• The Bank of Jamaica’s (BOJ’s) Monetary Policy Committee (MPC) unanimously decided to maintain the policy rate at 5.50% at its August 14 and 17, 2026 meetings and continue measures to preserve relative stability in the foreign exchange (FX) market. The decision reflects rising inflationary pressures and the uncertainty from the unresolved Middle East conflict and intensifying Russia-Ukraine war, which have kept international commodity prices, particularly crude oil, elevated.
• Headline inflation accelerated to 7.5% in July 2026, up from 6.7% in June and 3.3% a year earlier. It marks the second consecutive month above the upper end of the BOJ’s 4.0%–6.0% target range but comes below the Central Bank’s projections. July’s core inflation^[1] outturn was 5.2%, above the 5.0% recorded for June 2026 and the 4.3% recorded for July 2025.
• The MPC expects headline inflation to remain above the 6.0% ceiling during the September 2026 quarter before moderating towards the target range. Higher international energy and transportation costs, stronger domestic demand associated with post-Hurricane Melissa reconstruction spending, and rising agricultural prices are expected to maintain upward pressure on inflation in the near term. However, the relatively stable FX rate, which ranged between J$159.7589 and J$156.7435, is expected to continue to limit the extent to which higher international prices are transmitted to domestic consumers.
• That said, inflation risks remain firmly skewed to the upside, with the outlook particularly vulnerable to further escalation or prolongation of geopolitical conflicts. Higher global oil prices could feed through to electricity, transportation and other goods and services, while worsening drought and heat conditions could put upward pressure on agricultural prices and create additional second-round inflationary pressures. The MPC also flagged stronger-than-expected domestic spending as an upside risk, although weaker consumer purchasing power could provide some offset by constraining demand.
• With risks over the next eight quarters skewed to the upside, the MPC reiterated that it will closely monitor incoming data and remains prepared to tighten policy if inflationary pressures become more persistent. However, Jamaica’s healthy international reserves at J$6.64Bn as at July 2026 (+2.3% month on month) and stable FX rate continue to provide an important buffer against external shocks, providing the BOJ with some capacity to assess the current inflation spike before adjusting its policy stance.

(Sources: BOJ & NCBCM Research)

^[1] Strips out the prices of agricultural food products and fuel.

• The Planning Institute of Jamaica (PIOJ) released preliminary estimates showing that the economy contracted by 2.9% in the April–June 2026 quarter (Q2 2026) relative to the same period in 2025. The decline was broad-based, with the Goods Producing Industry down 6.4% and the Services Industry down 1.7%, as several industries continued to recover from the disruption caused by Hurricane Melissa while facing other weather-related and geopolitical pressures.
• Within the Goods Producing Industry, Mining & Quarrying recorded the steepest contraction at -23.9%, followed by Agriculture, Forestry & Fishing at -17.0%. Manufacturing, however, expanded by 1.0%, while Construction posted marginal growth of 0.3%. The Mining decline remained severe following contractions of 37.5% in Q4 2025 and 23.5% in Q1 2026, underscoring the continued weakness in bauxite and alumina production. Agricultural output also remained significantly below year-earlier levels, although the pace of contraction improved modestly from -18.3% in the previous quarter.
• Within the Services Industry, Accommodation & Food Service Activities remained the weakest-performing segment, contracting 12.2%, although this represented further improvement from the 31.0% decline recorded in Q4 2025 and a 16.6% decline in Q1 2026. Electricity, Water Supply & Waste Management fell 4.1%, Transport & Storage declined 3.9%, Real Estate & Business Activities fell 2.2%, and Information & Communication contracted 2.0%. Education, Health & Other Services also declined 1.8%. Offsetting some of these declines were Financial & Insurance Activities (+1.9%), Wholesale & Retail Trade (+0.2%), and Public Administration & Defence (+0.1%).
• The April–June 2026 performance marks a further moderation in the pace of contraction compared with the previous two quarters, suggesting that the Jamaican economy is gradually moving through the recovery phase following Hurricane Melissa. The faster pace of recovery across most industries, along with the full operationalisation of the National Reconstruction and Resilience Authority (NaRRA), represents potential upside to near-term activity. However, lingering weather-related shocks like the forecasted super El Niño this year, worsening geopolitical tensions, and delays in the execution of major infrastructure projects remain key drags on growth.
• Looking ahead, the PIOJ projects the economy to contract by 0.5%–1.5% in July–September 2026, as lower production in several industries continues to weigh on activity amid the ongoing recovery from Hurricane Melissa and broader geopolitical and weather-related challenges persist. For Fiscal Year 2026/27, however, growth is projected within the range of 1.0%–3.0%, reflecting expectations of a broader recovery as productive capacity is restored and industries return toward normal operations.

