• U.S. consumer prices were unexpectedly unchanged in May, as cheaper gasoline offset higher costs for rental housing. However, inflation likely remains too high for the Federal Reserve to start rate cuts before September against the backdrop of a persistently strong labour market.
• The unchanged reading in the consumer price index last month followed a 0.3% increase in April, the Labor Department's Bureau of Labor Statistics reported. It was the softest reading since July 2022. The CPI has been trending lower since posting solid readings in February and March. Economists polled by Reuters had forecast the CPI would edge up 0.1% in May. Price pressures could continue moderating as major retailers, including Target, slash prices on goods ranging from food to diapers as they seek to lure inflation-weary consumers.
• Last month, gasoline prices dropped 3.6% after increasing 2.8% in April. Food prices edged up 0.1% after being unchanged in April. Prices at the supermarket were unchanged amid a 1.3% drop in milk. There were also decreases in the prices of nonalcoholic beverages. Prices of fruits and vegetables were unchanged.
• However, the cost of rent increased by 0.4%, matching April's rise. In the 12 months through May, the CPI advanced 3.3% after increasing 3.4% in April. Though the annual increase in consumer prices has slowed from a peak of 9.1% in June 2022, inflation continues to run above the Fed's 2% target.

(Source: Reuters)

• Jamaica’s Ministry of Agriculture, Fisheries, and Mining has launched a comprehensive new program to revitalise the dairy industry and address local and international demand for dairy products. This initiative is expected to usher in a new era of innovation and efficiency in milk production.
• The Dairy Livestock and Innovation Nutrition Programme prominently features the introduction of solar-powered cooling systems. These systems aim to boost energy efficiency and reduce production costs for dairy farmers, marking a transition to more sustainable agricultural methods.
• The Ministry will further improve the industry's technological infrastructure by distributing 15 new mobile milking machines across dairy farming communities. Additionally, the Jamaica Dairy Development Board will initiate a technology center and an equipment lease program.
• Under the initiative there are also plans to expand the local gene pool by importing and distributing cattle embryos and semen, which could significantly boost the quality and quantity of dairy production.
• A total of $56Mn is earmarked to establish new dairy farms at various schools and colleges, enhance existing dairy programs and equip them with modern facilities and equipment.
• With these measures, the Ministry aims to increase annual milk production to 30 million litres by 2030, a significant rise from the 10.6 million litres recorded in 2023. This goal aligns with the broader vision of sustaining the dairy industry’s growth and meeting emerging market needs.

(Source: Caribbean National Weekly)

• Jamaica’s total spending on imports for January 2024 was valued at US$689.5Mn, while total earnings from exports were valued at US$157.1Mn, according to the Statistical Institute of Jamaica (STATIN).
• During the period, import values rose by 16.4% to US$689.5 million, up from US$592.3 million in January 2023. This significant increase was mainly due to higher imports of "Fuels and Lubricants," "Capital Goods (excluding Motor Cars)," "Transport Equipment," and "Consumer Goods," which increased by 53.7%, 30.6%, 30.4%, and 0.8%, respectively.
• In the first month of 2024, total exports were 15.2% lower than the US$185.2 million earned in the corresponding period of 2023. This decline was mainly attributed to a 23.0% reduction in the value of "Mineral Fuels" exports.”
• Domestic exports for January 2024 fell by 11.1% to US$124.7Mn compared to US$140.3Mn for January 2023. There was also a decline in re-exports. which fell by 28.0 % to US$32.3Mn.
• Domestic exports refer to commodities that are grown, extracted, or manufactured in Jamaica, including goods of foreign origin that have been assembled or transformed locally. Conversely, re-exports refer to goods of foreign origin that have not undergone significant transformation while in Jamaica, typically moving out from customs storage or manufacturing warehouses.
• Jamaica’s top five main trading partners from largest to smallest were the United States of America (USA), Brazil, China, Colombia and Japan. Imports of goods from these countries accounted for 64.7% of total imports and valued at US$445.9Mn. This was 16.0% above the US$384.4Mn spent in January 2023. This increase was due largely to higher imports of mineral fuels from Brazil.
• The top five destinations for Jamaica’s exports were the USA, Iceland, the Russian Federation, Puerto Rico and, the United Kingdom. Revenue earned from exports t these countries decreased by 22.6% to US$113.4Mn due to lower alumina exports.
• Overall, this led to a 30.7% increase in the trade deficit, reaching US$532.4 million in January 2024 compared to January 2023.

