• Canada's economy grew at an annualised rate of just 1% in the third quarter, in line with market expectations but less than the 1.5% forecast by the Bank of Canada, prompting currency markets to boost bets for a large rate cut next month.
• The increase in GDP came from an unlikely growth in consumer spending and persistent government expenditure but it failed to offset declines seen in business investments.
• The BoC has reduced borrowing costs by 125 basis points since June to 3.75% as the annual inflation rate fell back toward its 2% target and the bank grew more concerned about a hobbling economy. The GDP data, as well as an employment report due early next month, will help the Bank of Canada determine the size of an expected rate cut at its last monetary policy decision of the year on Dec. 11.
• Currency markets boosted their bets for a 50bps reduction in interest rates next month to around 44% from 31% before the data were released.
• Economic growth came below expectations at 0.1%, Statscan said, and a preliminary estimate showed growth was likely to be 0.1% in October. Analysts had predicted month-on-month GDP growth in September at 0.3%. The fourth-quarter number indicates a slower start to the final quarter of the year, which could force the bank to revise its fourth-quarter growth target it projected in October.
• Economists noted that growth prospects do not seem inspiring in Q4 2024 or the start of next year as a looming threat from the proposed 25% unilateral tariffs by U.S. President-elect Donald Trump and immigration curbs will gnaw at the GDP pie.

(Source: Reuters)

• The United States on Monday launched its third big crackdown in three years on China's semiconductor industry, curbing exports to 140 companies, including chip equipment maker Naura Technology Group, among other moves.
• New controls will be placed on semiconductor manufacturing equipment needed to produce advanced-node integrated circuits, including certain etch, deposition, lithography, ion implantation, annealing, metrology and inspection, and cleaning tools.
• Additionally, there will be new controls on software tools for developing or producing advanced-node integrated circuits, including certain software that increases the productivity of advanced machines or allows less-advanced machines to produce advanced chips.
• The new rule will expand U.S. powers to curb exports of chipmaking equipment by U.S., Japanese, and Dutch manufacturers made in other parts of the world to certain chip plants in China.
• Another rule in the package restricts high bandwidth memory used in AI chips that correspond with what is known as "HBM 2" and higher, technology made by South Korea's Samsung and SK Hynix and U.S.-based Micron Technology.
• Industry sources expect only Samsung Electronics to be affected. Analysts estimate Samsung generates about 30% of its HBM chip sales from China. HBM is critical to both AI training and inference at scale and is a key component of advanced computing integrated circuits.
• The 140 new entrants on the Commerce Department's Entity List include semiconductor fabrication plants, also known as fabs, semiconductor tool companies, and investment companies "that are acting at the behest of Beijing to further China's advanced chip goals which pose a risk to U.S. and allied national security."

(Source: Reuters)

• Jamaica’s Monthly and Point-to-Point Producer Price Index (PPI) results were mixed for October 2024 across the Mining & Quarrying and Manufacturing industries according to data from STATIN.
• The monthly output prices for producers in the ‘Mining & Quarrying’ industry declined by 21.1% in October 2024, while prices in the Manufacturing industry increased by 0.2%.
• The downward monthly movement in the ‘Mining & Quarrying’ industry was led by a 21.7% decline in the index for the major group ‘Bauxite Mining & Alumina Processing’, marginally offset by the index for ‘Other Mining & Quarrying’ that inched up 0.1%.
• On the other hand, the marginal increase in output prices in the manufacturing industry was driven by slight increases in the prices for ‘Food, Beverages, and Tobacco’ and the Refined Petroleum groups. ‘Food, Beverages, and Tobacco’ grew 0.2%, driven by higher prices in the subcategories ‘Manufacture of Beverages and Tobacco’ (0.5%) and ‘Manufacture of Other Food Products’ (0.1%). Meanwhile, ‘Refined Petroleum Products’ grew 0.6%, resulting from higher crude oil prices on the international market.
• However, on a point-to-point basis (October 2023 – October 2024), the tables turned, with the ‘Mining and Quarrying Index’ increasing (+9.2%) and the Manufacturing Index declining (-0.3%).
• ‘Mining and Quarrying’ price increases were led by a 9.2% increase in the prices associated with Bauxite Mining & Alumina Processing. Meanwhile, prices in the Manufacturing Industry were influenced by a 12.4% decline in the prices of Refined Petroleum Products, albeit moderated by a 3.1% increase in Food, Beverages & Tobacco prices.
• The Producer Price Index (PPI) is a significant economic indicator that tracks the average fluctuation in selling prices that domestic producers of goods and services experienced over time. Currently, the only industries being tracked are the Manufacturing Industry and ‘Mining & Quarrying’.
• S. President-elect Donald Trump has asserted that once he takes office in January, tariffs may be imposed on Canada, Mexico, and China. Trump’s proposed tariffs could ignite a trade war¹, driving up the cost of goods and services to the U.S. and its trade partners. Since the U.S. is Jamaica’s primary trading partner and a key source of imported inputs, Jamaican producers could face increased input costs. This, in turn, may lead to further rises in the Manufacturing Index.

