• UK Prime Minister Rishi Sunak unveiled a £29.5Bn ($36.8Bn) private sector investment plan to reposition Britain as a top destination for foreign money. Key contributors include Australian funds IFM Investors and Aware Super, Spanish power company Iberdrola, and tech giant Microsoft.
• The investment is part of a broader strategy to kickstart the UK economy, offering permanent tax breaks for businesses to modernize infrastructure. The government aims to attract foreign investors in critical sectors such as clean energy, life sciences, and advanced technology to create high-quality jobs.
• The UK faces challenges in attracting foreign direct investment (FDI) due to political and regulatory uncertainties stemming from Brexit. France has surpassed the UK in FDI projects, prompting a government review to enhance competitiveness. Sunak emphasizes the need to avoid subsidy races and create conditions for private sector investment.
• Contributions from various sectors, including finance (Blackstone, JPMorgan Chase, Goldman Sachs, Aviva) and technology (Microsoft), showcase a diversified investment portfolio. Nissan's commitment to building electric cars in the UK adds to the mix, indicating increased competition between states for global investment.

(Source: Reuters)

• Jamaica generated just over US$1.22Bn in export earnings between January and July this year. This represents a 30.6% increase over the US$939.1Mn earned for the corresponding period in 2022, the Statistical Institute of Jamaica (STATIN) has reported.
• A statement from STATIN on Wednesday (November 22) indicated that the increased exports this year were primarily spurred by higher outflows of ‘Crude Materials’ (excluding Fuels) and ‘Mineral Fuels’. STATIN also reported increased earnings from domestic exports and re-exports during the review period. The Institute indicated that domestic exports climbed to US$926.9Mn, up from US$766.1Mn in 2022. Re-exports increased by 73.3% to US$299.8Mn.
• The top-five destinations for Jamaica exports were the United States of America (USA), the United Kingdom (UK), Puerto Rico, the Russian Federation, and Latvia. Revenue from outflows to these countries rose by 23.3% to US$856Mn.
• Meanwhile, Jamaica’s expenditure on imports between January and July 2023 rose by 1.5% over the corresponding period last year to US$4.43Bn. The spend for the first seven months of 2022 totalled US$4.37Bn. STATIN said the increase was largely attributable to higher imports of ‘Raw Materials/Intermediate Goods’, up 8.1%; ‘Consumer Goods’, up 14.3%; and ‘Capital Goods (excluding motor cars), up 38.2%.
• Jamaica’s top five trading partners for the review period were the USA, People’s Republic of China, Brazil, Japan, and Colombia. Imports expenditure with these countries increased by 2.7% to US$2.76Bn, relative to the corresponding period in 2022. This increase was largely due to higher inflows of mineral fuels from the USA, STATIN further indicated.

(Source: JIS)

• The Government has announced temporary reductions in Jamaica Urban Transit Company (JUTC) fares. This forms part of measures to dampen the impact of the announced increases in public passenger vehicle (PPV) fares on the overall inflation rate. On October 10, 2023, the Government announced a 19% increase in PPV fares (excluding JUTC and the Montego Bay Metro (MBM)), effective October 15, 2023. A further 16% increase was also announced to take effect in April 2024.
• The Central Government is expected to provide the JUTC with the resources to finance the initiative. Minister of Finance and the Public Service, Dr the Hon. Nigel Clarke, made the announcement during a statement to the House of Representatives on Tuesday (November 21).
• He informed that effective January 1, 2024, there will be a reduction in the regular fare from $100 to $70, a decrease in the fare for children from $30 to $25, and for pensioners from $40 to $30. Additionally, effective April 1, 2024, there will be a further reduction in the regular fare from $70 to $50, from $25 to $20 for children while the fare for pensioners will be reduced from $30 to $25.
• “We anticipate that these temporary measures will have a mitigating effect on the impact of the private bus and taxi fare increases on the commuting public. I wish to reiterate that these are temporary measures designed and calculated to support the Bank of Jamaica (BOJ) in its efforts to return and keep inflation within the target range,” Dr Clarke said.
• The BOJ’s monetary policy action, supported by prudent fiscal policy as well as a moderation in imported commodity prices, has resulted in a sharp decline in 12-month point-to-point inflation from a high of 11.8% in April 2022 to 5.1% in October 2023. However, the Central Bank advises that, as a result of the adjustments in PPV fares, they are expecting a reversal of the downward trend in annual inflation starting in November 2023.

