• U.S. households continued to feel pinched by inflation in late 2023 even as price pressures ebbed, the Federal Reserve reported on Tuesday, with most Americans saying their financial situation had changed little in the last year, while parents reported times had gotten harder.
• The Fed's annual survey on household economics and decision-making showed that about 72% of adults were doing at least okay financially as of October 2023. That was down from 78% in 2021 and the lowest rate since 2016, though little changed from 73% in 2022. The share of parents doing at least okay financially dropped 5 percentage points to 64%, the lowest level since 2015, when data collection began.
• Inflation remained the top financial concern, as 65% of adults said high prices had made their situations worse, even though consumer inflation fell sharply from around 9% in June 2022 to below 4% by the time the survey was taken. Additionally, while 34% said their family's monthly income had risen in the past year, 38% said their spending had also increased. Some 63% percent of adults said they could cover a hypothetical $400 emergency expense using cash or its equivalent, the same as in 2022 but down from a record high of 68% in 2021.
• Covering rental housing costs was a greater challenge last year than the previous year, with 19% of renters saying they had been behind in the rent at some point in the prior year, up from 17% in 2022. Rental costs, which have proven to be among the reasons inflation has not eased as much as Fed policymakers had hoped, were up far more than inflation overall, with the median monthly rent rising 10% to $1,100, the survey said.
• The survey included responses from 11,000 people and was conducted in October of 2023. It was the latest in an array of pulse-takings of U.S. consumers to show a generalized gloom hanging over Americans' view of the economy and their own financial well-being even as growth has exceeded expectations and the job market remains strong.
• Monthly surveys from other organizations like the Conference Board and the University of Michigan have shown a persistent pessimism that began about three years ago alongside the arrival of the highest inflation since the 1980s.

(Source: Reuters)

• Jamaica’s total spending on imports for January to December 2023 was valued at US$7,592.1Mn, while earnings from total exports were valued at US$2,001.8Mn as reported by the Statistical Institute of Jamaica (STATIN). 
• For the twelve months, the value of imports fell by 1.8% when compared to the US$7,731.2Mn spent in 2022. This decrease was largely impacted by lower spending on imports of “Raw Materials/Intermediate Goods” and “Fuels and Lubricants”, which declined by 4.6% and 14.6%, respectively.
• The lower imports of “Raw Materials/Intermediate Goods” were driven by lower expenditure on ‘Industrial Supplies’, ‘Construction Materials’ and ‘Food (incl. Beverages) Mainly for Industries’. The decline in expenditure on imports for 2023 came after consecutive years of increases from 2020 to 2022.
• However, revenues from exports for 2023 increased by 5.3% compared to US$1,901.4Mn earned in 2022. This performance is a continuation of the trend since 2020. The increase in exports for 2023 was due primarily to a 77.6% increase in the exports of “Crude Materials (excl. Fuels)”.
• Domestic exports increased to US$1.521.9Mn, 11.3% above the US$1,367.4Mn for 2022. Consequently, the trade deficit at the end of 2023 decreased by 4.1% to US$5,590.3Mn when compared to US$5,829.8Mn in 2022.
• The five main trading partners for 2023 were the United States of America (USA), China, Brazil, Japan and Colombia. Expenditure on imports from these countries fell by 2.0% to US$ 4,628.6Mn in 2022. This was due largely to lower imports of “Mineral Fuels”.
• The top five destinations for Jamaica’s exports were the USA, Puerto Rico, Latvia, the Russian Federation, and Iceland. Export revenues from these countries increased by 1.2% to US$1,347.9Mn due to higher exports of Alumina.

 (Source: STATIN)

• Finance Minister Dr. Nigel Clarke says the Tax Administration of Jamaica (TAJ) is working to bring in the outstanding corporate income taxes owed by firms for the last fiscal year.
• The category was short $14Bn based on the tax projections for the 2023/2024 fiscal year, affecting the country's fiscal surplus target. In May, Dr. Clarke highlighted that tax revenues for the 2023/ 2024 fiscal year fell short by $24.8Bn
• Speaking with Radio Jamaica News, Dr. Clarke said that further investigations will be done on the factors leading to the outstanding payments. 
• "These entities are identified. We know what they have declared and TAJ will be following up with them pretty assuredly to ensure that they pay over, but also to inquire why they did not pay in March. All of that information and data is useful. And I have to see what the results of that exercise is before making any definitive steps," he said.
• Based on Jamaica's Income Tax Act, unpaid sums owed to the government will also accumulate interest from the day after it is due.
• However, it is uncertain when these outstanding taxes will be collected. "I can't impose an artificial deadline, but I'll be meeting with them at least weekly until we sort of resolve this overhang and, you know, really get to handle as to what the causes are and we're able to estimate what the yield from that overhang will be in this fiscal year." Dr. Clarke added.

