• A new round of price cuts by major U.S. retailers and data showing a consumer spending slowdown may boost the Federal Reserve's confidence in falling inflation and take the edge off corporate profits that have grabbed a larger share of national income since the start of the COVID-19 pandemic.
• The Commerce Department reported on Thursday that the U.S. economy grew more slowly than initially thought, expanding at a 1.3% annual rate over the first three months of the year versus an initial estimate of 1.6%.
• Much of the change came from a lowered pace of consumer spending, indicating a core prop of the economy may be slowing in line with Fed officials' expectations. Fresh inflation data will be released on Friday, with economists polled by Reuters expecting the personal consumption expenditures price index to have risen at a 2.7% annual rate in April, matching the gain in March.
• Fed officials have said they feel consumers are in broadly good shape with unemployment low and wages rising. But they've also noted signs of stress among lower-income households, including rising loan default rates and credit card borrowing.
• The price cuts announced this month may show that same sense taking hold in corporate executive suites and touching off the dynamic Fed policymakers expected would eventually take hold: A fight for market share as pandemic-era pricing power wanes, along with the elevated profits that followed it.
• Fed officials in recent weeks have said they think the landscape has shifted, with businesses generally saying their capacity to raise prices is diminished compared to the last two years. In the Fed's most recent "Beige Book" collection of anecdotes about the economy, there was a widespread sense of consumers becoming more selective and putting pressure on firms.

(Source: Reuters)

• Eurozone inflation rose in May, data showed on Friday, in a sign the European Central Bank still faces a slow and uncertain journey to reach its goal of fully reining in prices. The bigger-than-expected increase in inflation is unlikely to stop the ECB from lowering borrowing costs from a record high next week but may cement the case for a pause in July and a slower pace of interest rate reductions in the coming months.
• Consumer prices in the 20 countries that share the euro rose by 2.6% year-on-year in May, inching away from the ECB's 2.0% target after increases of 2.4% in the previous two months, according to Eurostat's flash estimate. Economists polled by Reuters had anticipated inflation would rise to 2.5%, fuelled in part by an unfavourable comparison to last year when Germany had subsidised rail travel, among other one-off factors.
• ECB policymaker Fabio Panetta, the governor of the Bank of Italy, said the latest reading was neither good nor bad as he reaffirmed his view that the central bank could cut rates several times. More significantly, a closely watched measure of underlying inflation that excludes food, energy, alcohol and tobacco came in at 2.9% from 2.7% in April.
• Prices in the services sector, which some policymakers have singled out as especially relevant because they reflect domestic demand, rebounded to 4.1% from 3.7%. This was likely to mirror larger-than-expected wage increases in the first quarter of the year, which have boosted consumers' battered disposable income after years of below-inflation pay hikes.
• Markets are currently pricing around 57 basis points of ECB rate cuts in 2024, indicating a 25-basis point cut in June, and one more by year-end.

(Source: Reuters)

• The Planning Institute of Jamaica (PIOJ) reports that the economy grew by an estimated 1.9% from January to March 2024. Speaking during the PIOJ’s quarterly briefing on Tuesday (May 28), Senior Director of the Economic Planning and Research Division, James Stewart, said the outturn represents the 12th consecutive quarter of growth.
• The performance for the review period largely reflected increased external demand, higher levels of business and consumer confidence, increased agricultural output, and continued expansion in capacity utilisation at alumina refineries.
• Stewart indicated that a contraction in the construction industry tempered further economic growth. Regarding real-sector developments, the goods-producing industry grew by an estimated 3.0%, driven by improved performances in three of the four industries – agriculture, forestry and fishing, mining and quarrying, and manufacturing.
• He highlighted that the output of the agriculture, forestry and fishing industry was estimated to have increased by 7.7%. The industry’s performance reflected favourable weather conditions, facilitated by higher production levels, relative to the corresponding quarter of 2023 when drought conditions impacted the industry.
• The mining and quarrying sector was estimated to have grown by 24.8% due to increased alumina and crude bauxite output. Regarding manufacturing, Mr. Stewart advised that the industry grew by 2.0%, due to estimated growth in the ‘Food, Beverages and Tobacco’ and ‘Other Manufacturing’ sub-industries.
• Meanwhile, real value added for the construction industry fell by 4.5%, reflecting a downturn in the ‘Building Construction’ component, which outweighed an estimated growth in the ‘Other Construction’ component.

