• The Jamaica Stock Exchange (JSE) has highlighted an increasing investor interest in the Jamaican stock market. In an interview with Radio Jamaica News, the Managing Director at the JSE, Marlene Street Forrest confirmed that more Jamaicans are looking to invest generally.
• Forrest stated that "we have seen the green sprouts already" and growth is "always a gradual process." However, she highlighted that improved interest rate conditions would generate even more interest.
• She noted that "with the knowledge that investors have in the market now, persons are just waiting a little while, biding their time in coming back to the market."

(Source: RJR News)

• The Minister of Tourism, Honorable Edmund Bartlett, has announced a historic milestone for Jamaica, with the island recording 2 million visitors in the first five months of the year. Preliminary figures show that Jamaica received 1,265,830 stopover visitors and 745,812 cruise passengers between January and May. This translates to an 8.5% increase in arrivals and USD 1.9Bn in earnings.
• The Minister, who shared the news at the launch of Reggae Sumfest, also applauded the festival’s organisers while highlighting its impact on tourism’s growth over the years. “Since 2016, Reggae Sumfest has seen approximately 175 thousand patrons, with 35 thousand being visitors. Outside of these impressive numbers, the festival injects US$20Mn annually into the local economy.
• Reggae Sumfest, initiated in 1993, is recognised as the biggest music festival in Jamaica and the Caribbean. It occurs annually in mid-July in Montego Bay. Every year, it draws thousands of local and international attendees to Jamaica's tourism hub.
• With a great start to the 2024 year, the country is poised to surpass its forecast of 4.58Mn visitors with a 9.6% increase in earnings of US$4.38Bn.

 (Source: JIS)

• At the 62^nd Bi-Annual CARICOM Central Bank Governors’ Meeting, which was held virtually and ended last Friday, May 31, the governors reaffirmed their commitment to using monetary policy tools to combat inflation, ensure financial stability, and promote efficiency and innovation in financial services delivery.
• To enhance resilience, the governors also agreed to form a region-wide central bank committee on statistics to harmonise financial data quality and availability.
• A significant portion of the CARICOM governors’ meeting was dedicated to financial system issues, with emphasis on payments market developments and opportunities for enhanced regional collaboration.
• Recognising the financial system’s competitiveness as crucial to economic prosperity, the CARICOM Central Bank governors also acknowledged common challenges faced by citizens across the region, including opening bank accounts and accessing banking services. They pledged to implement strategies and reforms to address obstacles and improve access.
• Going forward, the CARICOM governors’ technical working group on intra-regional payments will engage with the Inter-American Development Bank team on the Fully Scalable Settlement Engine, as a collaborative project.

 (Sources: Barbados Central Bank & Barbados Today)

• Peru's monthly inflation rate slowed for the second month in a row in May to 0.09%, bringing annual inflation down to its lowest level in three years, according to data published on Saturday, June 1st,  by the national statistics agency INEI.
• On a yearly basis, prices in May slowed to 2.0%, within the central bank's target range (1%-3%) and below the annual rate recorded a month prior as the country shakes off the effects of the COVID pandemic and other shocks.
• The May easing was the result of a drop in the prices of both food and non-alcoholic beverages, according to the consumer price index (CPI) for Metropolitan Lima, the inflation reference for the Andean nation.
• Core inflation - which excludes food and energy prices because of their high volatility - rose 0.16% last month.
• Annual inflation falling within the central bank target range of between 1% and 3% could help the bank maintain its monetary easing cycle. Peru's central bank reduced the key interest rate by 25 basis points to 5.75% in May, following a reduction in April and forecasts that the CPI will continue its downward trend this year.

