• Minister of Tourism, Hon Edmund Bartlett, has embarked on a strong multi-city marketing blitz in the United States starting June 17th. The engagement will include several meetings with airline partners and key interviews with top media houses in New York, Chicago, and Dallas.
• “It is critical that we maintain strong relationships with our tourism partners in the United States, which is our largest source market, bringing in 74% of our arrivals. It is through these strong relationships we have been able to experience continued growth to be 4% up over 2023,” said Minister of Tourism, Hon Edmund Bartlett.
• The multi-city marketing blitz begins in New York with a series of key media interviews and participation at the Caribbean Tourism Organization Week. The Minister will also hold meetings with Senior Executives from major airline operators, JetBlue, Delta and United.
• “The US remains a key source market for Jamaica and as such it is critical that we consistently engage with our critical stakeholders there to find ways to improve our outcomes,” said Donovan White, Director of Tourism.
• Jamaica’s tourism is thriving. Visitation set a record in 2023 with more than 4Mn visitors, and the island is on pace to top that figure in 2024, with more than 2Mn arrivals in the first four months of the year. The forecast for 2024 is 4.58Mn visitors, with a 9.6% increase in earnings of US$4.38Bn.

(Source: JIS)

• Wayne Furbert, the Minister of Transport for Bermuda, said airlift to the island will continue to rise as tourism bounces back from the pandemic.
• Mr Furbert told the House of Assembly that airlift had increased 22% between 2022 and 2023, with air capacity expected to continue rising. He added: “The growth in air travel showcases our ability to not just endure challenges but to emerge stronger, thriving as a destination of choice.”
• Mr Furbert told the House that in 2018, there were a total of 611,000 available Bermuda-bound seats. While that figure dipped 5% in 2019, airlift plummeted in 2020 with the Covid-19 pandemic as flights got grounded internationally. However, he said the number of seats rose from 170,000 to 237,000 in 2021, 356,000 in 2022, and 433,000 last year.
• He highlighted recent developments, including the growth of BermudAir, the return of American Airlines flights from Washington DC, and boosted airlift between the island and Newark, Boston, and Miami. These developments should add to greater tourist numbers for 2024.
• Bermuda’s solid economic growth, with GDP above pre-pandemic levels, reflects its competitive global insurance and reinsurance sector, construction sector, and recovery in tourism. Moody's Investor Services projects GDP growth of around 1.5% in 2023-2025, a conservative but more in line with the economy's pre-pandemic growth performance.
• S&P Global Ratings, however, projects GDP will grow by 3.0% in 2024 and will slow to an average of 1.1% during 2025-2027.

 (Sources: The Royal Gazette & NCBCM Research)

• The International Monetary Fund (IMF) allowed for the disbursement of over $500Mn to Costa Rica last Friday, June 14, after a successful review of the Central American country’s reform programs, the organization said in a statement.
• The IMF Executive Board concluded the sixth and final review under the Extended Fund Facility (EFF) for Costa Rica, allowing for a disbursement equivalent to about US$ 272Mn.
• Further, the IMF Executive Board also concluded the third and final review under Costa Rica’s Resilience and Sustainability Facility (RSF) arrangement, making available about US$ 243Mn in support of Costa Rica’s ambitious climate change agenda.
• “Costa Rica is the first country to complete an RSF arrangement,” which was launched to support poor or vulnerable countries in the face of long-term difficulties caused by global warming, according to the IMF.
• “The completion of the reviews marks the successful conclusion of an ambitious, multi-year, multi-dimensional reform program… that is helping reshape Costa Rica’s economy and advance the climate agenda,” Kenji Okamura, Deputy Managing Director of the IMF, said in a statement.
• The sovereign is expected to grow by 4.0% in 2024 and average 3.0% growth between 2025 and 2029, driven in particular by robust external demand, a recovery in foreign direct investment, and stronger household consumption. Furthermore, Costa Rica stands to benefit from the global "near-shoring" trend, especially in the healthcare and service-related export sectors.

(Sources: IMF & NCBCM Research)

• British inflation returned to its 2% target for the first time in nearly three years in May, but strong underlying price pressures all but rule out a pre-election interest rate cut. While Prime Minister Rishi Sunak welcomed the fall in headline inflation in May, it has likely come too late to turn around his fortunes in British elections on July 4 or to prompt a Bank of England (BoE) rate cut on Thursday.
• Office for National Statistics data showed services price inflation, which the BoE thinks gives a better picture of medium-term inflation risks, was 5.7%. That was down from 5.9% in April but higher than the 5.5% economists had forecast in a Reuters poll or the 5.3% predicted by the BoE last month.
• The drop in annual consumer price inflation from April's 2.3% reading - in line with economists' expectations - took it to its lowest since July 2021 and marks a sharp decline from the 41-year high of 11.1% in October 2022. The fall has been sharper than in the euro zone or the United States, where consumer price inflation in May was 2.6% and 3.3%, respectively, belying concerns a year ago that British inflation was proving unusually sticky.
• The BoE has said a return of inflation to its target is not enough on its own for it to start cutting interest rates. "Rate-setters will still need to weigh the fall in headline inflation against signs that domestic price pressures, such as elevated pay growth, are proving slower to come down," Martin Sartorius, principal economist at the Confederation of British Industry, said.
• The most recent fall in inflation was partly driven by a cut in regulated household energy bills in April - the effect of which will fade later in the year, when the BoE forecasts inflation will rise to 2.6%. Lower food prices were the biggest factor pushing inflation down in May, reducing the annual rate of inflation for food and non-alcoholic drinks to 1.7% from a 45-year high of 19.2% in March 2023.
• Cheaper electrical appliances and a smaller rise in the cost of recreational and cultural activities also helped lower inflation. Higher airfares were the biggest factor to cause services price inflation to fall less than expected. Airfares are volatile, and some economists view them as a poor guide to broader inflation trends.