(Source: JIS)

• Brazil's government projections for its public accounts in 2023 have substantially worsened, with the deficit before interest expenses now nearing the annual fiscal target, as indicated by its latest bimonthly revenue and expenditure report.
• The projected primary deficit for the year has been expanded to 203.4Bn reais (US$41.46Bn), up from the 141.4Mn reais estimate in September, considering the calculation methodology employed by the central bank, which is used to verify compliance with the annual fiscal target.
• The updated estimate, prepared by the Planning and Finance ministries, positions the 2023 deficit at a level equivalent to 1.9% of the gross domestic product (GDP), up from the 1.3% shortfall seen in September and very close to the 2.0% target set by the budget law. However, the worsening situation follows a decrease of 22.2Bn reais in projected revenues for the year, coupled with a rise of 21.9Bn reais in expenses.
• Unlike the Treasury's methodology, the central bank does not permit the inclusion of 26Bn reais from untouched funds allocated to workers earning up to two minimum wages, known as PIS/PASEP, which had not been previously redeemed. This amount was precisely what led the central government's primary result, as calculated by the Treasury, to show a surplus in September, while the central bank reported a deficit for the same period.
• Treasury Secretary Rogerio Ceron emphasised that his department does not agree with the central bank's approach, highlighting that, based on the Treasury's interpretation, the projected primary deficit for 2023 would increase by a smaller margin, reaching 1.7% of gross domestic product, the report said.
• New fiscal rules introduced by President Luiz Inacio Lula da Silva's administration is aimed at achieving a primary deficit equivalent to 0.5% of GDP this year. Nevertheless, members of the government's economic team were long contemplating the feasibility of a 1.0% of GDP deficit, a goal that now appears increasingly challenging.
• According to Ceron, the central government's primary deficit for this year is expected to be 1.3% of GDP by the Treasury's criteria, benefiting from the late-stage accumulation of resources, which traditionally occurs when ministries are authorized to spend but, due to bureaucratic issues, do not effectively do so.
• The secretary also said the government is in discussions with the central bank on the potential submission of a bill defining the methodology of calculating the primary result, noting that the current practice of the central bank "is not the most modern approach."

 (Source: Reuters)

• President of the Belize Coalition of Services Providers (BCSP), Dr Dionne Chamberlain-Miranda signed a memorandum of understanding (MOU) for a strategic partnership agreement at the T&T Coalition of Services Industries (TTCSI’s) head office in Woodbrook. The agreement paves the way for the entities to work together, using their respective specialised expertise to support each other with business development and marketing activities.
• TTCSI Chief Executive Officer Vashti expressed confidence that small and medium-sized (SME) service companies in both T&T and Belize will benefit from the new and strategic partnership between the groups.
• According to the MOU, TTCSI and BCSP will “explore the effective use and integration of each other’s technologies into the respective solutions being developed and marketed by the two parties.”
• Guyadeen explained that over the past few years, the TTCSI has been helping local services SMEs enhance their international competitiveness and break into foreign markets with its Services Go Global and Gateway to Trade initiatives.
• She said with this new partnership, the TTCSI will take on a mentoring role, assisting a sister coalition in the Caribbean—the BCSP—with its growth and development so that it can evolve into a strong support for Belizean entrepreneurs, firms, and business organisations. “Meanwhile, BCSP will work with TTSCI to support collaboration between T&T and Belizean firms in a business-to-business (B2B) environment.”

