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1,505 New Housing Solutions to Be Developed in The Corporate Area Published: 31 August 2022

  • A total of 1,505 new housing solutions are slated for development in the Corporate Area over the next three years.
  • This was announced by Prime Minister, the Most Hon. Andrew Holness, during a handover ceremony for units under phase 1A of the Majesty Gardens housing development in St. Andrew, on August 24.
  • Other areas identified for developments are Fore Shore Estate with 230 units; Maxfield Park – 210; and Howard Avenue Apartments, 280 units. These are to be completed in 2023.
  • The National Housing Trust (NHT) will partner in this ambitious drive to provide affordable solutions for all Jamaicans. Mr Holness emphasized that communities must be diverse and healthy, both in how people live in them and in the environment.
  • However, given the increased cost of borrowing as a result of high-interest rates, it poses a risk of potential delays in some of the planned developments.

(Source: JIS News)

Low-Income Earners to Benefit More from Interest Rate Subsidy Published: 31 August 2022

  • The National Housing Trust (NHT) has decided to provide interest rate subsidies to middle- and low-income earners as well as persons with disabilities in keeping with the Government’s mandate to make homeownership possible for every Jamaican.
  • Mr Holness said the change in its application of additional interest rate subsidies is a fairer and more effective approach, even as the Trust continues to provide greater assistance to those contributors who need it the most.
  • “The subsidy is such that if you fall within a certain category, your interest rates are reduced. If you are disabled, and you are in the category of $30,000 to $40,000, you get a 1% reduction in your interest rate, but that category only pays 2%. If you are in the $42,000 and over, you get a 1% reduction, so you pay 3%,” the Prime Minister indicated.
  • The NHT has been evaluating how it allocates subsidies. Under the previous approach, additional interest rate subsidies were applied to special groups. This resulted in persons who fell within those groups automatically attaining subsidies – whether or not they were needed to access or afford a loan.
  • This change in interest rate subsidies is expected to make homeownership more affordable for low-income earners, especially in light of rising interest rates that have increased the cost of borrowing. This should help to sustain demand in the affordable housing segment of the real estate market.

(Source: JIS News)

Resilient Private Consumption, Natural Gas Exports To Drive Peruvian Growth In 2022   Published: 31 August 2022

 

  • Fitch forecasts that the Peruvian economy will grow 2.7% in 2022, up from the 2.4% previously forecast. While this would make Peru among the fastest-growing economies in Latin America this year, mounting headwinds in H2 2022 will keep growth below the 3.2% average that Peru recorded from 2015-2019.
  • Private consumption growth will remain strong in the coming months as a result of easing inflation, falling unemployment, and income support measures. In Q2 2022, private consumption remained robust at 4.6% y-o-y, down slightly from 4.8% in Q1 2022, indicating that consumers were less deterred by rising inflation than previously anticipated.
  • Notably, the Agency forecasts that inflation will slow from 8.7% currently to 7.4% by the end of 2022, which will increase purchasing power and private consumption. In addition, a tightening labour market in Q2 2022 will support spending as real wages rise.
  • A decline in total exports will be slowed by elevated demand for energy globally, which supported robust natural gas exports and hence growth in recent months. In addition, investment growth will support the expansion. In Q2 2022, investment grew by 2.5% y-o-y, recovering from a 5.5% contraction in Q1, as the Banco Central de Reserva del Peru’s (BCRP) more gradual hiking cycle kept borrowing costs lower.
  • However, risks to the growth forecasts remain to the downside. That is, should inflation ease more slowly in the coming months, the BCRP may elect to hike rates beyond its September meeting, tempering private consumption and investment growth. In addition, weaker growth in China could place additional strain on external demand, capping headline growth.

(Source: Fitch Solutions)

 

ECLAC: Region Torn Between Growth And Inflation Published: 31 August 2022

  • The Economic Commission for Latin America and the Caribbean (ECLAC) has warned of the challenges to be faced by countries in the region as they move to reactivate investment and growth.
  • In its latest annual report titled Economic Survey of Latin America and the Caribbean 2022, ECLAC highlighted the trends and challenges of investing for a sustainable and inclusive recovery, in which it projects 2.7% average economic growth for the current year in a context of acute macro-economic restrictions that are hurting the region's economies.
  • Mario Cimoli, Acting Executive Secretary of ECLAC noted that “in the context of multiple goals and growing restrictions, there must be a coordination of macroeconomic policies that would support the acceleration of growth, investment, and poverty and inequality reduction, while also addressing inflationary dynamics”.
  • The report emphasised that Latin American and Caribbean countries are facing a complex economic outlook in 2022 and in the coming years. Lower economic growth is compounded by strong inflationary pressures, little dynamism in job creation, declining investment and growing social demands.
  • This situation has translated into major challenges for macroeconomic policy, which must strike a balance between policies that would drive economic reactivation and policies aimed at controlling inflation and ensuring the sustainability of public finances.