(Sources: PIOJ & NCBCM Research)

• Agriculture and Marine Resources Minister Jomo Campbell said The Bahamas is stepping up negotiations with the United States (US) to reduce its new 12.5% tariff, with the government hoping to get the country back to the 10% rate that applied before July 24.
• Mr Campbell said there has been “a lot of back and forth” on the issue, with more than 2,100 meetings being held involving more than 60 countries affected by the US tariff measures. The government is also hoping to meet with the US ambassador again to present The Bahamas' position on the way forward.
• The government had also been seeking to address the US position that led to The Bahamas receiving the higher tariff rate, after Washington cited concerns over the country's prohibition and enforcement of a ban on imports produced using forced labour.
• His comments indicate that the government has not yet secured a reduction or exemption, with diplomatic and trade discussions continuing as officials work to establish the terms for a lower tariff burden on Bahamian exports.
• The issue is particularly significant for the fisheries sector, with the United States serving as a major market for Bahamian seafood exports and crawfish and stone crab among the products the government has specifically sought to exempt from the new tariff.

(Source: The Tribune)

• Higher stamp duty revenues, financial fees and record tourism numbers contributed to a higher-than-expected surplus for the first half of 2026, according to figures just released.
• The government said it is optimistic about the current state of the nation’s finances, which are showing a surplus of $252.3Mn, but plans to keep a close eye on how things progress for the rest of the year.
• As required by law, the latest quarterly financial report for the first six months of the year has just been published and shows that the current surplus is running at $67.3Mn (36%) ahead of the projected surplus of $185Mn.
• This is due to revenues of $856.2Mn being $43.8Mn higher than expected for the period. The bulk of the uplift, $33.3Mn, is owed to higher coercive revenues, which include various fees and duties such as import duties, company registration fees and stamp duty.
• The record number of visitor arrivals resulted in tourist accommodation charges of $3.7Mn higher than budgeted, while mutual fund and private fund fees were $8.7Mn and $9.3Mn higher than the first six months of last year, respectively, both higher than expected.
• However, not all revenues surpassed expectations. Drivers’ licences, work permit fees, some import duties and special economic zone fees all came below what was predicted. Work permit fees raised $800,000 less than last year and $3.7Mn less than expected, while drivers’ licences and special economic zone grant fees had been expected to rise by $4.0Mn and $3.4Mn, respectively, but were in fact the same as last year.
• Minister for Finance and Economic Development Rolston Anglin said, “The results for the 2026 half-year are extremely encouraging. Revenues have outperformed the budgeted expectations. This demonstrates a strong, confident economy. We have underspent on the expenditure side as we have been responsible stewards of the public purse. So overall to 30 June I am extremely pleased with the results, but the Government will, as ever, remain vigilant over the second half of 2026.”