(Source: Reuters)

• Oil prices tumbled by just under $3 a barrel on Monday to their lowest in nearly four months, as investors worried that a complicated OPEC+ output decision could lead to higher supplies later in the year, even though demand growth has been slow. Brent crude futures fell by $2.75, or 3.4%, to settle at $78.36 a barrel, closing below $80 for the first time since Feb. 7. U.S. West Texas Intermediate crude futures also closed at a near four-month low of $74.22 a barrel, down by $2.77 or 3.6% from Friday.
• OPEC+ on Sunday agreed to extend most of its oil output cuts into 2025 but left room for voluntary cuts from eight members to be gradually unwound from October onward. Analysts at Goldman Sachs said the outcome was negative for oil prices as the phasing out of voluntary cuts shows a strong desire by several OPEC+ members to bring back output despite recent increases in global oil stocks.
• "The communication of a surprisingly detailed default plan to unwind extra cuts makes it harder to maintain low production if the market turns out softer than bullish OPEC expectations," Goldman Sachs analysts said. Other analysts also called the group's decision incrementally bearish for oil prices in light of high interest rates and rising output from non-OPEC producers like the United States.
• "Ultimately, a combination of factors has come into play," independent oil analyst Gaurav Sharma said, highlighting disappointing economic indicators in the United States and China. "When OPEC+ took the decision it did over the weekend, in a reasonably well-supplied crude market, traders factored in the macro picture alongside a dwindling risk premium (with talk of a ceasefire in Gaza) and went net short," Sharma said.
• Signs of weakening demand growth have also weighed on oil prices in recent months, with data on U.S. fuel consumption in focus. The U.S. government will release estimates of oil stocks and demand on Wednesday, which will show how much gasoline was consumed around the Memorial Day weekend, the start to the U.S. driving season.

(Source: Reuters)

• U.S. manufacturing activity slowed for a second straight month in May as new goods orders dropped by the most in nearly two years, and spending on construction projects slipped unexpectedly the month before, the latest indications that a gradual slowdown in the economy is taking hold.
• The Institute for Supply Management's manufacturing purchasing managers index for May fell to 48.7 from 49.2 in April, the research group said on Monday, noting an increase in references to "softening" among survey respondents. It was both the second straight decline and the second month below the 50 level that separates growth from contraction. Economists polled by Reuters had a median estimate for 49.6.
• Meanwhile, construction spending fell unexpectedly for a second month in April on declines in non-residential activity, although there was an improvement in single-family home building. Together, the two reports pointed to continued sluggishness in the economy as the second quarter began.

 (Source: Reuters)

• Output prices for producers in the Mining and Quarrying industry, a component of the producers' price index (PPI), decreased by 1.1% for April 2024. Another PPI component, the index for the Manufacturing industry increased by 0.4% according to the Statistical Institute of Jamaica (STATIN).
• The movement in the Mining and Quarrying industry was attributed to declines in the indices ‘Bauxite Mining & Alumina Processing’ and ‘Other Mining & Quarrying’ which fell by 1.2% and 0.3%, respectively. This was mainly due to the appreciation of the Jamaican dollar vis-à-vis the United States dollar.
• The increase in the index for the Manufacturing industry was due to the rise in the index for the major group ‘Refined Petroleum Products’ of 2.0%, driven by higher crude prices on the international market.
• For April 2023 – April 2024, the point-to-point index for Mining & Quarrying industry declined by 2.6%. This resulted from a 2.8% fall in the index for the major group ‘Bauxite Mining & Alumina Processing’.
• The point-to-point index for the Manufacturing industry increased by 2.1%. Major groups like ‘Refined Petroleum Products’ (7.9%) ‘Food, Beverages & Tobacco (1.1%)’ and ‘Wood, Wood Products and Furniture’ (10.5%) contributed to this increase. However, these increases were moderated by a 2.1% decline in the index for the major group ‘Chemicals and Chemical Products.’
• 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. Geopolitical tensions in Europe and the Middle East pose risks that could disrupt the oil prices and the supply chain, resulting in higher producer costs.

