• Updated economic projections from Federal Reserve officials this week are expected to show fewer interest rate cuts than policymakers anticipated three months ago, faster-than-expected inflation, and slower growth. This pinpoint economic outlook will carry the weight of the U.S. central bank's authority.

• With their forecasts stymied last year by faster economic growth and lower inflation than expected, and now by higher inflation and slowing growth, Fed officials of late have supplemented discussion of their outlook with the top alternate paths they think the economy may follow.

• Both a nod to what they don't know and a way to keep public expectations more fluid, it's a strategy Powell may well follow in his press conference after the end of a two-day policy meeting on Wednesday. This strategy could redirect focus from the new Summary of Economic Projections and its market-shaping plot of where officials think the policy interest rate is heading, with a focus on the median.

• Since the end of last year, precision has not been the Fed's ally as officials appeared to lock in three rate cuts for the year, only to be side-swiped by inflation that didn't decline as expected. As a result, they'll likely revise their outlook to just two quarter-percentage-point rate reductions for the year or perhaps just one, with doubts even around that.

• The U.S. Labor Department will publish new inflation data on Wednesday, just hours before the 2 p.m. EDT (1800 GMT) release of the Fed's updated projections and new policy statement. Powell's press conference will follow at 2:30 p.m. EDT. The central bank, which aggressively raised rates in 2022 and 2023 to combat a surge in inflation, is widely expected to keep its benchmark interest rate in the 5.25%-5.50% range that was set last July.
(Source: Reuters)

• European Central Bank interest rates are not on a linear downward path and policymakers could at times wait more than one meeting before cutting them again, ECB President Christine Lagarde said in a newspaper interview. The ECB cut rates from a record high last week but held off committing to more policy easing given stubbornly high wage growth and yet another increase in inflation projections.
• "We’ve made the appropriate decision, but it doesn’t mean interest rates are on a linear declining path," Lagarde told several major European newspapers in a joint interview. "There might be periods where we hold rates again."
• When asked if this meant the ECB could hold rates for longer than a single meeting, she said "it's a possibility". Markets now expect little more than one rate cut over the four meetings left this year and see between 3 and 4 reductions through the end of 2025, so in the next 12 policy meetings.
• While Lagarde did not explicitly say the ECB would hold interest rates at their current level in July, she argued that further cuts depended on a slew of wage and corporate profit indicators, which only become available closer to the bank's September meeting. "We will need more data, including on wages, on how unit profits are growing and absorbing part of the labour costs, and on productivity," she said.
• Still, Lagarde argued against explicit commentary given the uncertainty and likely bumps in the path of inflation. "Forward guidance has not been helpful," Lagarde said. "Time-dependent guidance is currently not helpful."

(Source: Reuters)

• Pan Jamaica Group Limited has announced the successful divestiture of Grupo Alaska S.A., a prominent ice and bottled water producer in the Dominican Republic, which is owned by Grupo Frontera, a joint venture equally held by Pan Jamaica and Norbrook Equity Partners Limited.
• Grupo Alaska S.A., with its manufacturing and distribution operations in Santo Domingo and Punta Cana, and a workforce exceeding 300 individuals, has been acquired by Diesco Industries Limited, an international entity with a regional emphasis on the bottled water sector.
• Currently, Panjam is actively in search of other opportunities as the company has proven the concept of using acquisition to secure other opportunities in strategic markets. The Group has also announced the acquisition of APA Processing BZ, S.L.U. ('APA'), a fresh juice processing facility in Barcelona, Spain, which will be managed by the Group's joint venture juice company, CoBeverage Lab S.A.
• The acquisition of APA is anticipated to enhance the high-pressure processing capabilities of the Group's Pan-European juice division, The Juicy Group, which operates facilities in Spain, Belgium, and the Netherlands.
• The Juicy Group provides a diverse selection of cold-pressed fresh juices and employs cutting-edge ultra-fresh and high-pressure processing technologies across all its operations.
• The acquisition is expected to add about 10% to the company’s juice output, ultimately boosting the company’s revenues.

 (Sources: JSE & NCBCM)

• Minister of Tourism, Hon. Edmund Bartlett, left Jamaica for Europe this week to participate in various high-level events aimed at enhancing Jamaica's standing in the worldwide tourism sector.
• Minister Bartlett is set to participate in two notable events: the Resilience and Innovation Summit, organized by the Global Travel and Tourism Resilience Council in Sarajevo, Bosnia and Herzegovina, and the 121st UN Tourism Executive Council Meeting, which will take place in Barcelona, Spain.
• Before his departure, the tourism minister emphasized that his attendance at the Resilience and Innovation Summit highlights Jamaica's dedication to developing a stronger and more resilient tourism sector.
• “The COVID-19 pandemic exposed the vulnerabilities of our industry globally,” said Minister Bartlett. “However, it also presented an opportunity to rebuild in a more resilient way. Innovation is key to this process, allowing us to develop new strategies, and cutting-edge technologies, and adapt to evolving market demands,” he added.
• Minister Bartlett will deliver the keynote address on how innovation cements resilience. “By fostering a culture of creativity and embracing new ideas, we can ensure that the tourism industry is prepared to navigate future shocks and thrive in the years to come,” he emphasised.