(Source: Cayman Compass)

• Concern about inflation deepened at the Federal Reserve's (Fed’s) meeting last month, with "several" policymakers ready to raise interest rates and "many" saying a hike in borrowing costs would be ‌needed if inflation does not decline to the U.S. central bank's 2% target, the minutes of the session showed on Wednesday.
• The policymakers who favoured a rate increase at the meeting "remarked that price pressures appeared broad-based and judged that the (policy-setting) Committee should adopt a more restrictive policy stance to meet its commitment to achieving its price stability and maximum employment goals on a sustained basis." Failure to do so, they argued, would risk a steeper and potentially more costly sequence of tightening moves at a later stage.
• The Fed voted at that meeting to hold its benchmark interest rate ⁠in the current 3.50%-3.75% range, but with three policymakers dissenting in favour of a quarter-percentage point hike. A larger group of "many" participants "assessed that policy tightening would likely be necessary if inflation did not decline," the minutes said. The minutes, covering Fed Chairman Kevin Warsh's second meeting as head of the central bank, showed central bankers already delving into some of the broader issues he wants to pursue as part of a possible overhaul of how the Fed operates.
• Warsh also asked for input from the Committee on whether it would be better for the Fed to hold only six meetings a year rather than the current eight, allowing for two full months of data ⁠to accumulate each time. No decisions were made regarding this issue, and the 2026 schedule of meetings would not be altered.
• The minutes drew little reaction in financial markets. An announcement earlier on Wednesday that the Treasury would double its buyback of longer-term U.S. government debt had eased upward pressure on yields, and there was no mention of support for a rate cut. This represents how the Fed's policy debate has shifted over the course of a year that began with an expectation that the central bank would be able to lower borrowing costs this year as inflation slowed.
• Price pressures, ⁠however, have continued to build, particularly after the Trump administration joined Israel in a war with Iran. Shipments of oil and gas through the strategic Strait of Hormuz continue to be constrained almost six months after the start of the conflict.
• The Fed is expected to hold its policy rate steady again at its September 15-16 ⁠meeting after recent data showed inflation easing slightly and firms unexpectedly shedding jobs in July. The data has left officials still divided over whether rate hikes will be needed to slow inflation further, but also more cautious about the strength of the labour market and the risks to their goal of maintaining full employment.

(Source: Reuters)

• A jump in household energy bills pushed British inflation ​to a four-month high in July, matching forecasts, and it looks set to rise further as the war in Iran grinds ‌on with no end in sight. Annual consumer price inflation rose to 2.9% in July from a 15-month low of 2.6% in June, the Office for National Statistics said on Wednesday, reflecting a 13% rise last month in the maximum tariff British regulators allow energy firms to charge households.
• Inflation likely ​rose to 2.9% in July from 2.6% in June, further above the Bank of England’s (BoE's) 2% ⁠target, according to a separate Reuters poll ahead of official data due on Wednesday. But in its latest set ​of quarterly forecasts, the BoE expects inflation to rise above 3% later this year. Still, nearly 90% (56 of 64) of economists polled ​by Reuters expect the Monetary Policy Committee to leave rates unchanged at 3.75% this year, up from 83% last month. Six expected a hike by then, and another two forecast a cut. The poll was conducted August 13-18.
• The BoE is likely to be reassured by the absence of nasty surprises in Wednesday's data, and ​figures a day earlier showed a slightly cooler labour market, which may limit the lasting impact of inflation caused by the Iran war. The central bank was burned by the scale of price rises in 2022 after Russia's full-scale invasion of Ukraine, which, combined with a tight post-COVID job market, drove British inflation above 11%. U.S. President Donald Trump ​said on Tuesday that no talks were taking place with Iran and insisted the Strait of Hormuz was open, contradicting Iran's assertion that the critical ​waterway remained shut to shipping. Sterling and British government bond futures showed little immediate reaction to the inflation figures.
• Core ​inflation, which excludes the impact ⁠of energy and food prices, came in a little higher than expected at 2.6%, unchanged from June, rather than the 2.5% median Reuters poll prediction. Services inflation, closely watched by the BoE as a gauge of domestically generated price pressures, ​eased as the central bank and economists had expected, to 3.4% in July from 3.6%. Food and non-alcoholic drink ​price inflation, which economists ⁠had expected to surge after the start of the Iran war, cooled to 1.3%, an almost two-year low, adding to signs that fierce supermarket competition has helped to absorb the shock.

