• The Bank of Jamaica (BOJ) will raise its policy rate by a further 50 basis points (bps) to 6.50% at its November 2026 meeting, following the unanimous 50bps hike to 6.00% in September, according to BMI. The tighter policy stance is expected to continue through year-end as elevated inflation pressures risk further unanchoring of inflation expectations and increasing second-round effects. This marks a revision from the research company’s previous expectations that rates would hold through 2026.
• The September rate hike reflected a deterioration in the inflation outlook, with the BOJ seeking to limit the potential spillover of ongoing supply shocks into broader domestic price pressures. Headline inflation remained elevated at 7.9% in August, well above the BOJ’s 4.0%–6.0% target range, while core inflation held at 5.2%. As such, rising inflation expectations and persistent core inflation suggest that second-round effects are beginning to emerge.
• Inflation expectations have also increased, with one-year expectations rising to 7.3% in July from 6.7% in June. Inflation is expected to remain elevated through 2026 and early 2027, as higher global commodity prices, particularly energy prices, continue to feed into domestic costs. Worsening El Niño conditions are also expected to place further pressure on agricultural and food prices, while the effects of Hurricane Melissa continue to weigh on domestic supply.
• The US-Iran conflict remains a key source of uncertainty for Jamaica’s inflation and monetary policy outlook, with oil prices rising above US$100/barrel in September and fuel prices increasing sharply. Diesel prices have risen 53.7%, while transportation inflation accelerated to 14.6% year-over-year (YoY) in August, increasing the risk that higher energy costs become more broadly embedded in domestic prices.
• Overall, the policy rate is projected to end 2026 at 6.50% before easing to 6.00% in 2027, as inflation gradually returns toward the BOJ’s target in the second half of 2027 (H2 2027). However, the trajectory remains highly dependent on the duration of the US-Iran conflict and the resulting impact on global energy prices, with a prolonged conflict presenting upside risks to both inflation and interest rates.

(Sources: BMI, A Fitch Solutions Company & NCBCM Research)

• Jamaica’s trade deficit widened by US$218.9Mn to US$3,103.6Mn for January to June 2026, as higher import expenditure coincided with a decline in export earnings. The export-to-import coverage ratio declined to 20.9%, from 23.5% in the corresponding 2025 period. This implies that the country earned approximately US$0.21 for every US$1.00 spent on imports.
• Total spending on imports for the first six months of 2026 was valued at US$3,921.4Mn, representing a 4.0% increase compared to US$3,770.3Mn recorded in January to June 2025. The increase was mainly driven by higher expenditure on Raw Materials/Intermediate Goods (+4.7%) and Fuels and Lubricants (+6.7%).
• Earnings from total exports were valued at US$817.8Mn, representing a 7.7% decline compared to the US$885.7Mn earned in the corresponding 2025 period. The decline was primarily driven by a 43.0% reduction in the export value of Crude Materials excluding Fuels.
• Jamaica’s top five import trading partners during the period were the United States, China, Colombia, Japan and Trinidad and Tobago. Combined imports from these countries totalled US$2,596.7Mn, representing an 18.3% increase compared to US$2,195.5Mn recorded in the previous corresponding period.
• On the export side, Jamaica’s main markets were the United States, Russian Federation, Netherlands, United Kingdom and Canada. Export revenues from these countries increased by 2.1% to US$595.9Mn.
• Ultimately, the widening trade deficit implied that more foreign currency is leaving the country to finance imports relative to the foreign exchange earned from merchandise exports.

(Sources: STATIN & NCBCM Research)

