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The World Bank Supports The Dominican Republic In Its Efforts To Improve Disaster Risk Response Published: 09 December 2022

  • The World Bank’s Board of Directors today approved a US$230Mn Development Policy Loan with a Catastrophe Deferred Drawdown Option (Cat-DDO) to support the Dominican Republic’s disaster risk management efforts. Cat-DDO can be quickly disbursed to respond to a natural disaster or health-related event.
  • The programme seeks to improve the government’s capacity to strengthen disaster preparedness, response, and recovery, benefiting the Dominican population, especially the most vulnerable segments.
  • The Government of the Dominican Republic has called for major reforms to improve disaster risk management and climate change adaptation, with an emphasis on improving preparedness and planning with timely information, as well as on limiting the fiscal and economic impact of disasters on the most vulnerable households. This new World Bank Cat DDO loan, following the one that closed last year, reveals the urgency of these reforms
  • These reforms include the implementation of the first fiscal strategy for disaster risk management, strengthening of land use regulations to guarantee better planning, safer housing and construction, improved geospatial information (essential for risk assessment), and increased adoption of emergency mitigation and social protection measures.
  • Of note, The Dominican Republic ranked 32 out of 181 countries on the Bündnis Entwicklung Hilft Global Risk Index 2021. This high exposure to disaster risk can result in significant economic impacts. The occurrence of extreme weather events underscores the need for urgent measures to strengthen the country’s resilience and adaptation in an inclusive manner

(Source: Dominican Today)

Brazil’s Federal District To Improve Fiscal Management With $72.7Mn IDB Loan Published: 09 December 2022

  • Brazil’s Federal District will modernize its fiscal management while enhancing its tax administration and public expenditure management with the help of a $72.7Mn loan approved by the Inter-American Development Bank (IDB). The loan has a 24.5-year term and a 6-year grace period, at an interest rate based on the Secured Overnight Financing Rate (SOFR).
  • The financing is part of the $900Mn Fiscal Management Modernisation (PROFISCO II) programme, which was approved in 2017 to digitally transform and modernize fiscal management in Brazil’s 26 states and the Federal District.
  • Most of the funds ($40Mn) will be used to upgrade technological infrastructure by creating data storage and processing platforms, establishing an IT park, training staff on new technologies, implementing data cybersecurity systems, and using artificial intelligence to serve taxpayers, among other initiatives.
  • Another $21Mn of the new loan is designed to streamline tax collection, raise revenues, and simplify tax compliance, while the project will allocate almost a quarter of its resources to help mitigate climate change.

(Source: Caribbean News Global)

Manufacturing Orders From China Down 40% in Unrelenting Demand Collapse Published: 09 December 2022

  • S. logistic managers are bracing for delays in the delivery of goods from China in early January as a result of cancelled sailings of container ships and rollovers of exports by ocean carriers.
  • Carriers have been executing an active capacity management strategy by announcing more blank sailings and suspending services to balance supply with demand. “The unrelenting decline in container freight rates from Asia, caused by a collapse in demand, is compelling ocean carriers to blank more sailings than ever before as vessel utilization hits new lows,” said Joe Monaghan, CEO of Worldwide Logistics Group.
  • S. manufacturing orders in China are down 40 per cent, according to the latest CNBC Supply Chain Heat Map data. As a result of the decrease in orders, Worldwide Logistics tells CNBC it is expecting Chinese factories to shut down two weeks earlier than usual for the Chinese Lunar New Year — Chinese New Year’s Eve falls on Jan. 21 next year. The seven days after the holiday are considered a national holiday.
  • Supply chain research firm Project44 told CNBC that after reaching record-breaking levels of trade during the pandemic lockdowns, vessel TEU (twenty-foot equivalent unit) volume from China to the U.S. has significantly pulled back since the end of summer 2022 — including a decline of 21% in total vessel container volume between August and November.
  • HLS analysts are predicting a further 2.5% decline in container volumes and a nearly 5-6% increase in capacity in 2023, which will continue to negatively impact freight rates in 2023.