(Source: Reuters)

• Seprod Limited (Seprod) and its subsidiaries, A.S. Bryden & Sons Holdings Limited (ASBH) and Caribbean Producers (Jamaica) Limited (CPJ), faced similar headwinds in Q2 2026, but differences in diversification and tourism exposure produced sharply contrasting results. Seprod proved the most resilient, growing net profit 16.3% despite a 2.6% revenue decline. ASBH remained profitable, but earnings plunged 92.3%. However, CPJ swung to a loss as depressed hotel and restaurant volumes continued to weigh on its hospitality-heavy business.

Seprod’s Diversification Cushions Weak Demand

• Seprod’s diversified operations and cost discipline provided the strongest buffer against weaker demand in its subsidiaries. Revenue declined 2.6% YoY to J$36.51Bn, primarily reflecting weaker demand from Jamaica’s tourism sector, while gross profit fell 3.8% to J$9.75Bn as elevated energy and raw material costs added further pressure. Consequently, gross profit margin edged down to 26.7% from 27.0%. However, tighter cost management more than offset this decline, with other operating expenses declining 5.9%.
• The improvement below the gross-profit line allowed Seprod to convert weaker sales into stronger earnings, with Q2 net profit rising 16.3% to J$687.64Mn and net margin improving to 1.9% from 1.6%. The first-half performance was even stronger, as net profit increased 62.4% to J$2.34Bn despite a 3.0% reduction in revenue to J$72.93Bn. However, the H1 result benefited from the gain associated with the disposal of International Biscuits Limited.

Higher Costs Deepen ASBH’s Earnings Pressure

• ASBH faced broad weakness across its regional operations, resulting in significantly greater earnings pressure. Q2 revenue declined 6.8% to US$139.80Mn amid softer demand for premium beverages likely due to the Special Consumption Tax (SCT) levied on sugary and alcoholic beverages in May 2026 in Jamaica and industrial equipment in Trinidad & Tobago and the slowdown in Jamaica’s tourism sector. Operating profit fell 30.7% to US$5.91Mn, while higher finance costs contributed to earnings plunging 92.3% to US$0.21Mn. Finance costs increased 16.4% YoY to US$4.12Mn. The weakness extended through H1, with net profit for the period falling 95.4% to US$0.28Mn as revenue declined 6.5%.

CPJ Bears the Brunt of Tourism Disruption

• CPJ remained the most exposed to the lingering effects of Hurricane Melissa, demonstrating the downside of its greater concentration in Jamaica’s tourism and hospitality sector. Topline plunged 26.1% YoY to US$31.33Mn as major hotel and restaurant customers remained closed, partially reopened or operated below normal occupancy levels. Jamaica sales were down approximately 34%, while the St. Lucia business proved comparatively resilient. The volume decline also reduced CPJ’s ability to absorb fixed manufacturing and logistics costs, pushing gross profit down 30.4% to US$8.00Mn and compressing gross profit margin by 158bps to 25.5%.
• Unlike Seprod and ASBH, CPJ was unable to offset its weaker topline through cost containment, resulting in a return to losses. Administration and other operating expenses increased 6.1% to US$9.30Mn amid elevated repair, utility and restructuring costs, which contributed to the company recording a net loss of US$0.47Mn compared with net profit of US$1.49Mn in Q2 2025. The H1 picture was similarly weak, with revenue declining 27.0% to US$64.47Mn and the Group recording a US$1.64Mn net loss versus a US$3.29Mn profit in the prior-year period.