• The Development Bank of Jamaica Limited (DBJ) plans to intensify efforts to provide support for the divestment of government-owned assets during the fiscal year 2024/25, primarily by facilitating private investment through the transparent execution of Public-Private Partnerships (P4) and privatisations.
• Details of the programmed engagements are outlined in the Jamaica Public Bodies Estimates of Revenue and Expenditure for the Fiscal Year ending March 2025. Emphasis will be placed on expediting transaction management and execution processes to ensure effectiveness and efficiency.
• The DBJ will systematically implement supplementary initiatives in line with its mandate, encompassing policy development, capacity building, and strategic monitoring of the programme. Several privatisation initiatives are currently underway or in the planning stages. These ventures include Braco Village Resorts, Jamaica Mortgage Bank, Montpelier (Agriculture Lands), White Marl Complex, Nutrition Products Limited, and the Agriculture Marketing Corporation.
• Additionally, there are prospects in the P4 category, such as the Soapberry Wastewater Treatment Plant and National Solid Waste Management projects. The entity also plans to enhance the micro, small, and medium-sized enterprises (MSME) ecosystem by providing essential offerings such as credit guarantees, debt financing, equity financing, and institutional capacity building.
• This multifaceted strategy aims to boost business development and alleviate concerns regarding access to finance that currently impede the growth of the Micro, Small and Medium-size Enterprises (MSME) industry. The Bank’s efforts are expected to attract investments totalling approximately J$40.9 billion, with loan disbursements reaching some J$9.2 billion.
• The entity also plans to enhance the micro, small, and medium-sized enterprises (MSME) ecosystem by providing essential offerings such as credit guarantees, debt financing, equity financing, and institutional capacity building. This multifaceted strategy aims to boost business development and alleviate concerns regarding access to finance that currently impede the growth of the Micro, Small, and Medium-size Enterprises (MSME) industry. To strengthen these initiatives, the DBJ plans to provide both loans and capacity-building support.

(Source: JIS)

• The Central Bank of Bahamas has launched a long-awaited campaign to drive increased use of digital and online banking services by Bahamian businesses and households.
• The banking regulator, teaming with the commercial banks and private sector, unveiled its ‘Pay fast, Live digital’ campaign that will be piloted first in New Providence and then expanded to Grand Bahama and the Family Islands over the coming months.
• Denise Turnquest, Commonwealth Bank’s president and head of the industry body, the Clearing Banks Association, said the initiative will help clients who have yet to embrace digital banking become more comfortable with the transition and is not part of, or intended to achieve, the elimination of cheques as a form of payment.
• Businesses will also be educated on the cost and benefits of using digital payments versus cheques. Notably, emphasis will be set on how to do a more holistic cost-benefit analysis on digital payments versus cashing cheques, particularly around issues such as accounting and record keeping, physical safety and handling fraud.
• Further, Denise Turnquest, Commonwealth Bank’s president and head of the industry body, the Clearing Banks Association, noted that “Though the theme for this launch is ‘Pay fast, Live digital’, the future of pay is digital, but I want to allay any concerns that you may have around cash being eliminated. Of course, we are also investing heavily in ATMs and the ability for you to get access to cash without having to see a teller, and so we want you to rest assured that we will leave no one behind”.

 (Source: The Tribune)

• As part of its commitment to achieving low-carbon development goals, the Government of Guyana has been actively promoting renewable energy investments. This initiative has seen more companies transition from fossil fuels to renewable energy sources.
• Among the private sector leaders in this shift is ActionINVEST Caribbean Incorporated (ACI), which has significantly enhanced its sustainability practices. ACI has retrofitted its headquarters with a solar photovoltaic (PV) system and has begun using electric vehicles (EVs) for its operations.
• According to Dr Vishnu Doerga, Founder and Executive Chairman of ACI/ActionCOACH Guyana, the motivation was to reduce energy consumption, save on electricity costs, and foster an environmentally conscious culture among staff.
• He also praised the Government of Guyana for facilitating a seamless transition to renewable energy through supportive policies. These policies include customs duty and VAT exemptions for renewable energy technology, a two-year tax holiday for solar and wind energy investments, and a grid-connected solar PV net-billing system that allows companies like ACI to save on energy costs. The Guyanese government has also introduced incentives for electric vehicles, including zero rates of duty and taxes and a 50% annual write-down allowance.
• Dr Doerga encouraged other businesses to consider transitioning to renewable energy, emphasising the importance of assessing energy needs and financing options. He also stressed the importance of national conversations about renewable energy, commending the Guyana Energy Agency for its role in educating businesses about sustainable energy practices.
• Guyana’s proactive approach to promoting renewable energy is proving vital in the country’s efforts to build a low-carbon economy and ensure reliable, affordable, and sustainable energy access for all its citizens

(Source: Guyana Chronicle)

• Profits for the U.S. banking sector surged 79.5% to US$64.2Bn in the first quarter of 2024, boosted primarily by large banks not shouldering billions in special fees they were directed to pay to recover costs incurred by bank failures last spring. The Federal Deposit Insurance Corporation said most of the higher profits were due to banks not realizing that assessment, which drove down bank profits at the end of 2023.
• Firms also enjoyed boosts in non-interest income and lower provision expenses. Specifically, the FDIC said bank non-interest expense dropped $22.5Bn in the first quarter and was the primary cause of the profit boost. The decline in special assessment costs accounted for over half of those lower expenses.
• Overall, the FDIC said asset quality metrics remained generally favourable, but noted a deterioration in credit card and commercial real estate (CRE) portfolios. In particular, the FDIC said the non-current rate for non-owner occupied CRE loans was now at 1.59%, its highest level since the fourth quarter of 2013, driven primarily by office portfolios at large banks.
• The FDIC also said its "problem bank list" expanded from 52 firms to 63 in the first quarter, and the total assets at those banks rose to $82.1Bn. Currently, 1.4% of total banks are considered "problem banks," which the FDIC said falls within its normal range.
• Bank deposits were up for the second straight quarter, climbing 1.1% or $190.7Bn. Estimated uninsured deposits grew 0.9%, marking its first increase since the end of 2021.

