• Canada's factory sector contracted in December at its steepest pace since the early months of the COVID-19 pandemic, as the rising cost of manufactured goods crimped demand, data showed on Tuesday.
• The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) fell to a seasonally adjusted 45.4 in December from 47.7 in November, its lowest level since May 2020. A reading below 50 indicates contraction in the sector. The PMI has been below that threshold since May, the longest stretch in data going back to October 2010.
• "Canada's manufacturing economy endured a difficult end to 2023 and with that rounded off a challenging year for the sector overall," Paul Smith, economics director at S&P Global Market Intelligence, said in a statement. "Accelerated declines in both production and new orders were registered, amid reports that demand for manufactured goods remains subdued."
• The output index fell to 45.4 from 46.1 in November and the new orders index was at 42.5, down from 45.4. New export orders also declined more sharply, the data showed. The measure of employment moved back into contraction territory and prices rose, but the pace of price increases decelerated, which could be one potential bright spot heading into 2024.
• "Firms noted that clients remain burdened by high prices, and these continued to rise throughout the supply chain over the month, Smith said. "However, at least rates of inflation eased according to the PMI data, and given the increasingly weak demand environment, are likely to continue to fall in the months ahead."
• The input price index was at 54.1, down from 55.6 in November and the output price measure fell to 52.7 from 54.8.
• The PMI is an index of the prevailing direction of economic trends in the manufacturing and service sectors.

(Source: Reuters)

• Listed company MPC Caribbean Clean Energy, has secured financing for Phase II of its Monte Plata solar park project in the Dominican Republic. The project, already under construction, includes a 42 megawatt peak solar PV plant.
• The funding was secured from Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V (FMO), the Dutch Entrepreneurial Development Bank, and Corporación Interamericana Para El Financiamiento De Infraestructura S.A. (CIFI), a Panamanian non-banking financial entity. Monte Plata is a 36% subsidiary of CCEF ANSA Renewable Energies Holdings Limited, in which MPC holds a 50% stake.
• MPC leads an equity consortium, alongside Trinidad and Tobago-based corporate group ANSA McAL Limited (TTSE: AMCL) and two unnamed minority investors from the Dominican Republic and Canada, which has set out to acquire the plant in full.
• Monte Plata operates under a 20-year US-dollar-denominated power purchase agreement (PPA) with the state-owned Dominican Corporation of State Electrical Companies. “Over its operational lifespan, the expanded solar park is poised to mitigate the production of nearly 1.5Mn tons of CO2 during the life span of 20 years,” says Gözde Kurusoy, MPC’s director of project finance.
• The financial closure of Phase II underscores MPC Caribbean Clean Energy Fund’s commitment to the Dominican Republic, fostering economic growth, supporting the transition to a low-carbon economy, and driving positive community and social impact. Phase II of the project is expected to reach commercial operation date in the fourth quarter of 2024. The increased capacity is expected to increase revenues and generate attractive risk-adjusted returns.
• MPC Caribbean Clean Energy is a Caribbean-based investment company with a vision to boost investments into renewable energy projects in the Caribbean. The Company is investing into significant growth potential in renewable energy projects in the Caribbean region, where these energy sources are increasingly becoming an economical form of new electricity generation.

(Source: Solar industry)

• The newly formed Ghana Jamaica Chamber of Commerce [GhanJacc] says it will be providing avenues for Jamaican companies to explore how to expand to Ghana. According to Derrick Cobbinah, President of GhanJacc, there are companies in Jamaica that could provide solutions to problems in Ghana and vice versa.
• In keeping with that, he revealed in an interview with Radio Jamaica News that two "big" trade missions are being planned, one from Ghana to Jamaica and the other from Jamaica to Ghana. He highlighted there will also be monthly networking events to create awareness in terms of joining the Chamber.
• Another area of emphasis will be the market entry service, which is key as many companies out there would be looking at moving over to Ghana, or vice versa. In that regard, Mr. Cobbinah said the chamber will guide its members on how to set up shops in both countries, with a "Doing business in Ghana and Doing business in Jamaica" document being prepared to make the process less difficult. This document is expected to provide guidance, in meeting "the right distributors and the right suppliers”.