(Source: Reuters)

Bank of England Set To Raise Rates To 3.5% After Inflation Hits 41-Year High Published: 09 December 2022

  • The Bank of England looks set to raise interest rates to 3.5% or more next week, but policymakers appear increasingly split on how much tightening is needed to tame double-digit inflation as the economy heads into recession.
  • Financial markets currently price in a 78% chance that the BoE will raise rates by half a percentage point to 3.5% on Dec. 15, and a 22% chance of a rise to 3.75%. The market is currently expecting BoE rates to peak at 4.75% by the middle of next year, while HSBC expects the BoE to stop at 3.75% in February and Investec predicts a peak of 4%.
  • The central bank's immediate concern is British consumer price inflation, which hit 11.1% in October, the highest reading since 1981 and more than five times the BoE's 2% target, up from 4.2% a year earlier.
  • While much of the increase has been driven by higher energy prices following Russia's invasion of Ukraine, the BoE fears labour shortages and other bottlenecks caused by the COVID-19 pandemic and Brexit could make inflation slow to fall.
  • On Nov. 3, the BoE estimated Britain had entered a recession that would last until the end of next year and shrink output by 1.7% - a bigger drop than more recent forecasts, and one which partly reflects elevated market rate expectations at the time the forecasts were made.

(Source: Reuters)

Bright Outlook for Cruise Shipping Season   Published: 06 December 2022


  • Executive Director of Jamaica Vacations (JamVac), Joy Roberts, says the 2022/2023 cruise shipping season will see a major turnaround for Jamaica, following the setbacks caused by the COVID-19 pandemic.
  • The Wonder of the Seas, the world’s largest cruise ship, made its inaugural visit at Falmouth port on December 1. Roberts indicated that the visit by the nearly 9,000-passenger Royal Caribbean flagship vessel is just a prelude to the return of normality in the cruise sector.
  • For starts, 2022 going into 2023 will see Royal Caribbean sending their huge Oasis-class vessels, such as Wonder of the Seas, Symphony of the Seas and Harmony of the Seas to Jamaica,” she noted. “These are the three biggest ships in the world and sending them here tells you about the confidence the cruise line has in our cruise shipping sector and the products we have to offer,” she added. 
  • Overall, these are positive developments which will ultimately boost cruise arrivals and contribute towards Jamaica's total tourist arrivals returning to pre-pandemic levels in 2023.

(Source: JIS)

Domestic Crop Production on Course for Record Growth Published: 06 December 2022

  • The agriculture sector is on target to meet or surpass last year’s historic high domestic crop production figures as indicated by the Minister of Agriculture and Fisheries, Hon. Pearnel Charles Jr. He highlighted that now is a good time to invest in the country’s agriculture sector and is urging members of the Jamaican diaspora who have land in the country to put them into production.
  • “We have looked at the numbers, the policies and the legislative changes, and we can present to investors a clear picture that now is the best time for you to invest.”
  • The Government has invested in the development of agriculture, with $1 billion allocated to an incentive programme to support farmers as well as funding to create infrastructure for irrigation, conduct soil fertility mapping, and improve genetic breeding for small ruminants, among other things.
  • With additional private sector investments to take advantage of the legislative adjustments and government investments, the agricultural sector should be able to increase its contribution to GDP. 

(Source: JIS)

Chilean, Peruvian Central Banks To Refrain From Hiking Further In December Published: 06 December 2022

  • Fitch Solutions will closely monitor the decisions of the monetary policy committees of the Banco Central de Chile (BCC) and Banco Central de Reserva del Perú (BCRP). Both central banks are expected to refrain from hiking beyond their current rates of 11.25% and 7.25%, respectively, as headline inflation moderates and inflation expectations fall.
  • However, Chile is the only market in the region where core inflation has also notably eased, from 11.1% y-o-y in September to 10.8% in October, underscoring Fitch’s view that the 1,075 basis points (bps) worth of hikes the BCC has enacted since July 2021 are beginning to temper price pressures.
  • In addition, Fitch estimates a softening in the growth outlook for Chile with a contraction of 0.8% estimated in 2023 – reinforcing the view that the BCC will opt not to hike further, to prevent a deeper decline in activity.
  • For Peru, Fitch expects that the BCRP will hold rates at 7.25% at its December 7 meeting, a twenty-one-year high. Notably, after hiking by 700bps since August 2021, one-year forward Inflation expectations have continued to tick down, reaching 4.8% in October.
  • Consequently, as inflation expectations fall nearer to the BCRP's 1.0%-3.0% inflation target, Fitch expects the BCRP will refrain from hiking further and hold its interest rate at 7.25% through H1 2023.