(Source: Reuters)

• U.S. economic activity continued to expand from early April through mid-May but firms grew more downbeat about the future amid weakening consumer demand while inflation continued to increase modestly. These are the findings a U.S. Federal Reserve survey showed on Wednesday, as central bankers mull how long they will need to keep interest rates at current levels.
• The U.S. central bank's latest economic temperature check also showed that the jobs market normalises gradually. According to the Dallas Fed, waning consumer demand was an ongoing concern for many firms. The continued Middle East conflict and geopolitical tensions across the world were also cited as downside risks.
• Contacts in most Fed districts noted consumer pushback against additional price increases. One large clothing retailer told the Boston Fed it planned to implement "modest price reductions on selected items in early fall in a bid to boost sales." However, there are also some signs inflation pressures may be reaccelerating. "Many districts observed a continued increase in input costs," the report said.
• "Consumers are becoming more price-conscious, likely putting pressure on profit margins. We should expect more discounts and incentives as some consumers struggle with persistently high prices," said Jeffrey Roach, chief economist at LPL Financial following the report's release.

 (Source: Reuters)

• Chief Executive Officer of the St. Kitts Tourism Authority, Ellison Thompson, has commended Jamaica for its robust global tourism resilience thrust. In an interview with JIS News, Mr. Thompson credited Jamaica’s Minister of Tourism, Hon. Edmund Bartlett, for leading the tourism resilience charge in the region.
• “Mr. Bartlett has been very helpful to the whole region in terms of putting together sustainable conferences and ensuring that experts were coming in who can guide us in terms of policy towards moving forward. Jamaica has come up with some very good initiatives, which we are definitely very happy to utilise,” he said. 
• Thompson spoke to JIS News following a press briefing held during the 42nd Caribbean Hotel and Tourism Association (CHTA) Caribbean Travel Marketplace event, held recently at the Montego Bay Convention Centre in St. James.
• During the height of the COVID-19 pandemic, Jamaica received international attention and acclaim for implementing measures to safeguard the island’s tourism sector. These measures were also credited for the sector’s rapid recovery post-pandemic.
• In 2023, Jamaica successfully lobbied the United Nations to recognise February 17 as Global Tourism Resilience Day. As part of resilience efforts, the Global Tourism Resilience and Crisis Management Centre was also established.
• Meanwhile, Mr. Thompson outlined that the island is putting measures in place to protect the country’s robust tourism sector from future shocks. “Part of what the country is doing is making sure that we are a sustainable island destination. So, we are looking throughout the Caribbean and globally at practices that were implemented during the COVID-19 pandemic that can be utilised now and moving forward. We are also making sure we are prepared for any further disruption in the world,” he highlighted.

(Source: JIS)

• The Caribbean Hotel and Tourism Association (CHTA) is working with regional and international partners to confront challenges facing the region’s tourism and ensure that citizens across the Caribbean benefit from the sector.
• Among the issues is the matter of airlift, which continues to be a challenge for some destinations, said CHTA President, Nicola Madden-Greig. She noted that while the demand for the Caribbean as a destination remains high, there is no room for complacency, particularly as it relates to airlift.
• “By working with the inter-governmental Caribbean Tourism Organization (CTO), the CHTA will continue to advocate for sufficient airlift coming into the region,” she said, noting that “it is important for the Caribbean to promote intra-regional and multi-destination visitation”.
• As it relates to the pressing issue of climate change and the related impacts, Mrs. Madden-Greig said that the CHTA will continue to be guided by the principles surrounding the signing of a Memorandum of Understanding (MOU) with the Global Tourism Resilience and Crisis Management Centre, which focuses on joint activities around resilience.
• Importantly, pandemics, epidemics, and other threats to the region’s health are high on the Association’s agenda, and the entity recently renewed its MOU with the Caribbean Public Health Agency (CARPHA) to enhance the regional health and security capacity.
• Meanwhile, the CHTA President said she is pleased with the feedback from the 42nd Caribbean Travel Marketplace, so far.  She noted that engagement on the conference floor has been good, and buyers are enjoying the diversity of offerings, with booths spread across different rooms, giving the event a “different feel” this year. 
• Caribbean Travel Marketplace provides an opportunity for local suppliers of tourism products and services to network with, deepen relationships, and conduct business with new buyers from across the globe to promote their products and the destination.

(Source:  JIS)