• Jamaica’s trade deficit fell slightly to US$2.23Bn for the January to May 2024 period, down 1.3% relative to the same period in 2024. The decline reflects a falloff in expenditure on imports despite a decline in the value of exports.
• Jamaica's imports declined to US$3.05Bn for the period, down 2.4% year on year and was largely due to a reduction in imports of “Raw Materials/Intermediate Goods” and “Fuels and Lubricant”, which fell by 13.5% and 8.2%, respectively.
• The declines in “Fuels and Lubricant” and “Raw Materials/Intermediate Goods” could be attributed to reduced imports of crude oil, which decreased by 10.1%, and construction materials, which fell by 20.3%, due to lower imports of iron and steel for construction, along with non-metallic mineral manufactures.
• However, a 57.7% decline in the re-export of “Mineral Fuels” resulted in revenues from exports falling by 5.4% to $823.9Mn.
• From January to May 2024, Jamaica's primary import source markets were the USA (38.9%), China (8.8%), Japan (4.1%), Brazil (3.7%), and Trinidad and Tobago (3.2%). Import spending on goods from these nations dropped by 10.4% to US$1.79Mn, mainly due to a significant reduction in "Mineral Fuels" from the USA and Brazil.
• On the export side, the USA (40.2%), Iceland (9.6%), Russia (7.6%), Canada (5.9%), and Netherlands (5.0%) were the top five markets for Jamaican exports. Despite the falloff in total exports, export earnings to these five countries rose by 26.6% to US$562.2Mn, chiefly due to higher exports of alumina to Iceland.

(Source: STATIN)

• Director of the Jamaica Cyber Incident Response Team (JaCIRT), Lieutenant Colonel Godphey Sterling, reported a 78% reduction in the number of attempted cyberattacks experienced locally over the past year.
• “This is due primarily to greater awareness within our population. Actions are being taken to mitigate vulnerabilities rather than treating with breaches and, therefore, attackers now find that they have less and less vulnerable enterprises and connections that they can exploit,” he informed JIS News.
• The Director noted that despite this reduction, there has been an increase in the number of ransomware compromises experienced in Jamaica. Compromises have been identified in the hotel industry, financial institutions, insurance companies and media entities, with some cases involving the exfiltration of personally identifiable information.
• Affected entities are urged to report the matter to the Office of the Information Commissioner and inform their clients of potential data exposure, particularly those in the financial sector.
• “It, therefore, means that if you are a client of the financial institutions that were hit, you need to be paying attention to your accounts. Pay attention to your balances for at least the next six months to ensure that you can spot any undue or unfamiliar transactions, particularly for large sums, on your accounts,” Col. Sterling said.

(Source: JIS)

• The political backdrop in Barbados is expected to remain relatively favourable in 2024 and 2025 due to strong government and social stability according to Fitch Solutions. Part of this trend will reflect improving social stability as economic conditions for households continue to improve.
• Consumer price inflation fell to 4.2% year-over-year (YoY) in February (latest available data), down from 6.5% YoY in the year-earlier period, owing to stabilising food and energy prices. Fitch forecasts that inflation will fall to an average of 3.9% in 2024 and 3.0% in 2025, which will provide some support to real household disposable incomes and consumer confidence.
• Furthermore, Barbados’ tourism sector will have another record year for arrivals in 2024, benefitting employment and wages in the sector (which indirectly employs around 20% of the workforce). Reflecting this trend, unemployment fell to 8.2% in the final quarter of 2023, the lowest level in four quarters.
• Against the backdrop of a gradual improvement in living standards, the already limited risks of strikes or protests in Barbados will decline in the months ahead. Of note, protests in Barbados are relatively rare and, when they happen, are normally peaceful.
• Given this backdrop, Barbados now holds a score of 26.1 (out of 100) in the Social Risk component of Fitch’s Political Risk Index (a high score implies high risk). This is a slight improvement from a score of 26.3 in the previous quarter and compares more favourable to Jamaica (35.8) and Trinidad and Tobago (32.43).

 (Source: Fitch Solutions)

• The Bank of Mexico (Banxico) lowered its benchmark interest rate by 25 basis points to 10.50% on Thursday, September 26, the second straight cut as price pressures have been easing in Latin America's No. 2 economy.
• The latest rate cut approved by the central bank's five-member governing board was not unanimous. Deputy Governor Jonathan Heath voted to hold the rate at 10.75%. Analysts polled by Reuters had overwhelmingly forecast the 25-basis-point cut.
• In a statement announcing its decision, Banxico noted that the global inflation outlook has improved while the closely watched core inflation rate, considered a good indicator for price trends, is expected to keep decreasing.
• "Looking ahead, the board expects that the inflationary environment will allow further reference rate adjustments," the statement said, emphasising; however, that the outlook for inflation "still calls for a restrictive monetary policy stance."
• Mexico's annual headline inflation slowed to 4.66% in the first half of September, official data showed on Tuesday, its fourth consecutive fortnight of declines. Core inflation moderated to 3.95%, its lowest level since early 2021.
• In August, Banxico also cut its benchmark interest rate by a quarter percentage point to settle at 10.75% in a divided decision, at the same time that it upwardly revised its year-end forecast for the rate of rising consumer prices.

