• Federal Reserve officials differed on the need for additional interest rate hikes during their September meeting.
• The majority agreed on the necessity of keeping rates elevated until convinced that inflation is heading back to the target of 2%. A summary of the meeting indicated that most participants judged one more rate increase would likely be appropriate, while some believed no further increases would be warranted.
• The meeting did not result in a rate hike, but about two-thirds of the committee indicated the possibility of one more increase before the year's end. Some officials noted the need to proceed carefully based on incoming data and maintain a restrictive policy until confident about sustainable inflation reduction.
• Markets showed mixed reactions after the minutes' release, and expectations for additional rate hikes were scaled back based on fed funds futures market data. Concerns about inflation, upside risks to prices, resilient consumer spending, and potential financial pressures on households were discussed during the meeting.
• Inflation data, including the producer price index, indicated progress toward the Fed's 2% target, but some concerns remain regarding the inflation outlook.

(Source: CNBC)

• Spatial Artificial Intelligence (AI) technology is poised to revolutionise training in Jamaica’s tourism industry through virtual and augmented reality platforms for enhancing the education and professional development of staff and stakeholders in the sector.
• Tourism Minister, Hon. Edmund Bartlett, endorsed the transformative potential of the technology while addressing the launch of the EON Reality and Sandals Corporate University (SCU) training and development partnership at Sandals Royal Plantation in Ocho Rios, St. Ann, on Thursday (October 5).
• The collaboration promises to impact Jamaica and the Caribbean on a wide scale, with the potential to target over 10,000 employees for upskilling according to the Minister.
• Additionally, the interactive and immersive approach contributes to securing the future of tourism by equipping the workforce with the skills and knowledge needed to excel in an ever-evolving industry.
• Bartlett outlined that in the current era, characterised by rapid technological changes, endeavours such as the SCU and EON partnership will guarantee Jamaica’s sustained position in tourism as a global leader in education and training. The use of EON Reality’s innovative solutions across these diverse programmes demonstrates the versatility of the EON AI Assistant in facilitating learning and teaching across various subject areas.
• The engagement of AI is anticipated to redefine training and capacity building within the tourism industry. Further, it will improve the resilience of the industry, enable the industry to compete on a regional and international scale and mark the start of a transition into the new technological age for Jamaica’s tourism workers.

(Source: JIS News)

• Regional rating agency, Caribbean Information and Credit Rating Services Limited (CariCRIS) has upgraded VM Investment's overall creditworthiness. The regional scale local currency rating indicates that the level of creditworthiness of this obligor, adjudged concerning other obligors in the Caribbean is good. The national scale local currency rating indicates high creditworthiness compared to other obligors in Jamaica.
• The ratings have been upgraded to CariBBB (Regional Scale Local Currency); jmBBB+ (Jamaica National Scale Foreign Currency); and jmA- (Jamaica National Scale Local Currency). 
• CariCris says VM Investment's creditworthiness is 'Adequate,' and it maintains a 'Stable' outlook for the company.
• The rating agency noted several strengths to VMIL’s creditworthiness, which it described as ‘adequate,’ including expected benefits from its investment in Kingston Properties (KPREIT), improvement in the credit risk profile of VMIL’s parent company, VM Financial Group Limited (VMFG) and implied support therefrom and an improvement in Jamaica’s sovereign risk profile.
• The agency expects VMIL to remain profitable and adequately capitalized over the next 12 to 15 months.
• The agency cited VMIL’s growing presence in the Jamaica financial services sector supported by its parent, VMFG, continued profitability and maintenance of good capitalisation levels, underpinned by its growing tangible net worth.

• The rating upgrade signifies a lower credit risk for VMIL and greater reliability in meeting financial obligations. 

(Source: CariCRIS Ratings)