(Source: Reuters)

• The U.S. budget deficit will jump to $1.915 trillion for fiscal 2024, topping last year's $1.695 trillion gap as the largest outside the COVID-19 era, the Congressional Budget Office (CBO) said on Tuesday, citing increased spending for a 27% increase over its previous forecast.
• The CBO said in an update to its budget outlook that higher outlays for student loan relief, Medicaid healthcare for the poor, higher Federal Deposit Insurance Corp costs to resolve bank failures and U.S. aid to Ukraine and Israel make up the bulk of a $408 billion increase in this year's projected deficit since February, when it forecast a $1.507 trillion deficit.
• If realised, the forecast for the fiscal year ended Sept. 30 would mean a second consecutive substantial deficit increase for U.S. President Joe Biden, after deficits fell substantially in 2022 as COVID spending subsided. CBO forecasts that the deficit will climb further in fiscal 2025 to $1.938 trillion.
• For the fiscal 2025-2034 decade, the CBO raised its cumulative deficit forecast to $22.083 trillion, up $2.067 trillion from the February projection. It said debt held by the public at the end of 2034 would total $50.7 trillion, or 122% of gross domestic product, compared to the February forecast of 48.3 trillion, or 116% of GDP.
• Factors pushing up the long-term deficits included $1.6 trillion in increased outlays related to recent legislative changes, including extensions of the supplemental funding of $95 billion passed this year for Ukraine, Israel, and the Indo-Pacific region, CBO said.

(Source: Reuters)

• The Government is investing $6.31Bn on the rehabilitation of agricultural research facilities across the island over the next six years. The work will be done under phase two of the Rehabilitation of Research Centres Project, which was launched on June 13 at the Bodles Research Centre in St. Catherine.
• The objective of the Rehabilitation of Research Centres Project is to upgrade research, training, and administrative facilities for utilisation by scientists, extension officers, and agriculture training institutions.
• Phase one of the undertaking, which involved investment of approximately $1B3n, focused on the Bodles Research Centre. The project was initially slated for implementation between April 2018 to March 23 and was extended to March 2024.
• The Rehabilitation of Research Centres Project phase two will impact the five research stations under the Ministry’s Research and Development Division. In addition to Bodles, the others are Top Mountain Station in St. Andrew, Orange River Station in St. Mary, Hounslow Station in St. Elizabeth, and the Montpelier Station in St. James.
• Works to be undertaken at Bodles include construction and renovation of dairy parlor, warehouse and storage, immature paddock, cattle handling facility, scale house and clerk office, feed mixing facility, administration building and changing room and lounge.
• Minister of Agriculture, Fisheries and Mining, Hon. Floyd Green, said the significant investment is intended to revitalise research capacity to drive productivity and production.
• “In phase two, we won’t just focus on Bodles. We have to focus on the entire infrastructure of our research… The central objective of phase two is to ensure that all our research centres are seen as centres of excellence to ensure that they facilitate the Government’s drive to contribute to economic growth and development, import substitution and employment generation,” he said.

(Source: JIS)

• Trinidad and Tobago's (T&T’s) oil production saw a decline of 11% in the first quarter of 2024 compared to the same period in 2023, the latest statistics from the Ministry of Energy and Energy Industries show.
• For the first three months of 2024, the country's average production was 49,879 barrels of oil per day (bo/d) compared to 56,292 (bo/d) for the same three-month period in 2023, a decline of 6,413 bo/d or 11.3%, the Ministry's energy bulletin showed.
• Finance Minister Colm Imbert recently told the country in an affidavit that oil and gas production for the first six months of fiscal 2024 has been 15% and 5%, respectively, below the volumes originally expected for 2024.
• In addition, the prices of the commodities have also been lower than the Finance Minister had hoped, leading to a budgetary shortfall of more than $9Bn.
• Purchasing drugs and equipment for public hospitals, paying for tertiary education for students, to senior citizen grants, come from the money earned from the production and sale of oil, gas, and its derivatives.
• Given this, the continued decline in T&T’s oil industry calls for greater investments in T&T’s non-oil economic segments in order to diversify the sovereign’s economy. This, coupled with measures to improve the current state of the oil industry could allow the government to see greater revenues once realised.

