• The Government narrowly missed its deficit target for the recently closed 2022-2023 fiscal year despite a near-$160Mn undershoot on its VAT forecast. The Ministry of Finance, unveiling its monthly report for June 2023, which also represented the fiscal year-end, disclosed that the $533.4Mn full-year deficit was just 2.5% or $12.8Mn higher than the revised target of $520.6Mn presented with the 2023-2024 Budget at end-May.
• That outcome was also some $42Mn, or 7.3% lower, than the $575.4Mn deficit target set in the original 2022-2023 Budget. The Government largely kept the latter figure, which represents the difference between its spending and revenue income, on target despite failing to achieve its VAT ambitions for the period.
• VAT, the Government’s main revenue source, accounting for almost 48% or nearly half its recurrent income, came in a material 11.3% below the 2022-2023 full-year projection of $1.412bn to stand at $1.252bn.
• As a result of this outcome, the Davis administration must now bridge a $339Mn gap between that figure and this year’s $1.591Bn forecast if it is to achieve its VAT ambitions and likely wider revenue and budgetary goals. That would amount to a 27% year-over-year increase.
• Fiscal observers suggested this was too wide a gulf to overcome, as figures for July 2023 - the first month of the current fiscal year - showed VAT revenues increasing year-over-year by just $6.8Mn from $140.1Mn the prior year to $146.9Mn.
• Based on the $339Mn ‘gap’, they added that the Government needs an average increase in VAT collections of $28Mn per month to bridge this, and July’s jump was well short of the latter figure even though it represented June’s filings and is one of four ‘bumper’ months in which all registrants - quarterly as well as monthly filers - remit taxes collected from the end consumer to the Public Treasury.
• Despite the VAT undershoot, the Government can take comfort in the fact it almost scored a direct hit on its total revenue target for 2022-2023. Total income came in just $1.5Mn below target at $2.856Bn, with taxes on international trade and transactions and other taxes on goods and services exceeding Budget targets to compensate for the VAT miss.

(Source: The Tribune)

• Despite a relatively steady inflation rate and a recent halt in price increases between September and October, the overall cost of goods and services in the U.S. remains higher than pre-pandemic levels. Gasoline prices have dropped, and food prices have plateaued, but the public perception is that prices remain elevated.
• Joe Biden's approval ratings have declined, reaching a disapproval rate of 56%, primarily due to the persistent inflationary environment. The Federal Reserve has also faced criticism, with a record 25% of respondents giving it a "poor" performance rating in a September Gallup poll.
• Despite inflation-adjusted incomes being 6% higher than pre-pandemic levels, surveys indicate a prevailing scepticism about the future. While inflation expectations have slightly decreased, they remain above the central bank's target. The public mood has shifted from general optimism before the pandemic to persistent pessimism amid rising inflation.
• The challenge for both President Biden and the Federal Reserve lies in changing public perception. The public's memory of economic challenges is slow to recede, and even positive economic indicators may not immediately shift attitudes.
• Further, if economic data continues to show a slowdown in inflation and weaker job growth, there might be an opportunity for both entities to focus on sustaining the job market and improving real incomes to regain public trust.

(Source: Reuters)

• In October, British inflation unexpectedly dropped to 4.6% from 6.7% in September. This was primarily attributed to a decrease in household energy prices and a general softening of price pressures. Following the release of the data, investors increased their expectations of future Bank of England (BoE) rate cuts.
• Finance Minister Jeremy Hunt hinted at moving to the next phase of the economic plan, focusing on the long-term growth of the British economy. He is expected to announce investment incentives for businesses in a budget update on November 22.
• Despite the decline, the BoE warns that the last phase of reducing inflation might be challenging, projecting a return to the 2% target by late 2025. Furthermore, Britain still has the highest rate of consumer price growth among Group of Seven nations, narrowly above France.
• However, with the U.S. Federal Reserve and European Central Bank seemingly reaching peak interest rates, the global economic landscape suggests a broader trend of economic slowdown and uncertainty. Investors are increasingly betting on BoE rate cuts in the coming year.

(Source: Reuters)

• DOLLA Financial Services announced that the Company has been approved as an accredited microfinance institution (MFI) by the Development Bank of Jamaica (DBJ).
• With this status, DOLLA now qualifies for funding and has been approved for a J$500 Million facility under their Micro Small and Medium sized Enterprise (MSME) Line of Credit to be disbursed and managed by Mayberry Investments Limited.
• This substantial funding marks a key strategic move for DOLLA, underlining its dedication to growth and innovation in the microfinance industry.
• This approval from DBJ not only attests to DOLLA’s financial stability and vision but also contributes to the economic landscape.
• The proceeds may be used to expand Dolla’s loan book, allowing it to bolster its revenues and ultimately its net profit.