(Source: RJR News)

• Ongoing and emerging geopolitical factors are clouding the external economic policy outlook for 2024, the Central Bank of Trinidad and Tobago stated in its Monetary Policy announcement for December.
• Domestically, macroeconomic conditions appear favourable based on the retreat of inflation, sustained private sector credit growth, and robust non-energy sector activity.  However, short-term TT/US interest rate differentials remain a concern for the external balance, but could narrow further based on the projected downward path of foreign rates.
• The Central Bank stated that in reviewing external developments, the Monetary Policy Committee (MPC) took particular note of the rapid slowdown in global inflation and the less aggressive monetary stance adopted by major central banks.
• Given these factors, the MPC agreed to maintain the repo rate at 3.50%. At the same time, the MPC considered that the dynamic nature of external economic developments in 2023, their repercussions on Trinidad and Tobago's open economy, and the expected continuation of that situation in 2024 warranted continued vigilance and agility on the part of the Central Bank to potentially rapidly changing circumstances.
• The MPC also noted that the Central Bank will continue to carefully monitor and analyse international and domestic developments and prospects going forward.

(Sources: Trinidad Express Newspaper and Central Bank of Trinidad and Tobago)

• Peru's inflation closed 2023 at 3.24%, the lowest annual rate in three years, official data showed on January 1, 2024, after consumer prices rose marginally in December. The easing of inflationary pressures is a small boost for the country in the throes of an economic recession.
• The central bank had initially projected inflation in 2023 would end at 3.8% before adjusting its forecast to 3.1% last month following a string of promising inflationary indicators that saw a quicker-than-expected recovery.
• The 2023 inflation rate is the lowest rise since 2020, when prices in the mining nation rose 1.97% for the year; and also stands as one of the lowest rates in Latin America.
• The latest data brings Peru's inflation within a breath of the central bank's target range of 1% to 3%. Notably, at the start of 2023, consumer prices in Peru had risen 8.66% in the 12 months through January.
• Nonetheless, the world's second-largest copper producer is struggling with the adverse effects of the El Nino weather phenomenon, lower private investment mainly in mining, and the threat of more anti-government protests.
• The central bank has warned that the fight against inflation could be hampered by a stronger El Nino in 2024.

 (Source: Reuters)

• Investors appear convinced that major Western central banks are close to a much awaited pivot, from raising interest rates to cutting them. Markets rallied as a result, but 2024 could hold surprises as the world adjusts to an economic order where money is not cheap.
• In the United States, investors are now effectively positioned for the Federal Reserve, guiding the economy to a perfect landing, bringing down inflation without triggering a recession. The market's conviction comes after the U.S. economy surprised people with its resilience. However, many investors and executives think the probability of a perfect landing is low. The pandemic-era savings are getting depleted and storm clouds are gathering, especially with what's shaping to be contentious U.S. elections.
• Investors are betting that the Fed could cut rates by as much as 1.5% by the end of 2024, but that would still leave policy rates at close to 4%, higher than where it has been for most of the past two decades. At that level, monetary policy will still be a drag on growth, as it would be above the so-called neutral rate at which the economy neither expands nor contracts.
• Add to that, there are a host of other risks to the outlook in 2024, including two major wars, heightened geopolitical tensions that have put globalization firmly in reverse, and elections in several countries that could radically change the world order in unexpected ways. While the Fed and other banks have been raising rates for well over a year, the world is yet to complete the transition from the time when money was free to a period when it no longer is. 2024 is likely to be the year when the effects of that transition manifest more clearly.
• That means companies and, in some cases, entire countries will have to restructure their debt liabilities, as they can no longer afford to pay interest. Some of that is already visible in emerging market debt negotiations and rising bankruptcies of companies.

 (Source: Reuters)

• The U.S. federal government's total public debt has reached $34 trillion for the first time, the U.S. Treasury Department reported on Tuesday as members of Congress gear up for another series of federal funding battles in the coming weeks.
• The debt that counts toward the federal debt ceiling rose to $33.89 trillion on Friday from $33.794 trillion on Thursday. This "debt subject to limit" category excludes the unamortized discount on Treasury bills and zero coupon bonds, debt issued by the Federal Financing Bank, and guaranteed debt of certain other agencies.
• The milestone comes shortly after the federal debt topped $33 trillion in September amid rising federal deficits fueled by falling tax revenues and rising federal expenditures.
• Congress returns to Washington next week to tackle Jan. 19 and Feb. 2 deadlines for settling government spending through September, amid Republican demands to reduce fiscal 2024 discretionary spending below caps agreed in June. Lawmakers also hope to pass emergency aid for Ukraine and Israel, possibly with unrelated U.S. border security provisions attached.
• Failure to approve the one-dozen fiscal 2024 spending bills would plunge Washington agencies into shutdown mode. However, reaching a compromise could become more difficult with the November presidential and congressional elections coming quickly into focus.
• Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a fiscal watchdog group, called the $34 trillion federal debt figure "a truly depressing achievement," attributing it to political leaders' unwillingness to make difficult fiscal choices.