 (Source: JIS)

• Attorney General Anil Nandlall told the Caribbean Financial Action Task Force (CFATF) that Guyana would amend its extradition laws to allow for “easy” extradition of persons to and from the US.
• To bolster international cooperation in legal matters, Guyana is poised to enact comprehensive amendments to its extradition laws, making extradition easier to and from the country, particularly with the United States, Nandlall expressed at the CFATF 58th Plenary and Working Group Meetings in Trinidad on June 4, 2024.
• In Guyana, economic hardship for segments of the population, institutional weaknesses, criminal justice inefficiencies, as well as racial fractures in society provide fertile grounds for corruption. Furthermore, the scale of the informal and illegal economy is particularly notable, as it breeds criminal activities such as drug and human trafficking or illegal logging that are strongly associated with corruption and coercion.
• The amendments, particularly clause two of the Bill, aim to expand the admissibility of evidence in extradition cases. This includes documents, statements, or other evidence that identify and locate the person sought, a statement of facts of the case, and the legal provisions related to the offence and its punishment.
• In recent years, the US has commended Guyana for facilitating the capture and extradition of a number of persons from Guyana to the US. At least one person had been extradited from the US to face a murder charge in Guyana, but the charge was eventually dismissed.
• The amendments to the current extradition laws create a model for future bilateral cooperation that should reduce Guyana’s attractiveness as a haven for criminals in the sovereign. That said, the sovereign still has a long way to go to counter international crime with the need to strengthen the integrity and capacity of Guyana’s criminal justice system.
• Guyana ranks 87 of 180 countries on Transparency International’s Corruption Perception Index for 2023. Its score improved marginally from 39 in 2021 to 40 in 2022 and 2023. That said, at a rank of 87, Guyana has moderately higher levels of perceived corruption when compared to peers like Trinidad (76), Jamaica (69), and Barbados (24) but fairs better than the Dominican Republic (123) and Mexico (126).

(Sources: Guyana Chronicle & NCBCM Research)

• President Luis Abinader has announced that the country has achieved its best export figures in the last three years, with a total increase of 23% compared to the period from 2016 to 2019.
• The president attributed this success to the National Export Promotion Plan (PNFE), which was launched in November 2020 to promote exports and improve competitiveness in global markets.
• Despite the challenges posed by the pandemic and international trade tensions, the Dominican Republic has managed to increase its exports by 23% since 2020, with a total value of $45.804Mn. The country’s main export partner is the United States, accounting for 54.38% of total exports, followed by other major destinations such as Argentina, China, and Japan.
• The president highlighted the growth of medical instruments and devices as a key sector. He also emphasised the importance of promoting women’s participation in the national productive process and their incorporation into international business activities.
• The PNFE has been implemented consensually and coherently, incorporating the perspectives and proposals of national and international institutions, companies, associations, and organisations involved in productive and export development. The plan has been recognised as a benchmark in good international practices and has positioned the Dominican Republic as a world-class logistics hub.
• The government has also implemented various initiatives to promote exports, including the modernization of the General Customs Law, the lifting of impediments to the entry of Dominican products to international markets, and the migration to non-face-to-face channels in the provision of services.

(Source: Dominican Today)

• Saudi Arabia and allied oil producing countries on Sunday extended output cuts through next year, a move aimed at supporting slack prices that haven’t risen even amid turmoil in the Middle East and the start of the summer travel season.
• The OPEC+ alliance, made up of members of the producer's cartel and allied countries, including Russia, extended three different sets of cuts totalling 5.8Mn barrels a day. International benchmark Brent has loitered in the US$81.0 to US$83.0 per barrel range for the past month.
• Even the war in Gaza and attacks on shipping in the Red Sea by Houthi rebels in Yemen have not pushed prices up toward the US$100.0 per barrel level last seen in September 2022. Reasons include higher interest rates, concerns about demand due to slower than desired economic growth in Europe and China, and rising non-OPEC supply, including from United States shale producers.
• Yet the Saudis need higher oil prices to fund ambitious plans by Crown Prince Mohammed bin Salman to diversify the country’s economy away from fossil fuel exports. Analysts say the cuts could push oil prices higher in coming months, but much depends on demand for oil going forward. The summer usually sees a spike in demand through the July-September quarter, but uncertainty about demand grows after that.
• The cuts that are being extended break down as follows: two billion barrels a day agreed among all 23 OPEC+ members were extended through the end of 2025, according to an OPEC statement; then, voluntary reductions of 1.65Mn barrels a day by a smaller group of members was extended until end 2025 as well, according to a report on the official Saudi Press Agency.