• The International Monetary Fund (IMF) raised its 2023 output growth estimate for Latin America and the Caribbean to 2.3% from July's 1.9% due to faster expected growth in Brazil and Mexico, the fund said in a report on Tuesday.
• The 2.3% estimate for 2023 follows the growth of 4.1% last year, with the slowdown due to a "normalization of growth along with the effect of tighter policies, a weaker external environment, and lower commodity prices."
• The upward revision to 2023 since July reflects stronger-than-expected growth in Brazil, revised upward by 1.0 percentage points to 3.1%, driven by buoyant agriculture and resilient services in the first half of 2023.
• Consumption has also remained strong, supported by fiscal stimulus. The upward revision for the region also reflects stronger-than-expected growth in Mexico, revised upward by 0.6 percentage points to 3.2%, with the delayed post-pandemic recovery taking hold in construction and services and spillovers from resilient US demand.
• The major regional economies expected to see a contraction this year are Argentina, with a -2.5% GDP growth estimate and Chile, with -0.5%. This could be due to Argentina facing steady depreciation of the peso, negative central bank reserves and an economy struggling due to the impact of drought on the agricultural sector. In the case of Chile, the world’s largest copper producer, the contraction likely represents the impact of operational issues that have hit copper mining and production in the country.
• Notably, for the Caribbean segment only, real GDP of 9.8% and 8.3% is forecasted for 2023 and 2024, respectively, down from 13.9% in 2022. Consumer prices are anticipated to stay elevated in 2023 (13.2%) relative to 2022 (12.6%); however, it is expected to moderate in 2024 (6.5%).

(Sources: IMF & Reuters)

• The Federation of Independent Trade Unions of Guyana (FITUG) recently took part in discussions with the Government of Guyana to contribute to the formulation of the 2024 National Budget. The meeting, lasted nearly two hours and covered a broad spectrum of topics including labour rights, agriculture, and financial policies.
• FITUG in a press release expressed its support for government initiatives aimed at improving the well-being of workers and their families. Additionally, the organisation recommended several policies to further enhance worker welfare.
• One of FITUG’s key proposals was to adjust the income tax regime to boost disposable income for workers, including changes to income tax thresholds and rates, as well as the introduction of tax credits for taxpayers with dependents. FITUG also reiterated its call for the equating of the national minimum wage and public sector minimum wage as a step towards a livable wage.
• Furthermore, FITUG urged the government to consider improving pensions and public assistance and to address long-neglected adjustments in pensions paid by the National Insurance Scheme (NIS). The organisation also recommended introducing pay increments within the public service based on performance, in consultation with relevant bargaining agents. Strengthening labour legislation was another urgent concern raised by FITUG. The organisation emphasised the need for an updated legal framework to protect workers’ rights, modernising outdated laws, and reinforcing the Labour Ministry.
• The government welcomed FITUG’s proposals, considering them reasonable and appropriate. While acknowledging that not all issues could be comprehensively addressed, the government pledged its commitment to improving the well-being of the working class.
• In summary, the meeting between FITUG and the government highlighted the importance of prioritising the welfare of workers and taking tangible steps to enhance their economic conditions as the country moves forward. Both parties expressed their commitment to collaborating for the betterment of all Guyanese citizens.

(Source: Guyana Chronicle)

• Wall Street indices closed higher on Tuesday due to dovish comments from U.S. Federal Reserve officials, leading to lower Treasury yields. Atlanta Fed President Raphael Bostic mentioned no need for further interest rate hikes and no looming recession.
• Israeli air strikes in Gaza led to significant destruction and loss of life, influencing market sentiment and attention. Market experts emphasized that declining bond yields were a key driver for the stock market gains on Tuesday.
• The potential escalation of the Middle East conflict could impact bond yields and equity markets, increasing uncertainty and risk aversion. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average showed gains on Tuesday.
• Minneapolis Federal Reserve Bank President Neel Kashkari expressed confidence in a soft landing for the U.S. economy with controlled inflation and stable unemployment. Traders predicted a high probability of interest rates remaining unchanged in November and December.
• Upcoming focus on inflation readings, Fed meeting minutes, and the beginning of the third-quarter earnings season was noted. Notable stock movements included PepsiCo and Coca-Cola rising, Truist Financial shares rallying, and Rivian Automotive advancing due to a stock upgrade.

(Source: Reuters)

• The Bank of England said on Tuesday that valuations for some financial assets may be too high, particularly for U.S. tech stocks and dollar-denominated corporate bonds. "The overall risk environment continues to be challenging and near-term growth prospects remain subdued," the BoE's Financial Policy Committee (FPC) said after a quarterly meeting.
• "Given the impact of higher interest rates, and uncertainties associated with inflation and growth, some risky asset valuations appear to be stretched," it added. The FPC judged Britain's banks and the wider financial system remained resilient, and it held banks' counter-cyclical capital buffer (CCyB) - a risk management tool - unchanged at 2%. "The FPC will continue to monitor developments closely and stands ready to vary the UK CCyB rate, in either direction, in line with the evolution of economic and financial conditions," it said.
• Some FPC members argued for an increase in the rate, to boost banks' resilience at a time when loan losses were low, and the case for cutting it was also considered, the BoE said. After last month's meeting of its Monetary Policy Committee (MPC), the BoE kept interest rates on hold for the first time since it began its tightening cycle in December 2021, leaving its main Bank Rate at 5.25%.
• Earlier on Tuesday, the International Monetary Fund downgraded its forecasts for Britain for next year, predicting growth of just 0.6% in 2024, the weakest of any major advanced economy. The BoE said it did not expect the debt-servicing burden on British households or businesses to return to higher levels seen on the eve of the global financial crisis in 2007, even with much of the impact of its run of rate rises still to be felt.
• However, it was keeping a close eye on the property market in Hong Kong and mainland China, to which some British lenders are exposed.