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¹A trade war is a situation in which countries try to damage each other's trade, typically by the imposition of tariffs or quota restrictions.

Source: (STATIN & NCBCM Research)

• Senator Hon. Aubyn Hill, Minister of Industry, Investment, and Commerce, has announced that the Government is strategically positioning Jamaica to become a regional hub for technology and innovation – a key pillar of the country’s economic growth agenda.
• During the Global Services Association of Jamaica (GSAJ) President’s Breakfast Forum in Montego Bay on November 22^nd, Senator Hill said the Government is incentivising innovation and digital transformation to foster an environment that is conducive to high-quality research and development in digital technology, including artificial intelligence (AI).
• Senator Hill emphasised the Government’s proactive embrace of artificial intelligence (AI) as a transformative technology. He noted that a National AI Task Force was established last year to lay an evidence-based foundation for crafting a comprehensive AI policy framework. The policy is expected to leverage AI, by integrating into sectors, like health, agriculture and education and, the Global Digital Services Sector (GDSS), to enhance productivity.
• Meanwhile, he urged GDSS businesses to capitalise on the advantages offered under the Special Economic Zone (SEZ) regime. He noted that companies operating within SEZs, including those engaged in outsourcing, can enjoy significant incentives, such as a 50% reduction in their corporate income tax rate.
• He noted that in the domestic economy, companies pay a corporate income tax rate of 25% to 33 1/3%, while companies in Special Economic Zones (SEZ) pay as little as 12.55%, which can be further reduced to 7.75% through the application of promotional and employee tax credits.

Source: (JIS)

• Prime Minister of Canada, Justin Trudeau, on Tuesday, November 26, said Canada must stay united against a threat by Donald Trump to impose tariffs. Two major provinces quickly called on him to address the U.S. President-elect's concerns.
• Trudeau, due to meet the premiers of the 10 provinces to discuss U.S. relations, often notes his Liberal government has four years' experience dealing with the first Trump administration.
• Notably, Trump affirmed on Monday that he would impose a 25% tariff on imports from Canada and Mexico until they clamped down on drugs, particularly fentanyl, and migrants crossing the border. Such a tariff would badly hit the economy of Canada, which sends 75% of all goods exported to the United States.
• The premier of Ontario, the most populous province and the country's industrial heartland said Trump had good reason to be worried about the security of the long-shared frontier.
• In another early sign of strain, the premier of the oil-rich province of Alberta said late on Monday that Trump had valid concerns related to illegal activities at the shared border.
• "We are calling on the federal government to work with the incoming administration to resolve these issues immediately, thereby avoiding any unnecessary tariffs on Canadian exports to the U.S.," Premier Danielle Smith said in a social media post.

(Source: Reuters)

• China's industrial profits fell again in October but less sharply than the previous month as deflation pressures dragged, while demand remained soft in the crisis-hit $19Tn economy. Fresh headwinds from additional U.S. tariffs could also threaten China's industrial sector next year, reducing export earnings.
• The sprawling sector, which includes mining, processing and manufacturing companies, has struggled to stay profitable in the face of feeble domestic demand hit by a years-long property crisis, unemployment and rising trade tensions.
• According to National Bureau of Statistics (NBS) data, Industrial profits in October fell 10% year-on-year (YoY), better than a 27.1% slump in September. These consecutive months of YoY declines meant earnings slid 4.3% in January-October of 2024 versus a 3.5% decline in January-September.
• Separate economic indicators earlier this month pointed to broadly soft demand, with consumer prices at their weakest in four months while industrial output continued to trend downward and new home prices fell at their fastest pace in nine years.
• Outside of the tepid economic data, China's export earnings will also be squeezed by U.S. tariffs, hammering manufacturers. Trump could impose 40% tariffs on imports from China, a Reuters poll of economists showed. If tariffs are gradually increased to 40% and not all at once, expedited shipments ahead of new tariffs could help offset the impact of subsequently higher levies, resulting in a 2025 export decline of 1.7%, according to Minsheng. If only an additional 10% tariff is imposed, China's 2025 export growth could come in at 0.2%, the Chinese securities firm said.

(Source: Reuters)

• Deputy Governor of the Bank of Jamaica (BOJ), Jide Lewis, says that all banks are expected to be prepared for the increased demand for cash during the upcoming holiday season. He mentioned that the seasonal increase in demand for currency during Christmas time would likely mean that banks will need to stock up on additional funds.
• Mr. Lewis, who is responsible for the Financial Institutions Supervisory Division, was addressing the BOJ’s Quarterly Monetary Policy Report Press Conference on Monday. He noted that banks are being held to the minimum service standards for the operation of the machines, which were announced earlier this year
• In April, the BOJ issued new service standards as guidelines for the operation of automated banking machines (ABMs) by deposit-taking institutions (DTIs). These standards were implemented to address (i) the availability of cash (ii) infrastructure maintenance and the management of service disruption (iii) ABM fees and charges (iv) the deployment of machines (v) accessibility and ease-of-use (vi) fraud minimisation (vii) the safety and security of customers and (viii) financial education of ABM users.
• Designed to address long-standing consumer concerns, the standards subject banks to heightened scrutiny without imposing fines for non-compliance. They mandate that at least 90% of Automated Banking Machines (ABMs) must remain operational at all times, with those in service maintaining a functionality rate of at least 95%.
• Additionally, ABMs in urban or resort areas must not remain out of cash for more than 60 consecutive minutes, while those in rural areas are required to be restocked within a maximum of 180 minutes (three hours).
• Although fines are not currently in place, the Bank of Jamaica (BOJ) is set to implement a new regulatory framework for the financial sector in 2026, which will introduce penalties for banks failing to comply with ABM service standards.