(Source: Fitch Solutions

Mexico's Inflation Seen Slowing Pace In November, Ahead Of Cbank Decision Published: 06 December 2022

  • Mexico's headline inflation likely continued to slow in November, a Reuters poll showed Monday, opening the door for the Bank of Mexico to opt for a less aggressive interest rate hike at its Dec. 15 monetary policy meeting. Analysts attributed the expected ease in inflation largely to the impact of pre-Christmas offers and discounts known as "Buen Fin" on some goods and services.
  • Nonetheless, annual core inflation, which strips out some volatile food and energy prices, was forecast to hit 8.58%, a level not seen since August 2000, which remains a key concern for Banxico.
  • Banxico, which has an inflation target of 3%, plus or minus one percentage point, has since its current monetary policy tightening cycle began in June 2021 increased the benchmark rate by 600 basis points to its current level of 10%.
  • Private sector analysts anticipate Banxico will hike its key rate by 50 basis points at the Dec. 15 meeting, slowing the pace following four consecutive 75 basis points rate increases.
  • In November alone, Mexican consumer prices are set to have grown by 0.70% from the previous month, while the median projection for monthly core inflation was seen at 0.52%.

(Source: Reuters)

Beijing Drops COVID Testing Burden As Wider Easing Beckons Published: 06 December 2022

  • Residents of China's capital were allowed into parks, supermarkets, offices and airports without a negative COVID-19 test on Tuesday, Dec. 6, the latest in a mix of easing steps nationwide after unprecedented protests against a tough zero-COVID policy.
  • Authorities have been loosening some of the world's toughest COVID curbs to varying degrees and softening their tone on the threat of the virus, in what many hope could herald a more pronounced shift towards normalcy three years into the pandemic.
  • As they waited for news, some people, wary the virus might now spread faster, rushed to buy COVID antigen kits and fever medicine and market regulators issued warnings against hoarding and hiking prices.
  • Both of the city's airports also no longer require people to test to enter the terminal, state media reported, although there was no indication of a change to the rule for a negative test before boarding a flight.
  • The loosening of the rules comes after a string of protests last month that marked the biggest show of public discontent in mainland China since President Xi Jinping took power in 2012.
  • China may announce 10 new easing measures as early as Wednesday, Dec. 6, two sources with knowledge of the matter told Reuters. The prospect of relaxation has sparked optimism among investors that the world's second-biggest economy would regather strength and help to boost global growth.

(Source: Reuters)


Britain's Grocery Inflation Falls For First Time In 21 Months –Kantar Published: 06 December 2022

  • British grocery inflation edged lower in November, the first decline in nearly two years, but remained near record highs, providing little relief for consumers ahead of the key Christmas trading period, industry data showed on Tuesday, Dec. 6.
  • Market researcher Kantar said grocery inflation in the four weeks to Nov. 27 was 14.6%, down 0.1 percentage points from October's record high, marking the first fall in 21 months.
  • "Grocery inflation still has a long way to come down though, and based on the current rate, shoppers will have to spend an extra 60 pounds ($73) in December to buy the same items as last year," Fraser McKevitt, Kantar's head of retail and consumer insight said.
  • Prices are rising fastest in markets such as milk, dog food and butter, said Kantar. It highlighted more evidence of the coping strategies shoppers are adopting to mitigate rising costs, with own-label sales now up 11.7% year-on-year and sales of the cheapest value own-label lines up 46.3%.

(Source: Reuters)