(Source: STATIN)

• Farmers and entrepreneurs across 8 Caribbean countries stand to benefit from the new CAD$10Mn Regional Gender-Responsive Climate-Smart Agriculture and Food Systems in the Caribbean project, officially launched on June 3, 2024, at United Nations House in Barbados.
• Funded by the Government of Canada, the 4-year project (2024-2028) will be implemented by the Food and Agriculture Organisation of the United Nations (FAO) in Belize, the Commonwealth of Dominica, Grenada, Guyana, Jamaica, St Lucia, St Vincent and the Grenadines and Suriname.
• A collaborative effort involving Canada, FAO, local government and civil society partners, the project will enhance Caribbean farmers’ resilience to climate change and contribute to economic growth in the region. First announced by Prime Minister Justin Trudeau during the Canada-Caricom Summit in October 2023, the regional project will contribute to improving the livelihoods of women and youth in climate-resilient agriculture value chains in the Caribbean.
• Through the Canada-funded project, FAO will work closely with local Ministries of Agriculture, farmer organisations, gender bureaus, research institutions, and community-based agro-processing centres to transform and upgrade these value chains ensuring that they are market-driven using relevant data and facilitate public-private sector partnerships.
• The project will also increase the use of climate-smart technologies, innovations, and practices by agricultural stakeholders to make more data-driven decisions and advocate for expanding more inclusive, gender-responsive climate-resilient value chains.
• Representatives from regional partner organisations, the Caribbean Community (Caricom) Secretariat and the Organisation of Eastern Caribbean States (OECS), participating in the launch highlighted the project’s significance and its connection to the ‘Caricom 25 by 2025 Initiative’ (i.e. reducing the Region's large food import bill by 25% by 2025) and the 10-year Food and Agricultural Systems Transformation (FAST) Strategy.

(Source: Now Grenada)

• The World Bank has approved a new project to assist the Dominican Republic in promoting key institutional reforms for climate resilience, reduced water, soil, and air pollution, as well as enhanced natural resource protection.
• The Sustainable Development Policy Loan (SDPL) project valued at US$400Mn will support the government’s efforts to strengthen institutional and financing capacity for environmental protection, with important positive effects on public health and the livelihoods of communities involved in tourism and fishing activities.
• “The Dominican Republic, loses the equivalent of 0.4% of its Gross Domestic Product annually due to extreme natural hazards associated with climate change. The World Bank’s support has been and continues to be crucial in achieving our goals of building climate resilience in agriculture, ensuring food security, improving landscape and natural resource management, and addressing the challenges posed by sargassum,” stated Pavel Isa Contreras, Minister of Economy, Planning, and Development.
• The SDPL project aims to enhance the government’s institutional and financial capacity for natural resource protection, climate change adaptation, and mitigation. It will also support marine conservation, reduce air and marine pollution, and strengthen river and water body protection.
• Additionally, the project will help regulate waste management from electrical and electronic equipment and address environmental challenges such as phasing out hydrofluorocarbon substances, thereby lowering greenhouse gas emissions. Furthermore, it will help tackle the sargassum seaweed issue and establish the regulatory framework for issuing green, social, and sustainable bonds.
• Overall, these climate adaptations and mitigation policies should further reduce economic and financial vulnerabilities, boosting inclusive and resilient growth. This, supported by the existing sound fiscal policies and fundamentals of the country should keep Dom Rep’s economic outlook relatively positive over the near to medium term. Real GDP is projected to grow around 4.6% and 4.3% in 2024 and 2025, respectively after growing by an estimated 4.7% in 2023.

(Sources: The World Bank Group & NCBCM Research)

• U.S. small-business confidence and hiring plans increased in May to their highest levels of the year. However, the looming U.S. presidential election also drove uncertainty to nearly a four-year high, a survey showed on Tuesday.
• The National Federation of Independent Business (NFIB) said its Small Business Optimism Index rose eight-tenths of a point to 90.5 last month, the second consecutive month it has risen after slumping in March to the lowest level since December 2012. Despite the gain, it was the 29th straight month the index was below the 50-year average of 98. The NFIB's Uncertainty Index rose nine points to 85, the highest reading since November 2020, the month the last U.S. presidential election occurred.
• 22% of owners reported that inflation was their single most important problem in operating their business, unchanged from April. The share of businesses planning price hikes increased two points to 28%. The net per cent of owners raising average selling prices was 25%, also unchanged from April. The Federal Reserve is keenly monitoring the pace of price increases as it tries to return inflation to its 2% target.
• There were some indications that small business owners may be beginning to pull back on raising wages. A net 37% of owners reported increasing compensation, down one point from 38% in April, while 18% planned to boost compensation over the next three months, down three points and the lowest reading since March 2021.
• Small businesses have increasingly felt the pressure amidst persistent inflation and high borrowing costs. The U.S. central bank on Wednesday is expected to leave its benchmark overnight interest rate unchanged in the current 5.25%-5.50% range, where it has been since last July. The Fed has raised its policy rate by 525 basis points since March 2022 to quash elevated inflation.