(Source: Trinidad and Tobago Guardian)

• British companies reported a marginal return to growth in November, with the S&P Global/CIPS UK Composite Purchasing Managers' Index (PMI) reaching 50.1, up from 48.7 in October. This is the first time the index has crossed the 50 threshold for growth since July.
• Despite the growth in overall economic activity, the downturn in orders continued for the fifth consecutive month, indicating a persistently weak economy.
• Following the announcement, the sterling strengthened against the dollar and the euro, while British government bond prices fell. Market expectations for the Bank of England to cut interest rates were pushed back.
• While the PMI for the services sector was positive at 50.5, the manufacturing sector signalled a decline in output at 46.7. Respondents reported concerns about persistent inflation, and although firms were more optimistic about the future, forward-looking indicators suggested elevated recession risks in the coming year.

 (Source: Reuters)

• U.S. consumers' inflation expectations rose for the second consecutive month in November, with households anticipating a 4.5% inflation rate over the next year, up from 4.2% in October and 3.2% in September.
• Over a five-year horizon, consumers expect inflation to average 3.2%, increasing from 3.0% in October to 2.8% in September. This long-term outlook is the highest since 2011 and hasn't been surpassed since 2008 during the financial crisis.
• Despite evidence of a slowdown in actual inflation rates since the summer of 2022, consumers express concerns that the deceleration might reverse in the coming months and years.
• The Federal Reserve is faced with the challenge of managing inflation expectations, as an unanchoring of these expectations could impact consumer behaviour and contribute to further price increases. The divergence in survey results, with the University of Michigan showing rising expectations while other measures indicate moderation, adds complexity to the Fed's decision-making process.

 (Source: Reuters)

BOJ Maintains Policy Rate at 7.0% To Support Inflation Reduction

• The Bank of Jamaica’s (BOJ) Monetary Policy Committee (MPC), at its meetings on 17 and 20 November 2023, unanimously agreed to maintain: the policy interest rate (the rate offered to deposit-taking institutions (DTIs) on overnight placements with Bank of Jamaica) at 7.0%; tight Jamaican dollar liquidity conditions; and relative stability in the foreign exchange market.
• The decision to maintain the monetary policy stance is based on the MPC’s view that, while inflation at October 2023 fell within the Bank’s target range, it is projected to rise above the target range between the December 2023 and March 2025 quarters. The MPC however noted the downside risks to this outlook, including fiscal measures to counteract the inflationary pressures from recent regulated price increases, the relative stability in core inflation and the prospect of the United States (US) Federal Reserve Board (Fed) maintaining its policy rate in the near future.
• Headline inflation fell within the target range for the second consecutive month. The annual inflation rate at October 2023 of 5.1% was below the 5.9% at September 2023, and also much lower than the peak rate of 11.8% recorded at April 2022. Core inflation (which excludes food and fuel prices from the Consumer Price Index (CPI)) was 5.7% at October 2023, generally in line with the average for the past two months and, lower than the 8.4% recorded at April 2022.
• The projected acceleration in inflation primarily reflects the impact of the announced increases in selected public passenger vehicle (PPV) fares in October 2023 and April 2024.The forecast also assumes that oil prices will be elevated over the next three quarters (December 2023 to June 2024). International grains prices are, however, projected to continue to fall in a context of buoyant supplies, while shipping prices are forecasted to remain low and stable, given a projected slowdown in global growth.
• The risks to the inflation outlook are, however, skewed to the downside (inflation lower than projected). The main downside risks include the possibility of fiscal measures being implemented to cushion the impact of the increase in PPV fares, which was signalled by the Government. Oil prices could also trend below the forecast. Upside risks to this outlook include higher-than-projected future wage adjustments in the context of the tight domestic labour market, second-round effects from the PPV fare increases, sharp increases in domestic agricultural price inflation over the near term, and worsening supply chain conditions.
• Future monetary policy decisions will depend on incoming data related to the relative strength of the risks to inflation noted above. The Committee decided to maintain heightened surveillance of the risks, and is committed to the Bank using the complete set of tools at its disposal to achieve the policy objective. The Committee also noted its preparedness to take the necessary actions, including further tightening of monetary policy, if the emerging upside risks to inflation materialise. As such, the Bank will continue to closely monitor the global and domestic economic environments for these potential risks to Jamaica’s inflation rate. The date of the next policy decision announcement is 20 December 2023.