(Source: Reuters)

• Caribbean Information and Credit Rating Services Limited (CariCRIS) has upgraded the regional scale ratings of Supreme Ventures Limited (SVL or the Group) by one notch to CariA (Local Currency Rating) and CariA- (Foreign Currency Rating) and reaffirmed the Jamaica national scale ratings of jmAA- (Local Currency Rating) and jmA+ (Foreign Currency Rating).
• The regional scale local currency rating indicates that the level of creditworthiness of this obligor, adjudged in relation to other obligors in the Caribbean is good. The national scale local currency rating indicates high creditworthiness compared to other obligors in Jamaica.
• The one-notch upgrade on the regional scale ratings is attributed to the improvement in the credit risk profile of the sovereign over the last 12 months following the lifting of the coronavirus (COVID-19) pandemic restrictions.
• This resulted in consistent real gross domestic product (GDP) growth over the last four quarters, improved overall fiscal operations and a reduced debt to GDP estimated at around 77.9% as of March 2023, lower than 84.1% reported as of March 2022.
• The agency highlighted that the stable outlook is based on its expectation that the group’s financial performance in 2023, will continue its upward trajectory from its six-month performance underpinned by continued growth in the group’s core business, launch of new products, business expansion, and digitalization initiatives.
• Therefore, CariCris expects SVL to maintain its good profitability and debt-serving metrics over the next 12 to 15 months.
• Nonetheless, the ratings are tempered by the group’s high sovereign risk exposure which can present downside risks to SVL’s operations and earnings, notwithstanding improving economic conditions.
• Overall, a higher rating reinforces the creditworthiness of SVL. A better rating could translate into better credit terms should the company decide to raise additional debt in the near term.

(Source: CariCRIS Ratings)

• The Government’s Productive Inputs Relief (PIR) scheme has generated benefits totalling up to $1.4 billion for the period to date between 2021 and 2023.
• Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill, made the announcement during his contribution to the 2023/24 State of the Nation Debate in the Senate on Friday (October 6).
• The PIR scheme facilitates duty-free importation of specific items intended for productive use. It aims to spur an expansion of productive activities in these areas.
• Under the system, the Government has targeted specific sectors – agriculture, manufacturing, tourism, healthcare, and the creative industries – which are being leveraged to promote and stimulate economic growth.
• Companies operating in Jamaica can benefit from wide-ranging incentives, which are applied at two main stages – import duty and income tax relief.
• These incorporate, among other things, relief on Customs Import Duties, normally charged when importing goods into the country; additional Stamp Duties, usually applied at the port on certain products; and Corporate Income Tax, generally levied on the profit income of businesses.

(Source: JIS News)

• After posting weak 1.0% y-o-y growth in Q223, Fitch Solutions expects the Dominican economy to pick up in H223 due to a well-performing US economy, ultimately growing by 2.5% this year. This marks an upward revision from its previous forecast of 2.3%.
• Fitch forecasts that 2023 US real GDP growth will be 2.1% and that it will continue to perform well through mid-2024, which will fuel demand for Dominican goods and services exports.
• Notably, Dom Reps tourism sector – approximately 15% of headline GDP – is heavily fueled by US nationals, who make up over one-third of total tourist arrivals. 
• Additionally, US consumer demand will also drive the Dominican manufacturing sector; in 2022, around 55% of Dominican exports were destined for the United States, predominately medical and electrical equipment and machinery. This is likely to bring down unemployment from its current level of 5.6% and increase consumer spending
• Fitch expects that the Dominican economy will report faster growth in 2024 at 2.7%, though the agency believes it will slow in H224 as the US enters a mild recession.
• Risks to Fitch’s forecast are tilted towards the upside, as the US recession may be more moderate than expected, which would lead to continued US consumer spending that would benefit the Dominican economy.

(Source: Fitch Solutions)