(Source: Reuters)

• Sagicor Select Funds Limited (SSFunds), announced on June 7, 2024, its intention to undertake a strategic reorganisation, subject to obtaining all requisite approvals.
• The reorganisation would result in the Funds being converted into two unit trusts registered with the Financial Services Commission (FSC) and governed by the Securities Collective Investment Scheme Regulations, 2013 (the CIS Regulations). This reorganisation was discussed and approved by the Board of Directors on May 8^th, 2024, and was considered to be in the best interest of the Fund’s shareholders.
• SSFunds was incorporated on January 19, 2019, and launched two funds: SELECTF and SELECTMD. Presently, both funds are listed on the main market of the Jamaica Stock Exchange (JSE).
• From the standpoint of the Board, the stocks have consistently traded at a relatively steep discount to their NAVs ranging from 17% to 35% and 40% to 45% for the SELECTF and the SELECTMD, respectively.
• The Directors and Management of SSFunds believe that the steep discount at which the shares trade on the JSE is primarily due to the illiquid market and weak demand for the shares. Therefore, a shareholder who wishes to sell his shares in a Fund has to reduce his asking price to attract buyers.
• If the Funds were unit trusts, investors would have the option to purchase or redeem units in the unit trusts at the NAV subject to possible fees and any other restrictions. The benefit to shareholders is that the units held in the new unit trusts would be priced concerning the NAV, reflecting the underlying “real value” to investors.
• The conversion process will be undertaken as a Court-approved scheme of arrangement. However, there is no guarantee that the conversion of the investment funds to unit trusts will occur as proposed. The change is subject to shareholders voting to pass the resolution to effect conversion and the company’s successful application to the FSC for registration of the new unit trusts.
• Sagicor Select Funds Limited operates two exchange-traded investment funds; namely the Sagicor Financial Select Fund (SELECTF) and the Sagicor Manufacturing and Distribution Select Fund (SELECTMD).

 (Source: JSE)

• Honey Bun Limited (HONBUN) has announced that it has acquired the Swirls brand effective June 1, 2024.
• With this acquisition, the Company plans to enhance its product portfolio, offering a wider variety of baked goods and meals to meet the growing consumer demand.
• HONBUN currently produces several variations of over a dozen products resulting in a range of over 40 products from four brands: Honey Bun, Shorty Bread, Pickney Crackaz and Buccaneer Jamaican Rum Cakes.
• This Swirls acquisition forms part of the company’s strategy to expand its offerings to grow its business and ultimately increase shareholders’ value.

(Source: JSE & NCBCM Research)

• The Trinidad and Tobago Chamber of Industry and Commerce says it remains optimistic about the outlook for the country's economy. The T&T Chamber commented as it issued a release commending Minister of Finance Colm Imbert for his presentation of the Finance (Supplementary Appropriation) (Financial Year 2024) Bill at the Parliament on Friday, June 7.
• The proposed increase in the national budget, with significant allocations to critical sectors such as healthcare, education, infrastructure, and social services, represents a positive step towards fostering sustainable economic growth.
• The allocation of funds to support SMEs (small and medium-sized enterprises) through the SME Development Fund and the focus on digital transformation and renewable energy projects are particularly welcomed by the business community. These initiatives align with the T&T Chamber's strategic direction, the T&T Chamber's release stated.
• Additionally, the emphasis on fiscal discipline and economic reforms to reduce the national debt demonstrates a commitment to long-term financial sustainability. However, the T&T Chamber expressed concerns about the expansion of the fiscal deficit, as articulated by the Minister of Finance.
• The Chamber noted that given the shortfall between the budgeted versus actual hydrocarbon prices, there is a need for fiscal and monetary incentives that will stimulate the growth of the non-energy sectors of the economy.
• The non-energy sector has become the main driver of economic growth, while the mature energy sector continues to struggle. Given this, IMF directors in their latest staff conclusion also emphasized the importance of continued efforts to mobilize revenue, particularly from the non-energy sector. This could be achieved by stepping up the efforts to operationalize the Revenue Authority and the gambling tax along with a comprehensive Value Added Tax (VAT) reform to eliminate extensive zero-ratings, exemptions, and selective tax incentives that could yield substantial revenues.
• Overall, T&T’s economic growth is projected to gain momentum in 2024 and grow by about 2.4% up from 2.1% in 2023, supported by the non-energy sectors and to a lesser extent the energy sector.
(Sources: Trinidad Express Newspapers & NCBCM Research)

• The Bahamas government has launched a new initiative aimed at assisting companies in becoming voluntarily compliant with the taxes and fees owed to various government agencies.
• Chairman of the Government's Maritime Revenue Enhancement Task Force, Commander Bertram Bowleg, said the weeklong initiative will serve as an educational exercise and offer assistance to business owners who are not compliant with agencies such as the Department of Inland Revenue, Bahamas Customs, the National Insurance Board (NIB) and the Port Department.
• '…we are bringing all the agencies together to ensure if you have a problem with NIB, Inland Revenue, Customs or Immigration you can see them and, before you leave the exercise, we can get your problem solved 80-90%.' Bowleg said that, after this initiative closes, his unit will begin door-to-door visits to ensure companies pay outstanding fees or expired Business Licenses or risk facing penalties, legal action or the threat of being shut down.
• This is a step in the right direction for the Bahamian government as there is a strong need to improve government revenues to allow for a faster reduction in debt-to-GDP. That said, there is scope to revise existing tax preferences and exemptions, to facilitate a more progressive and efficient tax system.
• Furthermore, beyond ensuring tax compliance from privately owned businesses, rationalizing the expenditures of state-owned enterprises (SOE) would alleviate current expenditure pressures. Efficiency gains in spending and improvements in the financial management of SOEs would support debt reduction and free up resources to invest in social outcomes and infrastructure.

(Sources: Trinidad Express Newspapers & NCBCM Research)