(Source: BOJ)

• The Planning Institute of Jamaica (PIOJ) reported that the economy grew by an estimated 1.9% during the July to September 2023 quarter, compared with the corresponding period last year. Speaking during the PIOJ’s quarterly briefing on Tuesday (November 21), Director General, Dr. Wayne Henry said the out-turn for the review quarter largely reflected higher levels of employment, increased capacity utilisation in the mining and quarrying industry, and continued growth momentum in the tourism sector.
• Real value added for the mining and quarrying industry increased by an estimated 102%, due to higher alumina production that outweighed a contraction in crude bauxite output. “Alumina production increased by 136.6% due to an expansion in the alumina capacity utilisation rate to 42.4%, up 24.5 percentage points. This was driven by increased capacity utilisation at the Windalco and Jamalco refineries as operations gradually returned to normalcy following technical issues that constrained production at Windalco, as well as Jamalco’s ramping up of capacity since its reopening at limited capacity in the corresponding period of 2022,” Dr. Henry said.
• Henry informed that real value added for the hotels and restaurants industry grew by 8.0% during the quarter. The industry continues to benefit from increased foreign national arrivals, considering the continued economic growth in main source markets.
• Growth in the manufacturing industry was estimated to be 3.2%, stemming from increased output in both the Food, Beverages & Tobacco and Other Manufacturing industries. The Director General added that the improved performance of the Other Manufacturing sub-industry mainly reflected higher production in petroleum products, all of which increased.
• Meanwhile, the agriculture, forestry and fishing sector contracted by an estimated 9.0%, reflecting the adverse impact of drought conditions. The industry’s performance was reflected in declines recorded for Other Agricultural Crops, which contracted by 11.8%. Lower production was recorded for eight of the nine crop groups.
• Turning to construction, real value added was projected to be flat, reflecting an estimated contraction in building construction, which was counterbalanced by growth in the ‘Other Construction’ component of the industry.
• Economic growth is anticipated for the remainder of this calendar and fiscal year. For October to December 2023, it is projected that the economy will grow within the range of 1.0% to 2.0%, resulting in calendar year growth (January to December 2023) within the range of 2.0% to 3.0%. For Fiscal Year 2023/24, the projection is for growth within the range of 1.0% to 2.0%.

(Sources: JIS & PIOJ

• Businesses in both Guyana and the European Union (EU) member states are expected to foster better business and trade relations, as the European Chamber of Commerce was officially established locally.
• The Chamber of Commerce which, this month, officially established a presence in Guyana, was on Monday evening introduced to the public at a reception at the EU Ambassador’s Residence.
• In a brief address at the launch of the chamber, Minister of Public Works, Juan Edghill said that he hopes that networking through the newly established chambers will develop synergies, and possible partnerships and create investment opportunities.
• He said: “This will bring a new wave and a new breath of fresh air, both in terms of time, quality, and style because in every part of the world you have different experiences. We are not closed to any group; Guyana is open for business, and whoever wants to come to Guyana on fair terms and conditions to satisfy what we are seeking to do.”
• Meanwhile, Gregory Dean, Chairman of the Chamber of Commerce, expressed that “we’ve been set up to create opportunities, to network, share knowledge and also best practices, advocate on behalf of our members in the EU, and also in Guyana, provide advice and support to EU companies entering the Guyanese market, and also for me, critically, Guyanese companies wanting to enter the EU market,” he said.
• Dean related that they have seen a lot of interest in Guyanese companies wanting to enter the EU market, but have had difficulties among other things. As such, he indicated that the chamber will play a critical role in terms of getting companies to establish their businesses in the EU. Dean said too that they are open for business and ready to foster better relations between the EU and Guyana.

(Source: Guyana Chronicle)