•  Bank of Canada Governor Tiff Macklem on Thursday said interest rates may not be high enough to bring inflation back down to target, sending a hawkish message after holding borrowing costs at a 22-year high a day earlier.
• On Wednesday, the Bank of Canada (BoC) kept its key rate at 5%, noting the economy had entered a period of weaker growth, but said it could hike again should price pressures persist. Inflation has remained above the bank's 2% target for 27 months.
• In a speech to the chamber of commerce in Calgary, Alberta, Macklem said one possible reason for inflation staying above target was that it might be taking longer for rates to work, but the other possibility "is that monetary policy is not yet restrictive enough to restore price stability".
• The central bank hiked rates by a quarter point in both June and July in a bid to tame stubbornly high inflation. However, Macklem said that now "there is little downward momentum to underlying inflation".
• Canada's gross domestic product unexpectedly shrank an annualized 0.2% in the second quarter, a sign the economy could have already entered a recession as higher rates sink in. But inflation accelerated in July to 3.3% and core measures remained at about 3.5%.

(Source: Reuters)

• Finance Minister Dr. Nigel Clarke states that Jamaica has made significant strides in fulfilling most of the Financial Action Task Force (FATF) requirements. However, there remain three crucial areas to address before removal from the FATF grey list.
• The three outstanding matters are to operationalise risk-based supervision of beneficial ownership by the Companies Act, of lawyers by the General Legal Counsel, and of trust and corporate service providers by the Financial Services Commission.
• In a discussion with Radio Jamaica's Business Reporter Javaughn Keyes, Dr. Clarke expressed confidence in meeting the October deadline. Dr. Clarke emphasized that upon fulfilling these three conditions, Jamaica will formally request removal from the FATF grey list.
• The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog. It sets international standards that aim to prevent these illegal activities and the harm they cause to society. Countries which fall on the grey list are subject to increased monitoring, as the entity deems them as needing to address certain gaps in their terrorist financing and money laundering regimes.
• Achieving removal from the FATF grey list will elevate Jamaica's international financial reputation, potentially boosting foreign investments. This move indicates a robust commitment to fighting financial crimes, streamlining international transactions, and fostering a safer financial environment. Adhering to FATF's standards will also position Jamaica in line with global best practices, reducing external scrutiny and enhancing trade relations.

  (Source: RJR News)

• To encourage consistency in the benefits from Jamaica’s tourism sector, the Minister of Tourism, Hon. Edmund Bartlett, emphasized the importance of a greater share for the nation's farmers.
• Highlighting their pivotal role as a reliable source market for hotels, Minister Bartlett said the aim going forward is to create new avenues of collaboration. This approach will allow farmers to capitalize on available opportunities and enhance their earnings.
• While addressing farmers, business representatives, and other stakeholders in Ulster Spring, Trelawny, on September 2 — an event that saw the presentation of fifty 650-gallon water tanks to farmers — Minister Bartlett emphasized the undeniable contributions of local farmers to the tourism sector.
• Despite challenges from COVID-19, the Jamaican tourism industry has seen impressive growth over the years, welcoming millions of visitors each year. This boom has significantly elevated the demand for locally sourced agricultural products like fruits, vegetables, and spices.
• In the meantime, farmers are urged to take a closer look at the Agricultural Linkages Exchange (ALEX) programme, which serves as a platform for connecting local farmers with buyers from the tourism sector, enabling direct trade and fostering mutually beneficial partnerships. Through this programme, he said, farmers can gain access to a wider market, while hotels can source fresh, local produce sustainably.
• Mr. Bartlett highlighted that the Tourism Ministry is committed to working closely with farmers and providing the necessary support to ensure their success, noting that investments in infrastructure, technology, and market access will form the cornerstone of these efforts, empowering farmers to maximise their potential in the tourism value chain.
• The emphasis on stronger farmer-tourism sector collaboration promises a win-win situation: it bolsters the nation's agricultural sustainability, ensures tourists experience authentic Jamaican produce, and translates to economic growth by keeping revenues within the country, further enriching both sectors.