 (Source: RJR News & NCBCM Research)

• Venezuela continues to build up military infrastructure and hardware close to the border with Guyana as President Nicolas Maduro and his supporters scale up their threats to annex an oil-rich piece of Guyanese land.
• In a report shared with CNN, the Washington-based think tank Center for Strategic and International Studies (CSIS) warns that while the Venezuelan government “has little to gain and much to lose from a full-blown conflict” it continues to play “a dangerous game” over its claim over the densely forested Essequibo region.
• “The constant drumbeat asserting ‘the Essequibo is ours,’ alongside the creation of new military commands and legal structures to oversee the defence of the region, is helping to institutionalise a sense of perpetual prewar footing,” it wrote.
• There has been speculation that the upcoming Venezuelan elections at the end of July have given Maduro the motivation to escalate against Guyana, using it as a way to distract from his record: Millions of people have fled the country due to poor economic conditions, food shortages and limited access to health care.
• CSIS argues that instead of tamping down the aggression after the vote, “Maduro may be tempted to ramp up both rhetoric and action related to the Essequibo in a true gambit to manufacture a regional crisis in the aftermath of a stolen election.”
• It may not be in Maduro’s interest to “initiate a full-blown conflict with neighbour Guyana, but his escalatory rhetoric tethers his political reputation and legitimacy to his willingness to back his words with force”, especially with his key internal ally, the armed forces, CSIS writes. “Thus, one of the most concerning possibilities is that Maduro will fall victim to his own rhetoric. He has whipped up nationalist passions without providing an escape valve.”

(Source: CNN)

• According to finance ministry data compiled by Reuters, Brazil estimates aid measures taken by authorities after deadly floods in its southernmost state will cost at least 13.4Bn reais (US$2.6Bn) from its budget.
• Heavy rains, which have battered Brazil's Rio Grande do Sul state since late April, caused historic floods that killed over 150 people, while nearly 100 residents are still missing and more than 500,000 have been displaced, official data shows.
• A plan to guarantee credit lines with lower interest rates for small businesses and a cash handout program for families affected by floods are among the measures accounted for in the current fiscal estimate.
• However, the number is likely to rise, as the ministry has not disclosed the fiscal impacts from other measures recently announced such as a plan to buy homes from the private sector to house displaced people.
• Not all the aid measures taken by the government impact its budget since some of them only bring forward payments of social benefits. A proposed freezing of state debt payments also has no effect due to government accounting specifications in the country.
• Investors have closely watched Brazil's fiscal situation after the federal government decided to loosen its 2025 fiscal target earlier this year (targeting a primary surplus target between 0% and 0.25% of GDP, down from the previous 0.5% of GDP target.), even before the rains in Rio Grande do Sul.

(Source: Reuters)

• Federal Reserve officials are not ready to say inflation is heading to the central bank's 2% target after data last week showed a welcome easing in consumer price pressures in April, with several on Monday calling for continued policy caution.
• "It is too early to tell whether the recent slowdown in the disinflationary process will be long lasting," Fed Vice Chair Philip Jefferson told the Mortgage Bankers Association conference in New York, even as he called the April data "encouraging." Jefferson described current monetary policy as restrictive and declined to say if he expected rate cuts to commence this year, only noting that he will be carefully assessing incoming economic data, the outlook, and the balance of risks.
• Like Jefferson, Barr reinforced the Fed's overarching message that rate cuts, highly anticipated by markets, are on hold until it is clear inflation will return to the Fed's 2% target. "We will need to allow our restrictive policy some further time to continue its work," Barr said.
• Cleveland Federal Reserve Bank President Loretta Mester continues to believe that inflation will fall this year, though more slowly than she had expected. However, the lack of progress on inflation in the first quarter, along with a stronger-than-expected economy, means she no longer sees three rate cuts this year as likely.
• Finally, San Francisco Fed President Mary Daly said she sees no evidence of the need to hike rates, but at the same time, is "not confident" that inflation is falling toward 2% and sees no urgency to cut rates.

(Source: Reuters)

• China's fiscal revenue slipped 2.7% in the first four months of 2024 from a year earlier, after a 2.3% slide in the January-March period, in a further sign of an uneven economic recovery. According to finance ministry data released on Monday, fiscal expenditure rose 3.5% in the first four months versus a 2.9% gain in the first quarter.
• For April alone, fiscal revenue fell 3.7% against a 2.4% decline in March, while fiscal spending was up 6.1%, compared with March's 2.9% fall, according to Reuters' calculations based on the ministry data. The ministry said that excluding factors such as last year's high base and tax cut policies, fiscal revenue in the first four months grew 2%.
• China has set an ambitious economic growth target of around 5% for this year, which many analysts say will be a challenge to meet as prolonged weakness in the property sector and tepid consumer demand remain a drag on the economy.
• Factory output topped forecasts in April, helped by improving external demand, but retail sales unexpectedly slowed, and the property sector remained a key drag on the economy, piling pressure on Beijing to do more to support growth.
• The expansion of outstanding total social financing (TSF), a broad measure of credit and liquidity, hit a record low of 8.3% in April amid lagging government bond issuance. On Friday, China unveiled "historic" property easing measures, and the finance ministry kicked off the issuance of 1 trillion yuan in long-dated special treasury bonds to stimulate key sectors of the economy.