(Source: Reuters)

• The European Central Bank cut borrowing costs from record highs on Thursday, acknowledging progress in its battle against high inflation but also signaling that the fight had yet to be won as inflation was set to remain too high until next year.
• Inflation in the 20 countries that share the euro has fallen from more than 10.0% in late 2022 to just above the ECB's 2.0% target in recent months, largely thanks to lower fuel costs and a normalisation in supply after some post-pandemic snags. As a result, the ECB welcomed the fall in price growth as it trimmed its deposit rate to 3.75% from a record 4.0%, its first cut since 2019.
• However, that progress has stalled recently, and what had looked like the start of a major ECB easing cycle only a few weeks ago now appears more uncertain due to signs that eurozone inflation may prove sticky, as has been the case in the United States. It also raised its inflation forecasts for this year and the next stressed any further rate reduction would depend on incoming data, and reaffirmed that borrowing costs needed to remain high enough to keep a lid on prices.
• "Despite the progress over recent quarters, domestic price pressures remain strong as wage growth is elevated, and inflation is likely to stay above target well into next year," the ECB said. Money market investors trimmed their bets on rate cuts after the announcement and only priced in one, with a slight risk of a second, for the remainder of the year.
• Some stronger-than-expected data about eurozone inflation, wages, and economic activity over the last few weeks has fuelled fears of a more difficult "last mile" on the way to the ECB's goal - a concern often expressed by influential board member Isabel Schnabel.
• Inflation in services, which some policymakers have singled out as especially relevant because they reflect domestic demand, has been a particular concern after it rebounded to 4.1% in May from 3.7% a month earlier. Most economists still expect the ECB to continue cutting its policy rate in the coming months and bring it to 2.50% by the end of 2025.

(Source: Reuters)

• Wigton Windfarm Limited (Wigton) announced that it established a new brand, and registered the business name ‘Wigton Energy’. This was done to adopt a brand identity that directionally aligns with its vision and plans to diversify its business into other areas of energy and profitable investments. However, Wigton Energy is only a registered business name. Wigton’s registered name and trading name on the Jamaica Stock Exchange (JSE) remain Wigton Windfarm Limited.
• While Wigton is the largest wind energy facility in the English-speaking Caribbean, it plans to diversify into other areas of renewables, including clean technology solutions and other investment opportunities, to ensure continued growth in shareholders’ value. The new Wigton Energy brand aligns with the company’s diversification strategy.
• On February 16, 2024, there was an Addendum to Wigton’s Power Interchange Agreement with the Jamaica Public Service Company Limited (JPS), to extend the period of operation of its Wigton Phase I plant for another 3 years to April 2027^[1]. With the agreement set to expire in 3 years, diversifying Wigton’s business is critical to business continuity.
• To steer the company into this new strategic direction, Wigton recently recruited Mr. Gary Barrow as Chief Executive Officer and appointed Ms. Michelle Chin Lenn as Deputy Chief Executive Officer. Mr. Barrow has 30 years of leadership experience in the telecommunications/energy sector and was a former Chief Operating Officer of JPS. Ms. Chin has 17 years of experience on Wigton’s Management team and was Head of Energy.

 (Source: JSE & NCBCM Research)

^[1] The extension for another three (3) years is as of April 1, 2024.

• As preparations ramp up for the highly anticipated 10th Biennial Jamaica Diaspora Conference, seasoned professionals in the real estate sector are extending a compelling invitation to Jamaicans abroad to Invest in Jamaica’s burgeoning real estate market.
• Newton Johnson, President of the Realtors Association of Jamaica (RAJ), and Petal Hall, Group Sales Executive at The Jamaica National Group and Realtor Associate with JN Properties Limited, are advocating for this timely opportunity despite recent shifts in mortgage rates.
• Johnson and Hall underscore the opportune time for overseas Jamaicans to invest in the local real estate market. Even with the recent increase in mortgage rates, they maintain that Jamaican property investments offer considerable return potential.
• Johnson points out four main factors that favour such investments, particularly noting the significant capital growth seen in the Jamaican real estate sector. He highlighted Jamaica’s stable political and economic landscape, and the predictability it offers to investors, versus regions affected by conflicts that often lead to economic downturns. Johnson also spoke to the stability of Jamaica's inflation rates, which is vital for sustained economic growth, and the competitive prices of Jamaican real estate relative to other Caribbean locations, increasing its appeal to investors.
• As discussions on Jamaica’s real estate sector gain momentum, Johnson and Hall invite participants to explore further insights at the upcoming Biennial Jamaica Diaspora Conference.

(Source: Caribbean National Weekly)