(Source: JIS News)

• Mexican inflation is anticipated to have slowed in August for the seventh straight month, with the closely watched core index expected to return to 2021 levels, a Reuters poll showed on Tuesday, September 5, 2023.
• Inflation levels, however, are expected to remain above the Bank of Mexico's target range, boosting bets that the central bank will continue to hold its key interest rate at the current level to tame rising prices. The median forecast of 10 analysts surveyed was for annual headline inflation to ease to 4.61% in August, which would be the lowest rate since February 2021. 
• Headline inflation surged to a record 8.7% last year due to elevated food and energy prices stemming from geopolitical conflict. Meanwhile, annual core inflation is forecast to have slowed to 6.12%, which would mark its lowest level since December 2021. The closely watched core price index is considered a better gauge of price trends given that it strips out some volatile food and energy prices. 
• The Bank of Mexico, which has a target range for inflation of 3% plus or minus one percentage point, last month voted to keep its benchmark interest rate steady at a historic high of 11.25%, with board members suggesting it will stay at that level for an extended period of time to bring inflation to target. "The discussion of whether we are going to reduce the interest rate is not on the table yet," Bank of Mexico Governor Victoria Rodriguez said during a presentation last month.
• In August alone, consumer prices likely rose 0.52% compared to July, while core inflation is forecast to have risen 0.30%, according to the poll. 
• Mexico's national statistics agency (INEGI) is expected to publish consumer price index data for August on Thursday.

(Source: Reuters)

• Travelers are seeking more affordable destinations in 2023, with personal finance experts advising budgeting and planning according to a recent report by Squaremouth Travel Insurance Company.
• The Dominican Republic ranks fifth among these destinations with an average travel cost of $4,497. While the cost is rising, the country has seen a 14% increase in tourist arrivals from January to July compared to the same period last year.
• Being the most affordable was Colombia (US$3,344) and Mexico (US$3,878). 
• According to the Global Travel Agency, Puerto Rico is currently the cheapest Caribbean island to visit (followed by Bermuda at number 4) costing $3,907 on average. The Bahamas is only 3.5% pricier than the Dominican Republic at $4,658. Jamaica and Aruba followed with costs of $4,698 and $4,917, respectively.
• While Asia is a favoured destination for backpackers, visiting Vietnam and the Philippines averages $5,181 and $5,330, respectively. Expensive destinations have also seen attention, with 21,000 people spending over $133 million on these trips, averaging $11,000.
• Africa emerges as the most expensive continent for tourism. Visiting Congo costs $32,400 per person, compared to Botswana’s $17,753. Other destinations like Antarctica, Zimbabwe, Tanzania, and Kenya also surpass the average $4,000 cost of visiting the Dominican Republic. Additionally, travellers are purchasing travel insurance for an average of $717 to ensure safe journeys.
• The rise in tourism to budget-friendly destinations like the Dominican Republic and Colombia offers significant benefits. Increased tourist arrivals boost local economies, create jobs, and spur infrastructure development. Moreover, this growth elevates their global tourism profile, fostering cultural exchange and attracting potential foreign investments.

(Source: Squaremouth Travel Insurance & CariCris)

• U.S. economic growth was modest amid a cooling labour market and slowing inflation pressures in July and August, a Federal Reserve report published on Wednesday showed, buttressing expectations that the central bank was either done or close to being done, with interest rate increases.
• The U.S. central bank is widely expected to leave its benchmark overnight interest rate in the current 5.25%-5.50% range at the end of its Sept. 19-20 policy meeting, while leaving open the door to a final quarter-percentage-point hike before the end of the year.
• Data since the last Fed rate hike six weeks ago has tended to support that view, with the economy adding an average of 150,000 jobs per month over the last three months, down sharply from the prior three months. Inflation, as gauged by the Fed's preferred measure, was 3.3% in July, down from 7% last summer.
• That's why even a hawkish policymaker like Fed Governor Christopher Waller was able to say that the central bank has time to take in new data before it decides whether it has to raise rates again, or can hold them at current levels.
• Still, prices continue to rise faster than the Fed's 2% goal, employers are adding many more than the monthly 100,000 jobs needed to meet population growth, and economic output appears to be far outpacing the less-than-2% annual growth rate Fed officials say is sustainable in the long run.
• The New York Fed district said migrants were putting strains on the local safety net. The report said "housing affordability, homelessness, and food insecurity continued to challenge communities" in the San Francisco Fed district, adding that "temporary housing shelters and food banks saw increased demand in recent weeks, especially from older adults."
• The report noted that housing remains an issue and that the supply for single-family homes "remained constrained." Home building was picking up, the Fed said, but building affordable properties is being strained by high financing costs and rising insurance premiums.