• On September 28, 2026, S&P affirmed the Commonwealth's long-term foreign and local currency sovereign credit ratings at 'BB-' with a stable outlook and kept its transfer and convertibility assessment at 'BB'. The outlook reflects expectations that the government will remain committed to conservative fiscal policies and manage contingent liabilities from state-owned enterprises (SOEs) without putting its debt trajectory at risk.
• Growth is expected to moderate but remain above potential, supported by cruise tourism and investment across the Family Islands. GDP growth is forecast at 2.5% in 2026, down from 4.2% in 2024 and 3.8% in 2025, with GDP per capita estimated at US$43,000. Tourist arrivals reached 12.5Mn in 2025, up from 11.2Mn in 2024 on the back of strong cruise passenger growth, although S&P noted that the economy remains highly dependent on tourism and that labor constraints weigh on long-term growth.
• Fiscal outcomes have improved, although the rating agency sees surpluses as difficult to achieve without meaningful reform. The reported fiscal deficit was 0.5% of GDP in FY2025 (ended June 30) and 0.9% of GDP in the first three quarters of FY2026, while the government expects to end the fiscal year with a small surplus. Net general government debt is projected at 66% of GDP by end-2026, down from 77.9% in 2020, and interest payments are expected to remain above 15% of revenue for at least the next three years. Refinancing needs remain notable, with 27.4% of government debt maturing within the next year and foreign currency debt accounting for 46.6% of the total.
• External buffers remain adequate, but loss-making SOEs continue to pose risks to public finances. Foreign exchange reserves reached US$3.20Bn as of June 2026, and a renewed fuel hedge with Citibank is expected to offset some of the inflationary pressure, with inflation reaching 4.2% in April 2026. However, S&P cautioned that the government's purchase of the Grand Bahama Power Company Ltd. has increased contingent liabilities and could lead to higher subventions, which already absorb around 14% of total expenditure.
• S&P expects the government to refinance its debt mostly through the domestic banking sector, alongside multilateral and international bank loans, and considers refinancing risks to have abated given the domestic banks' capacity to absorb additional government financing. With US$2.60Bn in external bonds outstanding and the potential for further issuance in international markets, the stable outlook points to limited near-term ratings pressure on Bahamian debt, provided fiscal consolidation stays on track and SOE-related contingent liabilities are contained.

(Source: S&P Global Ratings & NCBCM Research)

• Venezuela's energy sector is moving from regulatory reform toward implementation, as a reworked hydrocarbons framework begins to attract international operators. In January 2026, the country reformed its Organic Hydrocarbons Law, introducing new contractual mechanisms for primary hydrocarbon activities, including Production Participation Contracts (PPCs), under which private companies can assume operational and financial responsibility for projects.
• Eni and GeoPark signed long-term contracts under the new framework in September. Eni agreed a 25-year Hydrocarbon PPC with PDVSA to develop the giant Junín 5 field in the Orinoco Belt as exclusive operator, with responsibility for its technical, financial and commercial management. GeoPark entered the country through a 25-year PPC for the Bare Block, an agreement valued at approximately US$1.20Bn covering more than 15.7 billion barrels of oil originally in place and more than 1,100 existing wells.
• Chevron is also expanding its position in the country. On September 2, 2026, the company announced updated terms for its Venezuelan joint ventures, including additional acreage in the Orinoco Belt and plans to invest more than US$7.00Bn over five years, which it expects to more than double production from its Venezuelan operations to approximately 600,000 barrels per day from 2026 levels.
• The African Energy Chamber (AEC) has also engaged with Venezuelan institutions on investment promotion, technical knowledge transfer and cooperation across the energy value chain.
• Further capital will be needed to unlock the country's resource base. Venezuela holds more than 300 billion barrels of proven oil reserves and more than 195 trillion cubic feet of natural gas. Rehabilitating the sector will require substantial investment in production, infrastructure and refining.

(Source: World Oil)

• Oil prices surged on Thursday, October 1, 2026, after China suspended exports of oil products and reports emerged that the US was preparing to deploy additional military assets to the Middle East. Brent crude settled at US$102.31 per barrel, up 4.37% or US$4.28, while WTI rose 2.71% to US$92.87 per barrel.
• Prices were volatile during the session, falling about 1% in early trading as recovering Gulf crude exports and higher US inventories eased supply concerns. However, the market reversed course following reports that Chinese refiners had suspended oil-product exports beyond Hong Kong and Macau until further notice.
• The move by China added pressure to already tight global fuel markets. Diesel and other refined products remain in short supply following damage to refinery infrastructure in the Gulf and Russia, while Russia has also banned diesel exports through October. China’s restrictions are therefore expected to further constrain global fuel availability.
• Oil prices were also supported by renewed geopolitical concerns after reports that the US was preparing to send a third aircraft carrier and up to 10,000 additional troops to the Middle East. U.S. President Donald Trump said he was still weighing his options regarding Iran, while diplomatic efforts to end the conflict remained subdued.
• At the same time, crude exports from the Gulf have continued to recover. Goldman Sachs estimated that Gulf oil exports reached 23.3Mn barrels per day over the past week, broadly in line with the 2025 average. Saudi Arabia also resumed tanker loadings from Yanbu after restarting its East-West Pipeline.
• Lingering disruptions to oil and refined-product markets have led analysts to raise their average 2026 Brent crude forecast to US$89.05 per barrel, although improving Middle East exports are providing some offset to supply concerns.
• While Gulf crude exports are gradually returning towards normal levels, refined-product markets remain considerably tighter. China’s suspension of fuel exports adds another source of pressure to already constrained diesel and fuel supplies, which could keep energy prices elevated even as crude availability improves.

