towards Iran.
EU foreign policy chief Federica Mogherini called for “maximum restraint from all sides.”
Trump warned that Iran will “suffer greatly” if it does anything that leads to an outbreak of hostilities with the U.S.
Between geopolitical tensions and the trade war, the oil market is getting pulled in different directions, with the May 13 drone attack on Saudia Arabian pump stations being the latest force sending oil prices higher.
Head of the European Union (EU) Delegation to Jamaica, Ambassador Malgorzata Wasilewska, says the continued budgetary support provided to Jamaica is a signal of trust in the country’s economic progress.
“Budget support is a particular modality that a country has to qualify for, and it is not granted to everybody because it has to be based on sound financial management, transparency, accountability reporting and so on,” she noted.
“So first of all, that is a sign of trust and progress that Jamaica has made over the years. With the success of the International Monetary Fund (IMF) programme, I would like to take the opportunity to congratulate the Administration and the people of Jamaica for the progress it has made in that area,” Ambassador Wasilewska added.
GraceKennedy’s profits contracted moderately for the first quarter of 2019. The company reported an unaudited net profit of $1.02Bn (EPS: $0.90) down 22.6% from the $1.3Bn (EPS: $1.20) reported in the corresponding period of 2018.
The deterioration in performance comes on the back of a decline in other income (down 57.2%) coupled with an increase (up 60%) in interest expense and operating expenses (up 3.6%).
The stock has fallen 3.51% since the start of the calendar year. GK closed yesterday’ s trading session at $61.27 and currently trades at a P/E of 12.90x earnings which is below the Main Market Distribution and Manufacturing average of 18.50x.
The forecast is for rising economic activity to strengthen the fiscal position of Latin America’s largest markets over the coming quarters.
Across most of the region, higher revenue collection from private consumption-led growth will outweigh modest spending increases.
Risks to the fiscal outlook are weighted to the downside, given the possibility for trade tensions to dampen growth in the region and political pressures to undercut commitments to fiscal prudence.
Costa Rica will see modest economic activity growth in quarters ahead as fiscal reforms constrain private and government consumption.
Exports and investment will rebound from lackluster growth in 2018, as a weaker currency supports export competitiveness and the Costa Rican government prioritizes infrastructure development.
Fitch has revised down its 2019 real GDP growth forecast to 2.9% YoY, from 3.0% previously, to reflect a slightly weaker outlook for private consumption. Its 2020 forecast of 3.0% is unchanged.
As promised, President Donald Trump boosted tariffs on $200 billion of Chinese imports to 25% overnight as the White House seeks to extract trade concessions in the current round of talks in Washington.
Observers of those negotiations, which continue today, said that they are not hopeful of any meaningful breakthrough.
One industry group is warning that the higher tariffs could cost 400,000 manufacturing jobs while also putting further pressure on American farmers.
Goldman Sachs Group Inc. said there’s a 30% chance that $300 billion of Chinese goods not yet targeted could have duties imposed on them.
China said it will be forced to retaliate to the new tariffs, though the government didn’t immediately specify how.
The first step was to bolster the local stock market, where the tariff escalation was met with a strong rally. The Shanghai Composite Index ended the session 3.1% higher after buying by state funds.
Other options open to the country include a devaluation of the yuan, halting purchases of U.S. soybeans, and the nuclear option: Dumping Treasuries.