(Sources: Trinidad Express Newspaper & NCBCM Research)

• Supporters for more consolidation in the euro zone's banking sector have been watching Spanish lender BBVA's hostile bid for Sabadell, alongside comments from some supervisors and lawmakers supporting the idea of more tie-ups. Regulators are keen for more consolidation - both within and across countries - because they believe fewer, stronger lenders will boost the economy and enable euro area banks to compete more effectively with larger, more profitable rivals in the United States and Asia.
• Yet, big banking takeovers have been rare since the 2008-09 global financial crisis, with most dealmaking forged out of necessity. The banking industry concentration, as measured by the share of bank assets accounted for by the largest five credit institutions, varies widely across the bloc.
• In Greece, Cyprus and the Baltic states, that share ranged between 88% and 95% in 2023, according to data from the European Central Bank analysed by Reuters. Several of these countries have also seen the biggest increase in concentration in the past decade, as financial crises forced lenders to acquire weaker rivals.
• In Spain, where the top five credit institutions' 69% share of bank assets is close to the euro zone average, the number of banks has fallen to 10 from 55 before the global financial crisis. Germany, by contrast, has hundreds of banks, according to data from its central bank.
• Euro zone banking concentration by country is, on average, higher than in the U.S., where the five biggest banks' assets share was 50% in 2021, data published by the Federal Reserve Bank of St Louis show. However, fragmentation is much higher in some euro zone countries, especially in bigger and richer economies like powerhouses France and Germany, where the top five institutions' asset share is 45% and 34%, respectively, the ECB data show. These countries have seen the least consolidation in the last decade, too.
• This is partly because they have avoided the crises that force regulators and lawmakers to dismantle the hurdles usually preventing domestic banking mergers. Impediments to cross-border deals are even greater and include differing regulations and labour laws and the lack of a euro zone-wide deposit insurance scheme and politics.

(Source: Reuters)

• China's May industrial output lagged expectations, and a slowdown in the property sector showed no signs of easing despite policy support, adding pressure on Beijing to shore up growth. Apart from retail sales that beat forecasts due to a holiday boost, the flurry of data on Monday was largely downbeat, underscoring a bumpy recovery for the world's second-largest economy.
• May industrial output grew 5.6% from a year earlier, National Bureau of Statistics (NBS) data showed, slowing from the 6.7% pace in April and below expectations for a 6.0% increase in a Reuters poll of analysts.
• Manufacturing investment in the first five months showed robust growth of 9.6%, underpinned by China's emphasis for "quality growth" through technological breakthroughs and innovation this year. On the other hand, economists have warned that rising trade tensions with the West over China's so-called over-capacity may impose more challenges to Chinese solar and electric vehicle producers.
• China's property market slump, high local government debt, and deflationary pressure remain heavy drags on economic activity. The latest figures point to an uneven growth that reinforces calls for more fiscal and monetary policy support.
• China's economy grew 5.3% in Q1, surpassing expectations, yet achieving the government's ambitious 5% annual growth target seems challenging due to a stagnant property sector.
• To address the downturn, China's central bank introduced a re-lending program for affordable housing, acknowledging that policy adjustments will take time to stabilize the market. Despite efforts to support homebuyers and stimulate demand, economic indicators like new bank lending and consumer confidence remain subdued, impacting broader economic recovery efforts.

(Source: Reuters)

• The government entered a US$20Mn loan agreement with the World Bank, for the Social Protection for Increased Resilience and Opportunities (SPIRO) Project. This initiative seeks to enhance social protection coverage in Jamaica by creating a national unemployment insurance program and fortifying the social protection delivery system.
• The government and the World Bank made a $20Mn deal for the SPIRO Project in Jamaica, aiming to improve social protection by setting up an unemployment insurance program and strengthening delivery systems.
• In his remarks during the SPIRO Visibility Ceremony, Minister of Finance, Dr. the Hon. Nigel Clarke emphasised that Jamaica must create an unemployment insurance plan. Dr Clarke cited the COVID-19 crisis and job losses as reasons. He noted that such a scheme would enhance social stability by offering support during economic downturns caused by unemployment.
• Lilia Burunciuc, the World Bank Country Director, stated that SPIRO will drive significant changes in Jamaica's social protection system, includes five parts and will run until January 2030.
• Component 1: Creating unemployment insurance in Jamaica, costing approximately US$1.34Mn, to build resilience. Component 2: Investing US$8.75Mn to improve employment services for employers, job seekers, including those on unemployment insurance, and vulnerable groups. Component 3: Allocating US$7.96Mn to develop and implement comprehensive information systems, offer technical support to modernise key programs, gather evidence for ongoing improvements, and provide capacity building to the Ministry of Labour and Social Security (MLSS) and other social protection stakeholders. Component 4: Covers project management at an estimated cost of US$1.9Mn, while component 5 will have a zero-fund allocation for rapid access to World Bank financing for response and immediate recovery needs during and immediately after a crisis.

(Source: JIS)