(Sources: JIS & NCBCM Research)

• In a groundbreaking move for the Caribbean, the Jamaica Tourist Board (JTB) has partnered with the Jamaica Travel Channel (JTC) to stream destination-focused video content across multiple digital platforms, reaching a global audience. The newly redesigned Jamaica Travel Channel, which already attracts over 250,000 monthly online viewers, highlights some of Jamaica’s finest accommodations, captivating experiences, and breathtaking landscapes.
• This partnership aligns with the Ministry of Tourism's mandate to enhance awareness and drive visitor arrivals, ultimately increasing occupancy across the destination.
• Director of Tourism for JTB, Donovan White, highlighted that this initiative will expand its audience reach. Originally launched in 2015 as Jamaica’s first and only visitor in-room TV channel, the JTC already enjoys a robust presence in almost all hotel rooms island-wide, where it is viewed by tens of thousands of on island tourists daily.
• Kimani Robinson, Founder and Director of Jamaica Travel Channel, emphasized the impact of this new venture, “We currently receive hundreds of emails monthly from tourists thanking us for our platform which acts as a guide for them while on island. Streaming the Jamaica Travel Channel online significantly boosts our visibility before travelers even arrive in Jamaica.
• Beyond offering valuable content for prospective travelers, the online channel also serves as a resource for travel agents globally, equipping them to recommend Jamaica's premier experiences to their clients. The channel’s stream already features iconic brands such as Dunn’s River Falls, RIU Hotel, Couples Hotel, Jakes Hotel, Island Routes, Mystic Mountain, and The Artisan Village in Falmouth, among others.

(Source: Jamaica Tourist Board)

• The Dominican Republic continues to strengthen its international presence in the beef market, with recent exports to El Salvador and Guyana following the successful entry into the US market in 2022.
• Eric Rivero, Agricultural Advisor to the Executive Branch, emphasized the government’s commitment to fostering national production and strengthening the country’s livestock sector. “These achievements not only guarantee our food self-sufficiency but also generate foreign exchange and position our livestock industry as globally competitive,” said Rivero.
• The re-entry into the US market marked a significant milestone for the Dominican beef industry. After years of restrictions due to health and safety standards, the US Department of Agriculture’s Food Safety and Inspection Service (FSIS) approved the export of raw beef and beef products from the Dominican Republic.
• Over the past two years, the country has exported over $14 million worth of beef to the US. This success is attributed to the efforts of four to six certified slaughterhouses that adhere to strict quality standards.
• The expansion into El Salvador and Guyana represents a major step in diversifying the country’s export markets. Rivero stressed the importance of meeting international standards and continuously improving production processes. “These new markets present both challenges and opportunities,” he noted. “We must strive to maintain our high standards and adapt to evolving market demands.”
• The Dominican Republic’s beef industry is poised for further growth and development. By focusing on quality, sustainability, and market diversification, the country aims to solidify its position as a reliable supplier of beef products to the global market.
• The global beef market size was valued at US$430.23Bn in 2024 and is expected to grow at a CAGR of 5.8% from 2025-2033. In developing countries, rapid urbanization is driving a shift in dietary preferences toward Western-style diets that emphasize higher meat consumption. In China, the world’s largest importer of beef, and in Southeast Asia, beef consumption is outpacing pork and poultry consumption, reflecting the economic development and urban growth in these regions.

(Source: Dominican Today and GlobeNewswire)

• On November 25, 2024, The Bahamas and Guyana signed an open skies Air Services Agreement to promote and facilitate airlines to operate air services between the two countries, as well as other countries.
• Signing the Agreement on behalf of The Bahamas was Isaac Chester Cooper, deputy prime minister and minister of tourism, investments and aviation and for Guyana, Bishop Juan Edghill, minister of public works.
• Minister Edghill noted that the agreement is in keeping with the government’s commitment to connecting Guyana with the rest of the world and it is anticipated that Bahamas Air will soon add destination Guyana to its regional network.
• Consistent with the government’s model of open skies agreements, the Agreement facilitates acceptance of the Principal Place of Business, meaning that the airlines could benefit from foreign share capital and investment once they establish their main economic and operating base in either The Bahamas or Guyana.
• The Principal Place of Business condition for airline designation is now a common inclusion in Air Services Agreements and creates a very advantageous position for small States with limited capital or financial resources.
• Presently, there are no direct flights between Guyana and The Bahamas. However, this Agreement puts in place the legal framework that opens market access for airlines to operate and enhance competitive air transport services, trade, and economic growth between the two countries.

(Source: Caribbean News Global)