(Source: Trinidad Express Newspapers)

U.S. Consumer Confidence Rises More Than Expected In August Published: 31 August 2022

  • Consumer confidence rebounded more than expected in August after three straight monthly declines, with vacation intentions rising to an eight-month high, a potential positive signal for consumer spending.
  • The Conference Board said on Tuesday, August 30, 2022, its consumer confidence index rose to 103.2 this month from 95.3 in July. Economists polled by Reuters had forecast the index climbing to 97.7.
  • The survey's present situation index, based on consumers' assessment of current business and labour market conditions, climbed to 145.4 from 139.7 in July. Its expectations index, based on consumers' short-term outlook for income, business and labour market conditions, increased to 75.1 from 65.6 last month.
  • "Purchasing intentions increased after a July pullback, and vacation intentions reached an 8-month high," said Lynn Franco, Senior Director of Economic Indicators at the Conference Board in Washington. "August's improvement in confidence may help support spending, but inflation and additional rate hikes still pose risks to economic growth in the short term."

(Source: Reuters)

 

Canadian Banks Brace For Uncertainties After Mixed Quarter Published: 31 August 2022

  • Bank of Montreal (BMO) closed out a mixed quarter for Canada's biggest banks on Tuesday, with investors and analysts expecting some earnings drivers to ebb and economic uncertainties to increase in future quarters.
  • BMO missed analysts' estimates for third-quarter profit and reported a decline in earnings from a year earlier as revenue from its capital markets business slumped and it increased provisions for credit losses.
  • Three of Canada's Big Six banks have missed expectations driven in part by challenges in their capital markets operations. The other three beat expectations as loan growth remained strong and margins expanded.
  • Mortgages at the six banks grew nearly 10% in the quarter from a year earlier, while commercial loans jumped 16%, according to financial statements. "Overall, it was a solid quarter for the banks, but we're certainly seeing some storm clouds brewing," said Rob Colangelo, Senior Credit Officer at Moody's Investors Service.
  • The Big Six mostly beat analyst estimates in the latter quarters of the pandemic thanks to strong mortgage growth backed by a red-hot housing market and robust trading and deals activity. Releases of loan-loss provisions set aside earlier in the pandemic also boosted earnings. However, the tide appears to be turning, with investment banking fees drying up, funds under management falling and the banks again increasing provisions as economic headwinds grow and higher costs and interest rates squeeze consumers.
  • While some deals and trading activity could return in coming quarters, revenue in these businesses is likely to remain muted for the next few quarters, said Steve Belisle, portfolio manager at Manulife Investment Management. New mortgage lending - another growth engine - is also expected to sputter in coming quarters.

(Source: Reuters)

Producer Price Index Shows Decreases in Mining & Quarrying and Manufacturing Industries for July 2022 Published: 31 August 2022

  • For July 2022, output prices for producers in the Mining & Quarrying industry declined by 1.4%. This was primarily attributed to the 1.5% fall in the index for the major group ‘Bauxite Mining & Alumina Processing’. There was also a decline in the index for the other major group, ‘Other Mining & Quarrying’, which moved down by 0.1%.
  • The Manufacturing industry’s index recorded its first decline since the start of the 2022 calendar year, of 0.8%. The main contributor to this downward movement was a 4.5% decline in the index for the major group ‘Refined Petroleum Products’. However, the industry’s movement was tempered by a 0.2% increase in the index for the major group ‘Food, Beverages & Tobacco’ and a 3.1% rise in the ‘Wood, Wood Products and Furniture’ major group’s index.
  • For the period July 2021 – July 2022, the Producer Price Index (PPI) for the Mining & Quarrying industry rose by 5.9%, due mainly to an increase of 5.8% in the index for the major group ‘Bauxite Mining & Alumina Processing’. The point-to-point index for the Manufacturing industry moved up by 20.8%.
  • For the fiscal year-to-date, April 2022 – July 2022, the index for the Mining & Quarrying industry decreased by 0.5%, while the index for the Manufacturing industry advanced by 4.8%.
  • The price decrease in the index follows a decline in the CPI index for the 12 months to July 2022. Despite the still high inflationary environment, there has been a general reduction in commodity and oil prices. BOJ forecasts a further reduction in commodity prices which is expected to stabilize inflation.