(Source: Reuters)

• The number of Americans filing new applications for unemployment benefits dropped to a four-month low last week, suggesting that the labour market remained fairly healthy. The upbeat outlook on the economy was underscored by other data on Thursday, showing corporate profits increased at a more robust pace than initially thought in the second quarter.
• Strong profit growth should help to underpin the labour market and investment. The economy's resilience could make it harder for the Federal Reserve to deliver another 50-basis points interest rate cut in November, as some investors are hoping.
• Initial claims for state unemployment benefits dropped 4,000 last week to a seasonally adjusted 218,000 for the week ended Sept. 21, the lowest level since mid-May, the Labour Department said. Economists polled by Reuters had forecast 225,000 claims. Unadjusted claims decreased 5,957 to 180,878 last week. Though the labour market has lost momentum amid declining job openings and a step-down in hiring, layoffs have remained low.
• The continuing claims data covered the week during which the government surveyed households for September's unemployment rate. Continuing claims fell between the August and September survey week. The jobless rate slipped to 4.2% in August after rising to 4.3% in July. The increase in the unemployment rate from 3.4% in April 2023 as a surge in immigration boosted labor supply has raised fears of rapid labor market deterioration.
• A separate report from the Commerce Department's Bureau of Economic Analysis showed corporate profits, including inventory valuation and capital consumption adjustments, increased at a $132.5 billion annualized rate in the second quarter. They were revised up from the $57.6 billion pace estimated last month.
• The revision reflected a sharp upgrade to domestic profits of nonfinancial corporations, now estimated to have increased $108.8Bn instead of $29.2Bn. That could support business spending on equipment.

(Source: Reuters)

• New orders for key U.S.-manufactured capital goods unexpectedly rose in August, though business spending on equipment appears to have lost momentum in the third quarter. Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 0.2% last month after a downwardly revised 0.2% drop in July, the Commerce Department's Census Bureau said on Thursday.
• Economists polled by Reuters had forecast these so-called core capital goods orders would be unchanged after a previously reported 0.1% dip in July. Core capital goods orders gained 0.3% year-on-year in August. Higher borrowing costs have been a constraint on business investment, though a loosening of financial conditions as the Federal Reserve ready to cut interest rates boosted spending on equipment in the second quarter.
• Core capital goods shipments edged up 0.1% after falling 0.4% in July. Non-defense capital goods orders dropped 1.3%. They soared 42.1% in July. Shipments of these goods fell 1.6% after rising 4.8% in July. Shipments go into the calculation of the business spending on equipment components in the gross domestic product report. Orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, were unchanged last month after surging 9.9% in July.
• There were increases in orders for electrical equipment, appliances and components, machinery, fabricated metal products, and computers and electronic products. Orders for transportation equipment fell 0.8% after soaring 34.6% in July. Motor vehicles and parts orders rose 0.2%.
• Commercial aircraft orders and parts fell by 7.5%. Boeing reported on its website that it had received 22 orders last month, down from 72 in July. The outlook for aircraft orders is dim as the world's largest aerospace company deals with a range of issues, including a crippling strike. The head of the Federal Aviation Administration told a U.S. Senate panel on Wednesday that Boeing must address a series of safety issues before he will let them boost 737 MAX production.

(Source: Reuters)

• Bananas and plantains are expected to return to the market in good supply by February 2025. Addressing Wednesday’s (September 25) post-Cabinet press briefing at Jamaica House, Minister of Agriculture, Fisheries and Mining, Hon. Floyd Green, said both crops contribute more than $13Bn annually to Jamaica’s economy and were severely impacted by Hurricane Beryl.
• Detailed assessments revealed that approximately 64 percent of the crops in production were damaged, translating to more than $1.8Bn needed to resuscitate the crops.
• The minister noted that at least 73 major banana farmers lost over 50% of their crops and that it normally takes seven to nine months for banana crops to recover. In response, the government initially allocated $40Mn through the Banana Board, providing assistance to about 2,300 banana farmers. This support includes fertiliser and a six-week recovery plan to help restore their crops.
• Notably, in August 2024, monthly food prices rose by 4.3%, driven primarily by a 15.5% increase in ‘Vegetables, tubers, plantains, cooking bananas, and pulses.’ The increase in agricultural produce was one of the primary drivers of the spike in inflation in August due to supply shortages following the damage wrought by Hurricane Beryl. We anticipate that banana and plantain prices are likely to remain elevated until production normalises.
• PanJam is also likely to see its earnings adversely impacted for the September quarter as Subsidiary, JP Farms lost over 90% of its crops due to Hurricane Beryl. PanJam recently acquired JP’s core operating businesses, including JP Farms, in exchange for a 34.5% ownership stake in PanJam. Management noted that it has commenced its recovery efforts and aims to restore full production and sales by the first quarter of 2025.