(Source: Reuters)

• During the third quarter of 2023, total value added at constant prices for the Jamaican economy grew by 2.1% when compared to Q3 2022. This reflected growth in both the Services and Goods Producing Industries of 2.1%.
• Improved performances were recorded for Transport, Storage & Communication (6.0%), Hotels & Restaurants (6.7%), Other Services (4.5%), Finance & Insurance Services (1.5%), Electricity & Water Supply (6.7%), Real Estate, Renting & Business Activities (0.9%) and Wholesale & Retail Trade; Repairs: Installation of Machinery & Equipment (0.3%). However, the Services Industry’s outturn was tempered by a decline in Producers of Government Services, which was down by 0.9%.
• Within the Goods Producing Industries, there was higher output levels in Mining & Quarrying (103.1%), Manufacturing (2.1%), and Construction (0.7%). However, the Agriculture, Forestry & Fishing industry continued to be impacted by dry conditions during most of that quarter, which result in a 9.3% decline in its value added.
• Total value added at constant prices grew by 1.2% compared to the second quarter of 2023. This was also impacted by the performance of both the Services and Goods Producing Industries. The Services Industries grew by 0.7% and the Goods Producing Industries by 2.6%.
• The 2.1% growth over the quarter was 0.2% higher than the Planning Institute of Jamaica’s (PIOJ) estimate of real value added of 1.9%, released a few weeks ago. Furthermore, PIOJ noted that the performance of the local economy is expected to be generally positive for the October to December quarter, with key sectors, including tourism, leading the outturn.
• For October to December 2023, the economy is projected to grow within the range of 1.0% to 2.0%, resulting in calendar year growth (January to December 2023) within the range of 2.0% to 3.0%. For Fiscal Year 2023/24, the projection is for growth within the range of 1.0% to 2.0%.

 (Sources: STATIN & PIOJ)

• Prime Minister Andrew Holness has announced an extension of the toll-free period for the May Pen to Williamsfield leg (Phase 1C) of the East-West Highway, now through March 31, 2024. This extension grants the public an additional three months of toll-free travel on this new segment of the highway.
• This decision is intended to provide more time for ongoing negotiations between TransJamaican Highway Limited (TJH) and the National Road Operating and Constructing Company Limited (NROCC). These discussions focus on finalising the concession for Phase 1C, for which TJH, the current operator of the Kingston to May Pen segment of the East-West Highway, holds a right of first refusal.
• Prime Minister Holness highlighted the significant benefits of the May Pen to Williamsfield Highway, noting the reduced travel times and lower vehicular wear and tear for motorists. Looking ahead, the Government plans to further extend the highway to bypass Spur Tree within the next five years, continuing its commitment to improving Jamaica’s road infrastructure.
• As these developments progress, Prime Minister Holness emphasized the importance of responsible driving and urged all motorists to prioritize safety on the roads.

(Source: JIS)

• Venezuelan President Nicolas Maduro last Thursday said that the deployment of a British warship to waters off the coast of Guyana breaches the "spirit" of an agreement reached between Venezuelan and Guyanese authorities.
• In a statement, Venezuela's Foreign Ministry said the country "reserves all actions, within the framework of the Constitution and International Law, to defend its maritime and territorial integrity."
• Since this, Brazil expressed concern, noting that "The Brazilian government believes that military demonstrations of support for any party must be avoided, so that the ongoing dialogue process can produce results". It urged all parties to "contain themselves" and resume talks.
• That said, Vice President Dr Bharrat Jagdeo highlighted that Guyana has no plans to take any offensive action against Venezuela and that the British Warship visiting the country has been long planned and is part of building a defensive capability in Guyana. 
• Neighbours Venezuela and Guyana agreed earlier this month to avoid using force or increasing tensions in their long-running dispute border dispute over the Esequibo territory.

(Source: Reuters)