(Source: STATIN)

IDB To Help Modernize Postal Services In Latin America And The Caribbean   Published: 31 August 2022

 

  • The Inter-American Development Bank (IDB) says it has signed an agreement with the Universal Postal Union (UPU) to modernize and transform postal services in Latin America and the Caribbean (LAC). The aim is to promote regional integration and trade, strengthen value chains and foster the digital economy.
  • Postal services have unique advantages to facilitate trade, including a network that can reach remote areas, transaction logistics, and linkages with other postal services and key actors in the trade process, such as customs and airlines.
  • The IDB said improving these services across the region can lead to increased commerce and help develop the digital economy, especially for small and medium-sized firms (SMEs), which account for about 99% of businesses in Latin America and the Caribbean.
  • The partnership will allow it to support countries as they incorporate the international guidelines and standards issued and promoted by the UPU.
  • The institutions will also collaborate in researching data on trends and identifying existing gaps in postal services. The agreement includes sharing best practices and expertise from the modernization of postal services at the global level, which can be adapted and replicated in the region.

(Source: Caribbean Nation Weekly)

Positive Growth Published: 31 August 2022

  • According to the Economic Commission for Latin America and the Caribbean (ECLAC) countries of Latin America and the Caribbean face a complex economic and social environment in 2022. Weak economic growth is accompanied by strong inflationary pressures, slow job creation, falling investment and growing social demands.
  • This situation has created major challenges in terms of macroeconomic policy, with a need to reconcile policies that promote economic recovery with policies to rein in inflation and make public finances sustainable.
  • According to the Agency’s recent report, the economy of the Caribbean region is expected to grow overall by 10.2%, due to the whopping 52% growth expected in the Guyana economy. The Barbados economy is also projected to grow by about 5.9% this year owing to the continued recovery in its tourism sector.
  • Meanwhile, Latin America and the Caribbean together are projected to have an average growth of 2.7%, returning to the path of low growth it was following before the COVID-19 pandemic. This, ECLAC said, was in keeping with the slowdown seen in the first half of 2022, after growth of 6.5% in 2021.
  • In the Latin America and Caribbean region, the value of exports is expected to rise by 22% this year, and the value of imports by 23%, as domestic demand continues to grow.
  • Notably, in the Caribbean, total revenues are expected to increase again in 2022, driven mainly by rises in tax revenues and revenues from other sources, such as non-tax revenues, capital revenues and external grants.

(Source: Barbados Today)

UK inflation could top 22% as energy prices soar, Goldman Sachs warns Published: 31 August 2022

  • U.K. inflation could soar above 22% next year if energy prices continue their upward spiral, U.S. investment bank Goldman Sachs warned. In a research note dated Monday, August 29, 2022, Goldman said headline inflation could peak at 22.4% and the gross domestic product could drop by 3.4% if energy costs keep rising at their current pace.
  • This comes after British households were hit with a projected 80% increase in their energy bills in the coming months, taking the average annual household bill to £3,549 ($4,197) from £1,971 and exacerbating the country’s existing cost-of-living crisis.
  • Britain’s energy regulator, Ofgem, announced Friday, August 26, 2022, that it would raise its main cap on consumer energy bills from Oct. 1 to keep pace with rising wholesale gas prices, which have surged 145% in the U.K. since early July. Ofgem is due to recalculate its price cap again in three months. However, Goldman said that if prices remain “persistently higher,” another 80% hike could be possible.
  • If, however, energy prices moderate, U.K. peak inflation is likely to hit 14.8% in January, Goldman’s commodity strategists predicted — well above the 13.3% forecast by the Bank of England earlier this month.
  • The bank also said that the U.K. was likely to fall into a recession in the fourth quarter. It forecast that the U.K. economy would contract by -0.3% on a non-annualized basis in the fourth quarter of this year, followed by -0.4% and -0.3% in the first and second quarters of 2023, respectively. This comes on the back of the impact of surging inflation on households' disposable incomes and consumption.

(Source: CNBC)