Tourism Recovery Offers Upside, but Valuations Diverge

• Looking ahead, Jamaica’s tourism recovery should provide a common tailwind, but the pace and magnitude of the earnings rebound is likely to remain uneven. CPJ expects operating conditions to strengthen during H2, particularly in Q4 as hotel occupancy normalises, while its continued integration into the wider Seprod and Brydens platform should create opportunities for distribution synergies, improved procurement and greater operating efficiency. ASBH is similarly pursuing regional integration, centralised warehousing, brand expansion and cost rationalisation, with its improving cash generation and lower borrowings providing additional support. Seprod enters this recovery phase from the strongest position of the three, supported by greater diversification, improved liquidity and ongoing debt reduction. However, elevated input and energy costs, macroeconomic uncertainty and the pace of Jamaica’s tourism recovery remain key downside risks to the broader group’s H2 performance.
• Despite the longer-term benefits expected from integration, investors appear to be more focused on the near-term challenges and have remained cautious on all three stocks. As at August 18, 2026, Seprod, ASBH and CPJ closed at J$75.01, J$5.15 and J$24.98, respectively, representing YTD declines of 10.6%, 32.1% and 17.7%. At these prices, Seprod and ASBH trade at P/E multiples of 10.15x and 6.28x, respectively, below the Main Market Distribution & Manufacturing average of 14.01x, while CPJ trades at a substantially higher 31.81x. The valuation gap is particularly notable given CPJ’s current earnings weakness, suggesting that its premium multiple embeds greater expectations for an earnings recovery as Jamaica’s tourism sector normalises.

(Sources: JSE & NCBCM Research)

• Honey Bun (1982) Limited (HONBUN) and Consolidated Bakeries (Jamaica) Limited (PURITY) delivered sharply contrasting performances in their most recent financial quarters. HONBUN rose to the occasion, with earnings climbing 62.5% on stronger demand and increased production capacity, while PURITY felt the heat, swinging to a J$11.10Mn net loss as rising operating and financing costs weighed on profitability.
• Honey Bun’s expansion appears to be adding the right ingredients for growth, with the completion of its Angels manufacturing expansion helping to drive a robust third quarter ended June 30, 2026 (Q3 2025/26). Gross operating revenue increased 22.5% YoY to J$1.26Bn, supported by sustained demand, product innovation, increased production capacity and continued market penetration. Gross profit rose 19.1% to J$558.78Mn; however, higher raw material costs took a small bite out of margins, with gross margin easing to 44.5% from 45.8%.
• Despite higher expenses, HONBUN still had enough dough to deliver stronger operating profitability. Operating expenses increased during the quarter as the company strengthened its distribution, commercial and organisational capabilities, while depreciation rose following the commissioning of the expanded Angels production facility. Nevertheless, operating profit before finance costs and taxation more than doubled to J$89.73Mn. Furthermore, profit before tax increased by 71.4%, while operating margin rose to 5.1% from 3.7%.
• PURITY, by contrast, struggled to turn its revenue into bread and butter, as higher operating costs eroded profitability for its second quarter ended June 30, 2026 (Q2 2026). Revenue crumbled 2.7% to J$402.81Mn, while gross profit declined 5.3% to J$166.22Mn, resulting in gross margin narrowing 110bps to 41.3%. Total operating expenses rose 6.1% to J$173.80Mn, driven by higher depreciation from recent capital investments, increased distribution costs and continued investment in operational capabilities. As a result, PURITY moved from a J$11.70Mn operating profit in Q2 2025 to a J$7.58Mn operating loss in Q2 2026, while the bottom line went from baked to burnt, moving from J$5.53Mn profit to a J$11.10Mn loss.
• Despite a solid Q2 for HONBUN, the full-year performance for both companies was weak as they remain in the middle or near the end of significant investment programmes aimed at strengthening their manufacturing platforms. HONBUN’s nine-month revenue rose 13.5% although net profit declined 58.2% to J$62.9Mn as finance costs and depreciation increased sharply following the Angels expansion. PURITY’s H1 revenue increased 7.5%, but net profit fell 26.3% to J$18.85Mn as higher operating, depreciation and financing costs, affected by its capacity and process-improvement programme, absorbed the benefits of revenue growth. Going forward, investors will be looking to see whether both companies can translate their expanded capacity into sufficient volume growth to spread these costs and bake stronger margins into future earnings.
• Since the start of the year, HONBUN and PURITY have seen 12.6% and 28.3% share price declines to close the market at J$6.20 and J$1.32, respectively, on August 18, 2026. At their current market prices, HONBUN and PURITY trade at P/B multiples of 1.86x and 0.18x, compared with the Junior Market Manufacturing sector average of 1.28x.