(Source: Reuters)

• Analysts see Brent crude climbing to levels last seen in the first months of the Ukraine war after Saudi Arabia and Russia extended production cuts. Brent crude oil was trading on Wednesday morning at around $90 a barrel for the second straight day and is up 25% since June thanks to the prospect of more production cuts by leading oil exporters.
• The surge is sending ripples through the global stock and bond markets. The prospect of higher prices at the pump and throughout manufacturing may spur diplomatic efforts to increase supply and tamp down any inflationary effects on the global economy.
• Saudi Arabia and Russia are behind the price increase. The two said on Tuesday that they would extend their oil production cuts — equivalent to a combined 1.3 million barrels a day — through year-end. The duration of the cuts surprised market watchers, as did Saudi Arabia’s hint that it may make even deeper cuts in the coming months.
• There are wild cards to consider. China’s sputtering economy could sap demand for oil, keeping prices down. Costlier oil could also affect interest rates. “Higher oil prices will only increase the likelihood of more fiscal tightening, especially in the U.S., to curtail inflation,” León said.
• Global leaders may seek relief from sanctioned oil exporters. Iran’s oil exports have surged since Saudi Arabia began cutting its production this summer, and Bloomberg reported last week that Tehran and Washington have held back-channel talks to keep crude flowing to make up for supply reductions elsewhere. Venezuela, another exporter under sanctions, has reportedly turned to Beijing to help it revive production.

(Source: NY Times)

• Prime Minister, the Most Hon. Andrew Holness, says Jamaica is poised for sustainable growth and even lower unemployment in the times ahead.
• Addressing residents, business interests, and other stakeholders at a Town Hall meeting at the Harmony Beach Park in Montego Bay, St. James, on August 31, the Prime Minister said it is against this background that he is calling on Jamaicans to maintain optimism and hold steadfast during times of change.
• He highlighted the country’s record low unemployment rate of 4.5%, while emphasizing the importance of remaining positive and focused, based on the progress achieved thus far.
• Jamaica’s unemployment rate has hit an all-time low, signalling the success of various government initiatives and economic policies implemented over the past years. In line with this, Mr. Holness noted that good things are happening in Jamaica by way of sound fiscal policies and the country’s proactive approach to good governance, which are reflective of strides in creating an environment that fosters economic growth and job creation.

(Source: JIS)

• 138 Student Living is looking to raise in excess of J$2 billion via an additional public offer (APO). The company released the prospectus on Friday.
• The offer will be opened on September 8 and close on the 6^th of October. The company will issue 513.97 million new ordinary shares, of which 195.46 million shares will be accessible to the general public for J$4.40 apiece.
• The company has also set aside 318.52 million shares for current shareholders, staff members, and other strategic partners. Those shares will be made available at $4.05.
• The proceeds of the APO will be used to reduce the Company’s debt by J$1.5 billion to J$2.0 billion; a 36% - 48% reduction.  This reduction in debt is expected to reduce the Company’s interest cost by J$112.5 million to J$160 million and principal payments by J$143 million to J$260 million per annum. This would result in estimated total savings between J$255.5 million to J$420 million which could be annually distributed to shareholders via dividends.

  (Source: JSE)

• The economy of Trinidad and Tobago (T&T) grew by 1.55% in 2022 year-on-year and by 3% in the first quarter of this year, the Central Statistical Office (CSO) said in a statement on Sunday titled Annual and Quarterly Gross Domestic Product.
• The annual growth was mainly in the non-energy sector – followed by some growth in areas of the energy sector – but with contraction in the agriculture and petrochemical sectors.
• The main areas of growth in the non-energy sector were professional, scientific and technical services (47.6%); transport and storage (27.5%); accommodation and food services 19.0%; trade and repairs (6.1%); manufacturing 6.1%, and construction 4.3%. These increases were partially offset by a slowdown in economic activity in agriculture (11.5%), financial and insurance activities (3.1%), and other service activities (1.3%).
• The energy sector was a mixed bag. The energy sector recorded increased activity in asphalt 25.6%; refining (including LNG) (11.6%); petroleum support services (7.5%); natural gas exploration and extraction (5.8%) and petroleum and natural gas distribution (3.1%). However, declines recorded in condensate extraction (16.5%); manufacture of petrochemicals (6.8%), and crude oil exploration and extraction (0.1%) offset the increases recorded in the other energy industries resulting in overall negligible growth in the energy sector.
• Furthermore, the main industries contributing to the 3.0% first quarter growth were mining and quarrying 2.6%; manufacturing 1.6%; trade and repairs 10.9%; transport and storage 16.7%; and accommodation and food services 17.5%.
• That being said, real GDP growth of 2.2% in 2023 is forecasted for T&T, down from 2.7% in 2022. The deceleration will be underpinned by private consumption as the removal of energy subsidies and the rise in global commodity prices at the start of the year erode purchasing power.

(Source: Trinidad & Tobago Newsday)