(Source: JSE)

• The Tourism Ministry says the country is preparing for several new and inaugural nonstop flights in December.
• Commencing December 1, the new European airline, Norse Atlantic Airways, will initiate nonstop flights connecting London, the United Kingdom, and Montego Bay in St. James. Canadian airline, Jetlines is set to launch nonstop flights between Toronto, Canada, and Montego Bay starting December 9.
• Similarly, Canadian airline, Flair will introduce nonstop flights between Toronto, Canada, and Kingston, Jamaica, commencing on December 16.
• These arrivals are set to complement a series of other recent nonstop flight introductions. This influx of new flight routes reflects Jamaica’s growing popularity as a tourist destination.

(Source: Caribbean National Weekly)

• Guyana and the United States of America (U.S.) held another round of discussions on strengthening bilateral relations in security, multilateral relations, food, energy and climate change.
• In addition, on Monday, a Guyana Delegation led by the Foreign Secretary engaged in a policy dialogue with the U.S. on United Nations Security Council (UNSC) matters. The policy dialogue sought to build on the technical consultation held in Georgetown earlier this month, with a view to gaining a better understanding of each other’s priorities.
• The two sides exchanged views on several topics and regional agenda items on the Security Council. Guyana’s priorities identified for its tenure on the Council were also discussed, including food and climate security, Haiti, and Colombia.
• Both sides agreed to coordinate on areas of common interests to promote the mandate of the Security Council in maintaining international peace and security.

 (Source: Guyana Chronicle)

• Fitch Solutions revised its forecast for Panamanian real GDP growth in 2023 from 6.0% to 5.5% while maintaining its below-consensus projection for a 3.0% expansion in 2024. The downward revision comes largely in response to the significant social unrest that has broken out across Panama over the past five weeks, with impromptu roadblocks severely impeding the flow of goods and disrupting activity in the service sector.
• These protests have been focused on the Cobre Panamá copper mine, with some locals concerned about the environmental impact and others taking issue with the contract that was agreed with the mine’s operator, First Quantum.
• Production at the mine – which directly accounts for around 5.0% of GDP and 1.0% of global copper output - is temporarily suspended owing to difficulties obtaining supplies amid an ongoing blockade. 
• The Supreme Court ruled on November 28, 2023, that First Quantum’s contract with the Panamanian government was unconstitutional (The court found that it violated Panamanians’ rights to life, health, and a contamination-free environment), but it is not yet clear whether production will be halted on a more permanent basis or if activity will continue as arbitration talks continue. 
• However, Fitch’s core view for now is that operations will eventually restart in 2024, given how important the mine is for both the Panamanian economy and the public finances. The government has already temporarily suspended plans to boost pensions for lower-income households due to the loss of revenues generated from the mine.
• Risks to the outlook are considerable and include the lack of clarity surrounding the future of the Cobre Panamá following the Supreme Court's ruling that the agreement between its operator First Quantum and the Panamanian government was unconstitutional, and the lack of reliable and timely economic data in Panama.

(Source: Fitch Solutions)

• The U.S. economy experienced a faster-than-expected growth rate of 5.2% annualised in the third quarter, marking the fastest expansion since 2021. This growth was driven by increased business investments in warehouses and equipment.
• Despite the robust growth, there are signs of a slowdown. Higher borrowing costs have dampened hiring and spending, leading to a cooling of economic momentum in the final quarter of the year. Consumer spending growth was revised down to 3.6%, and there are concerns about the impact of shortages caused by the United Auto Workers strike.
• After-tax profits, as measured by S&P 500 profits, increased significantly, and personal income, driven by higher wages, contributed to the economy's growth. However, Gross Domestic Income (GDI) contracted on a year-on-year basis, raising some concerns, though it's noted that the economy has historically avoided recession with similar GDI declines.
• The report indicates that the Federal Reserve may be in a position to halt its rate-hiking campaign, as slowing demand and lower inflation create a favourable environment. Financial markets are even anticipating a potential rate cut in mid-2024, following a series of interest rate increases by the Fed since March 2022.

(Source: Reuters)

• A poll indicates that a majority of Britons, 57%, favour re-joining the European Union's single market, even if it means reinstating the free movement of workers from the EU.
• Recent polls highlight a growing sentiment that Brexit was a mistake, contrasting with the key factor of curbing immigration that drove the 2016 vote to leave the EU.
• The survey follows data revealing a record-high annual net migration to the UK, more than double the pre-Brexit figure, emphasising the relevance of immigration concerns in the public discourse. Support for single-market membership is politically divided. Among those who would vote for the opposition Labour Party, 53% support it, while only 29% of those backing the governing Conservatives favouring a return to the single market.
• Regardless of Brexit views, 72% of Britons express a desire for closer ties with the European Union, showcasing a shared sentiment for enhanced relations with the EU.

(Source: Reuters)

• Tyrone Wilson, former CEO of education and multi-media firm iCreate, says he's set to return as the company's CEO. He was re-elected to the company's board last week after resigning in August.
• Wilson added that there are several unclear and un-clarified issues surrounding his resignation to which updates will be provided.
• This comes after iCreate was suspended by the Jamaica Stock Exchange due to a lack of submission of its Audited Financials and the non-appointment of a Mentor, as required by the Junior Market Rules.

(Source: RJR News)