(Source: STATIN)

• The Planning Institute of Jamaica (PIOJ) says growth prospects for the economy during the April to June 2024 quarter are generally positive. In this regard, the Institute is projecting an out-turn ranging between 1.5% and 2.5% for the period, relative to April to June 2023.
• “Specifically, growth during this period is expected to be driven by the continued strengthening of the mining and quarrying industry due to higher capacity utilisation at alumina refineries, increased domestic demand, due to relatively high levels of employment, and continued strengthening in the global economy, which augurs well for external demand for Jamaica’s goods and services,” said Mr. Stewart.
• Mr. Stewart disclosed that preliminary data for the June 2024 quarter indicate some positive movements that support the projection. For the mining and quarrying industry, he said data for April 2024 indicate that heavier-weighted alumina production increased by 3.7%, while crude bauxite output decreased by 43.7%.
• Additionally, preliminary data on airport arrivals for April 2024 indicate a 4 percentage points decline. The Senior Director explained that this was due to the Easter holiday being celebrated on March 31, 2024, as against April 9, 2023.
• Meanwhile, the PIOJ advised that the growth projection for the fiscal year 2024/25 is within the range of 1% to 3%, with all industries forecasted to expand. The downside risks to these projections include increased factory downtime associated with aged production plants, weather-related shocks, and lower-than-anticipated external demand for Jamaican goods and services as a result of slower-than-expected growth in the economies of Jamaica’s main trading partners

(Source: JIS)

• The Bahamas government has introduced a tax-free US$3.54Bn budget to Parliament, continuing its efforts to enhance the nation’s economic stability and growth.
• Prime Minister Davis highlighted that the estimated revenue for the budget excludes a US$75Mn reimbursement from the Grand Bahama Port Authority (GBPA), noting that the total amount due from the GBPA is US$357Mn. The total expenditure is projected at US$3.61Bn, with recurrent expenditure accounting for US$3.27Bn and capital expenditure for US$344.5Mn.
• The government’s revenue philosophy focuses on lowering the overall tax burden for ordinary Bahamians while improving tax efficiency and enforcement. Consequently, the new budget does not introduce any new taxes but includes adjustments to fees for government services where costs have increased.
• Further, since prioritising tax efficiency, the revenue-to-GDP ratio has increased from 18.7% at the start of the administration’s first term to 20.4% in the 2022-23 fiscal year. The government aims to achieve a medium-term revenue target of at least 25% of GDP.
• The fiscal deficit is estimated at US$69.8Mn, or 0.5% of gross domestic product (GDP), while the primary balance shows a surplus of US$586.9Mn, or 3.9% of GDP. The debt-to-GDP ratio is projected to be 75.3% by the end of the 2024-25 fiscal year.
• Further, Prime Minister Davis announced the official launch of Cloud Bahamas, a new Government Enterprise Resource Planning (ERP) Application designed to modernize public service operations. This ERP system is set to improve financial reporting, including a public sector income statement and balance sheet, and will be fully implemented by January 2025.
• Davis said that the fiscal package prioritizes enhancing the well-being of Bahamians and creating opportunities, increasing revenue from foreign direct investment, addressing Value-Added Tax (VAT) underperformance on real estate transactions, and developing an equitable and competitive business environment. He also shared that supporting new opportunities for Bahamians and incentivising participation in a growing economy remain key policy priorities for the government.

 (Source: Caribbean News Weekly)

• After a soft 0.7% Gross National Product (GNP) growth rate for FY 2023, Fitch Solutions forecast that real GNP will grow by 1.8% in 2024; primarily driven by stronger private consumption and investment growth, supported by resilient US demand.
• Notably, Fitch has revised its FY2024 real GNP forecast (FY2024: July 2023 – June 2024) up from 1.0% previously, to 1.8%, as tailwinds from a resilient US economy continue to support strong growth.
• While the Puerto Rican government has not updated its monthly economic indicator for Puerto Rico beyond December 2023, other high-frequency indicators continue to point to a historically strong labour force which is boosting aggregate household incomes.
• The unemployment rate remains at historic lows of 5.7% as of February 2024, while the labour force participation rate remains strong at 44.5%. Fitch forecasts that the unemployment rate will end FY 2024 at 5.9% and average the same for the entire fiscal year.
• That said, Fitch expects weaker growth in FY 2025, growing only 0.3%, as the momentum in the US economy slows, posing headwinds for the Puerto Rican economy.
• Risks are skewed to weaker growth in H2 2024 particularly due to elevated environmental risks stemming from the start of the hurricane season.

(Source: Fitch Solutions)