(Source: Reuters)

• Government borrowing costs across major economies climbed to multi-decade highs on October 1, 2026, as concerns over persistent inflation, further interest-rate increases and rising government debt intensified. The 10-year US Treasury yield reached 5.34%, its highest since 2002.
• The US 10-year yield rose almost 90 basis points during Q3, its largest quarterly increase so far this century. The sell-off has also spread globally, with French 10-year yields reaching their highest since 2002, UK 30-year borrowing costs touching 6% for the first time since 1998, and Japanese yields reaching multi-decade highs.
• Renewed increases in oil prices amid US-Iran tensions have added to inflation concerns and expectations of further monetary tightening. At the same time, investors remain focused on growing government borrowing requirements, with US debt exceeding US$40Tn and debt-to-GDP ratios at or above 100% across most G7^[1]
• Higher government bond yields can feed directly into borrowing costs across the economy, including mortgages, car loans and corporate debt. At the same time, a surge in debt issuance to finance artificial-intelligence (AI) investment is adding to bond supply and placing further upward pressure on yields.
• The bond sell-off reflects more than expectations for central-bank tightening, with persistent inflation, elevated sovereign borrowing and growing corporate debt issuance all contributing to higher yields.

(Source: Reuters)

^[1] The G7 economies comprise Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.

• Although the lingering effects of Hurricane Melissa and adverse weather conditions continued to weigh on economic activity, the contraction in the Jamaican economy moderated in the second quarter of 2026 (Q2 2026). According to the Statistical Institute of Jamaica (STATIN), real gross domestic product (GDP) contracted by 2.9% year-over-year (YoY), following declines of 7.1% in Q4 2025 and 4.1% in Q1 2026. Both the Goods Producing Industries (6.3%) and Services Industries (-1.8%) declined.
• Within the Goods Producing Industries, Agriculture, Forestry & Fishing (-15.3%) and Mining & Quarrying (-26.1%) recorded significant declines. Agricultural output was affected by dry conditions across most parishes and the lingering impact of Hurricane Melissa, with banana and plantain production falling by 72.0% and 77.5%, respectively. Mining & Quarrying continued to be constrained by lower bauxite and alumina production, which declined by 16.1% and 30.8%, respectively.
• In contrast, Manufacturing (+0.1%) and Construction (+0.4%) recorded marginal growth, supported by higher cement production and increased activity in civil engineering and building construction.
• Within the Services Industries, Accommodation & Food Service Activities (-12.3%) recorded the largest contraction, reflecting a 21.0% decline in foreign national arrivals and the continued closure of some hotels. Transport & Storage (6.1%) also declined amid lower tourism-related travel and a 15.1% fall in total airport passenger traffic. Electricity, Water Supply & Waste Management (-4.2%), Real Estate & Business Activities (-3.7%), and Information & Communication (-1.5%) also contracted. These declines were partially offset by growth in Financial & Insurance Activities (+3.0%), Wholesale & Retail Trade (+0.6%), and Public Administration & Defence (+0.3%).
• The Q2 contraction, nevertheless, represents an improvement from the 4.1% decline recorded in Q1, as the pace of contraction moderated across several hurricane-affected industries. Accommodation & Food Service Activities, for example, improved from a 16.6% contraction in Q1, while Manufacturing and Construction recorded growth. However, the continued weakness in tourism, agriculture and mining indicates that key foreign-exchange-earning and productive sectors remain under pressure.
• 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. However, the recovery remains subject to downside risks, including elevated global energy prices and higher production and transportation costs associated with geopolitical tensions in the Middle East.

(Sources: STATIN, PIOJ, & NCBCM Research)