(Sources: JSE & NCBCM Research)

• Trinidad and Tobago's (T%T’s) economy contracted by 0.5% year over year (YoY) in 2025, underpinned by a weak Q4, marking the first full-year economic contraction since 2021. Several key sectors contributed to 2025's weak performance, with notable contractions in domestic trade (-4.0% y-o-y), construction (-3.2%) and public administration (-2.7%).
• Despite this weakness, BMI expects the economy to return to growth in the near term, expanding by 0.8% in 2026 and by 2.6% in 2027. This will be driven by a rebound in the energy sector as new gas projects come online. BP's Cypre field, which came online in April 2025 and completed drilling in December, will continue to boost overall production in 2026.
• Overall, LNG output has returned to year-over-year growth since December 2025, most recently expanding by 23.3% YoY in April 2026. Shell's Manatee field and BP's Ginger field, expected in 2027, will lift production further. Access to reliable sources for natural gas imports, potentially including the all-important Dragon gas field, would further support a rebound in the energy sector in 2026 and 2027. Favourable energy prices should support inbound investment too, despite external uncertainty.
• However, economic conditions in the non-energy sector were softening earlier this year. Trinidad and Tobago's economic activity index shows continued weakness to start 2026, with a pronounced pullback in the non-energy sector (-2.9% YoY) that was larger than the drop in the energy sector (-0.5% YoY). This leading indicator, which tracks quarterly GDP, suggests another contraction to start 2026, a view supported by more granular domestic economic indicators. Credit growth continued to slow in 2026 through April (4.0% YoY, down from 9.1% a year prior) on weak business-sector borrowing, local sales of concrete fell (13.6% YoY) for a fifth consecutive quarter in Q1 2026, and the cashless payments index showed continued weakness to start 2026, slowing to just 3.4% YoY from 8.5% a year prior.
• Risks to the near- and medium-term outlooks are tilted slightly to the downside. Global economic uncertainty will likely weigh on inbound investment, alongside business-environment headwinds from stubborn violent crime and ongoing states of emergency. Furthermore, potential delays to energy projects coming online is a downside risk to the 2026 and 2027 forecasts. On the upside, the successful development of the long-awaited Dragon gas project is an upside risk to growth in the near and medium terms, both through increased investment flows and growth in natural-gas-dependent sectors as availability constraints fade.

(Source: BMI)

• Ocean carriers are raising surcharges as the Panama Canal continues to take precautionary measures in case of a drought.
• The Panama Canal has been implementing water-saving measures to prepare for potential weather impacts from the looming El Niño climate pattern expected in the second half of 2026. A drought hit the canal in 2023 and 2024, leading to longer transit times and higher transit fees.
• In its latest draft adjustment, the major waterway announced that the maximum authorized draft for vessels transiting the Neopanamax locks will be 48 feet, effective Aug. 26. The next draft is set at 47.5 feet, effective Sept. 3.
• The Panama Canal had already implemented two separate draft measures earlier this summer. These reductions represent the fourth and fifth draft adjustments announced by the Panama Canal Authority.
• The measures are the result of operational planning informed by lessons learned during the 2023–2024 period, as well as hydrological analyses and historical data that support the canal’s operational decision-making process,” according to a press releasefrom the Panama Canal.
• Due to the ongoing draft restriction, ocean carriers have recently updated their previous Panama Canal surcharges. 

(Source: SupplyChainDive)