(Sources: JIS & NCBCM Research)

• The Financial Services Commission (FSC) continues its active regulation of Stocks and Securities Limited (SSL), with a focus on ensuring that the company strictly adheres to the requirements set forth in the Securities Act to safeguard the interests of SSL’s clients and maintain the integrity of the financial system.
• The FSC reported that on July 31, 2024, it issued directions to SSL, requiring periodic updates, including the status of payouts to clients, to enforce transparency and accountability during the company’s winding-up process.
• Based on the latest information provided by the Trustee, SSL is advanced in its plans to make a payout to SSL clients. The payout is primarily from the proceeds of the sale of the International Securities Client Portfolio, with an approximate value in excess of USD 30 million.
• To ensure full compliance with the directions, the FSC will be closely monitoring SSL’s actions throughout this process. It continues to collaborate closely with law enforcement agencies to ensure the pursuit and successful completion of thorough investigations of any improprieties at SSL and will provide further updates as necessary.

(Source: FSC)

• Grenada’s Finance Minister, Dennis Cornwall, has announced that the Government anticipates the Escape Clause of the Fiscal Resilience Act (FRA) will continue for the year 2025, given that the Government will still be recovering from the impact of Hurricane Beryl.
• Addressing the opening ceremony of the Ministry of Finance budget retreat on Tuesday, September 24, 2024, Cornwall announced that the Escape Clause of the FRA, which went into effect on September 6, will be significant for Grenada’s recovery.
• As of September 6, 2024, Grenada activated the suspension law of the Fiscal Resilience Act, applicable for the fiscal year January to December 2024, which provides for the suspension of the requirements for public debt target and primary balance rule during a fiscal year when the condition for suspension is applicable. However, the finance minister has now noted that a further suspension will be required in 2025 as recovery and reconstruction efforts accelerate.
• That said, the FRA makes provisions for the Ministry of Finance to take certain responsibilities if the suspension order is published in the first half or second half of any given year. The legislation states that when the suspension order is published within the second half of the year, “the medium-term economic and fiscal strategy report accompanying the national budget for the new fiscal year shall include the measures proposed to facilitate compliance with the public debt target and primary balance rule in the new fiscal year, including the size and nature of the revenue and expenditure measures for the national budget for the new fiscal year.”
• Cornwall told participants attending the retreat that the Government’s priority will be building resilience in the aftermath of Hurricane Beryl and its focus must remain steadfast. “Accordingly, the 2025 budget should prioritise anything that elevates health, education and social welfare. By investing in our people, we are laying the groundwork for a fair and a more prosperous Grenada,” he said, pointing out that each programme should be designed to enhance the quality of life of citizens and address critical local needs with compassion.
• “We should continue our efforts to diversify our economy. Our focus for 2025 should be on us presenting a dynamic and competitive economy while showing that our infrastructure can withstand the challenges that are caused by climate change and other extreme weather events.”

(Source: Now Grenada)

• Bermuda’s economy has demonstrated notable growth and resilience. During the first quarter of 2024 (Q1 2024), Bermuda’s economy grew by an estimated 7.1%, adjusted for inflation, signifying strong expansion compared to the previous year. This economic growth resulted from increased household expenditure and a rise in the export of goods and services.
• Evidenced by both real and nominal GDP figures, such growth highlights the economy’s resilience and the effectiveness of supportive government policies and prevailing market conditions, according to Bermuda’s Minister of Economy and Labour, Jason Hayward.
• Consumer spending in Q1 2024 increased 1.2% year-over-year to US$793.4Mn. This increase reflects modest yet positive growth in the total amount of money consumers spent on goods and services during the quarter. The increase in consumer spending in Bermuda also demonstrates a positive economic environment, with growth in both service consumption and investment in durable goods likely due to higher employment incomes.
• Of note, employment income rose by 11% compared to 2023 levels. Notable increases in employment income were observed across various industries, including International Business (17.1%), Hotels & Restaurants (6.7%), Banking Insurance & Real Estate (8.2%), Public Administration & Defense (7.4%), and Transport and Communication (14.9%).
• Tourism, which is vital to Bermuda’s economy, also showed growth in the first quarter of 2024. For Q1 2024, Bermuda welcomed 25,761 air visitors, an increase from 24,661 in 2023. Visitor’s estimated expenditure also rose, reaching US$52.6Mn, up from US$48.7Mn the previous year.
• Overall, economic growth in Bermuda will continue to be driven by infrastructure projects, the construction sector, and its position as a global leader in the insurance and reinsurance sector along with steady tourism growth. Furthermore, inflation rates in the sovereign remain somewhat contained and should provide some tailwinds for personal consumption and by extension economic growth. Bermuda’s economy is on track to grow about 3.0% in 2024 before slowing to 1% thereafter, somewhat in line with pre-pandemic growth performance, following an estimated increase of 4.0% in 2023 and 6.4% in 2022 (S&P).

(Sources: BerNews, S&P & NCBCM Research)