(Source: Reuters)

• The Minister of State in the Ministry of Finance and the Public Service, Hon Zavia Mayne, says the Jamaica Customs Agency (JCA) is investing heavily in the expansion of its digital ecosystem to provide quality service.
• Speaking at the 26th Regional Conference of Customs Directors General of the Americas and the Caribbean, at the Hilton Hotel, St. James, on May 13, Mr. Mayne said that in its thrust towards modernisation there will also be the development of a new mobile application, ‘JaCustoms Connect’, as well as its contactless clearance system, to enhance the end-user experience of Customs stakeholders with the entity.
• The State Minister said that the development and strengthening of Jamaica’s economic competitiveness can only be enhanced by a Customs Agency that is efficient through “streamlined processes and procedures”, cost savings, better use of resources and technology, and “transparent through the availability of accurate, reliable and timely information available online”.
• He said that international trade, countries’ economic environments, and new technologies are rapidly evolving and that it is imperative that as “we position ourselves to be competitive, innovative and productive, our Customs Agencies are guided by modernised legislation”.
• “To this end, the new Customs Bill, which has already been tabled in Parliament, and its accompanying regulations will further enhance Customs reform and support the delivery of services at the Jamaica Customs Agency, including the introduction of a canine division, body cameras, contactless processing for non-commercial imports, single-window digital document processing, and digital immigration processing,” the State Minister added.

(Source: JIS)

• The Factories Corporation of Jamaica (FCJ) has been directed to develop turnkey community micro-business parks islandwide as a means of creating more cost-effective operation spaces for micro, small and medium-sized enterprises (MSMEs). Prime Minister, the Most Hon. Andrew Holness, made the disclosure during the launch of Adam and Eve Day Spa’s new location on Old Hope Road in Kingston on Wednesday (May 15).
• Mr. Holness said access to proper infrastructure, specifically purpose-built facilities, is a general challenge that businesses experience. He pointed out that the Government has directed the FCJ, that right across Jamaica, where they have property or where they do not, they should acquire to start building out “what we are calling the turnkey community micro-business parks”.
• “We’re doing the first one in Morant Bay; we have made a massive investment in the parish of St. Thomas in building out the Morant Bay Urban Centre. The Morant Bay Urban Centre is on 25 acres of land. I toured there a few weeks ago; fantastic what is being done there in terms of buildings and facilities and infrastructure,” he stated.
• “But we recognise that whilst we will have larger businesses moving in and occupying this space, we must support the MSMEs in and around the area to create this ecosystem of real estate and facilities. So, the first park will be built on an additional 10 acres that we have acquired. So, it is not only the urban centre in terms of the buildings that have been laid out for banks and for universities and for big shopping centres and so forth. But we will build out a business park for micro and small businesses,” the Prime Minister added.
• Mr. Holness emphasised that MSMEs are a critical part of the economy, noting that there are about 425,000 of these entities across Jamaica. He also noted that, collectively, there are about 412,000 own-account workers (self-employed persons) in Jamaica.
• Mr. Holness further informed that the FCJ has undertaken massive expansion of the GARMEX facility in two phases, with some $3.5 billion spent over the last three years. “It is a wonderful facility, and many businesses are finding accommodation there,” he said.

 (Source: JIS)

• Trinidad and Tobago has obtained approval for the reduction in the current rate of duty applicable to hydraulic cements from 20% to 10% until June 30, 2025. This came out of the 58th Meeting of the Council for Trade and Economic Development (COTED) between May 14 and 15 in Georgetown, Guyana. Trade Minister Paula Gopee-Scoon chaired the meeting, the ministry said in a media release yesterday.
• The approval for the reduction in duty on 'other hydraulic cements', coupled with the termination of the quota and registration system for the importation of cement, 'will allow for the product to be imported from extra-regional sources at a lower cost, ensuring the availability of affordable cement for the construction sector and consumers.
• 'It would also promote a level of competition in the local market. It is to be noted, however, that imported cement will have to meet the current standard for the product to ensure that any imported product complies with relevant safety and packaging requirements,' the ministry stated.
• The COTED is the body within Caricom responsible for promoting trade in goods and services and sustainable regional economic development. The 58th COTED discussed a number of matters pertaining to the promotion of the Caricom Single Market and Economy (CSME), trade in goods, external economic and trade relations and regional standards, amongst others, the ministry said.
• Regional trade ministers also deliberated on issues related to compliance with the Revised Treaty of Chaguaramas, specifically related to the imposition of the correct rates of duties on products from extra-regional sources, the statement said. 'Member States were mandated to ensure the correct duties were being applied on extra-regional imports. This measure will ensure that domestic products are afforded a level of support against imports of products into other Caricom markets from extra-regional countries,' the Trade Ministry said.

(Source: Trinidad Express Newspaper)