• Data released by the Statistical Institute of Jamaica (STATIN) shows the unemployment rate remained relatively unchanged at 3.4% in July 2026, compared with 3.3% in July 2025 and down from the 3.7% recorded in April 2026. However, this came amid declines in both employment and labour force participation.
• Jamaica’s labour force declined by 21,800 to 1,468,500 persons, with the labour force participation rate falling to 68.1% from 69.1% a year earlier and 68.4% in April. The decline was driven by reductions in both the male and female labour forces, with more persons moving outside the labour force.
• This was accompanied by a decline in employment, which fell by 1.5% to 1,419,200 persons. Male employment declined by 8,600 (-1.1%) to 767,000, while female employment fell by 13,300 (-2.0%) to 652,200. Youth employment recorded a sharper 6.4% decline, highlighting continued weakness among younger workers.
• Consequently, the number of persons outside the labour force increased by 3.3% to 687,300, largely reflecting an additional 14,800 youth exiting the labour force. The increase was recorded among both males and females.
• Additionally, the July 2026 survey showed a shift toward informal employment. Formal employment declined by 3.7% to 621,800 persons, while informal employment increased by 0.3% to 797,400. As a result, the informal employment rate rose to 56.2% from 55.2% in July 2025.
• Jamaica’s labour market results continue to reflect lingering weakness following Hurricane Melissa, although the relatively stable unemployment rate masks declines in employment and labour force participation. The latest results suggest that while fewer people are unemployed, a larger number have exited the labour force, particularly among youth, indicating that labour market recovery remains uneven.

(Sources: STATIN & NCBCM Research)

• The Panama Canal is expanding transit capacity as water conditions at Gatun Lake improve. The Panama Canal Authority (ACP) announced on September 28, 2026, that it will increase daily transit slots to 33 from 32 and raise the maximum authorised draft for vessels using the Neopanamax locks to 14.94 meters (49 feet) from 48 feet, following the recovery of Gatun Lake levels. The draft increase takes effect immediately, while a tenth daily Neopanamax slot will become available from October 15, 2026, according to Navigation Notice No. A-36-2026.
• The easing of restrictions reflects better water availability across the canal's watershed. The ACP attributed the improved operating conditions to rainfall recorded in the watershed during September, the implementation of water-saving measures at the locks and projections on the behaviour of Gatun Lake levels.
• The revised allocation keeps a mix of reserved and auctioned slots across all three vessel segments. The 33 daily slots will be distributed across 10 Neopanamax slots (nine through prior reservation periods and one via daily auction), 18 Panamax Super slots (17 through reservation periods and one via daily auction) and five Panamax Regular slots (four through reservation periods and one via daily auction).
• Alongside the capacity increase, the ACP has given customers greater flexibility in booking transits. The Canal administration eliminated the limit on the number of slots a customer can claim per date or week and now allows reservations on consecutive dates. Quotas not consumed by one segment will be offered to other segments under a defined substitution hierarchy, while slots won at auction will not count toward segment limits.

(Source: Newsroom Panama)

• Tourism continued to underpin economic activity in The Bahamas during the summer months. Tourist arrivals to The Bahamas rose 16.8% to 1.2 million in July 2026, led by a sharp increase in cruise passengers, according to the Central Bank of The Bahamas’ Monthly Economic and Financial Developments report for August. Sea arrivals increased 18.2% to approximately 1.0 million, while air arrivals grew 10.0% to approximately 200,000. For the first seven months of 2026, total arrivals rose 14.8% to 8.5 million, with sea and air visitors up 16.4% and 5.8%, respectively.
• Preliminary August indicators suggest that this momentum carried into the following month. International departures through Nassau rose 7.7% to 161,919, while short-term vacation rental operators sold 42,979 room nights, up 14.8% year-on-year. Average daily rates increased 5.8% to B$633.78 for entire-place listings and 5.1% to B$157.97 for hotel-comparable listings.
• However, stronger tourism activity was accompanied by higher foreign currency demand, which weighed on external reserves. Foreign currency sales for current account transactions rose by B$200.0Mn year-on-year to B$832.5Mn in August, driven mainly by credit and debit card payments (up B$93.6Mn) and non-oil imports (up B$59.1Mn). External reserves declined by B$122.9Mn during the month to B$3.10Bn, compared with a B$77.8Mn decline in August 2025, although the Central Bank expects reserves to remain well above international standards and adequate to support the currency peg to the US dollar.
• Domestic banking conditions softened in August, as liquidity declined and credit quality weakened. Bahamian dollar deposits fell by B$225.4Mn, largely due to private sector drawdowns of demand deposits, while excess reserves declined by B$227.1Mn to B$1.76Bn. Private sector credit rose by B$7.5Mn, as gains in consumer (B$20.1Mn) and mortgage (B$3.8Mn) lending offset a B$16.5Mn contraction in commercial loans. Consumer loan arrears increased 9.9% to B$141.6Mn, and total private sector arrears rose by B$5.3Mn to B$450.6Mn, or 7.0% of outstanding claims.
• Looking ahead, the Central Bank remains positive on the growth outlook, although risks persist. It expects the economy to maintain its growth trajectory through 2026, supported by tourism and foreign investment projects, but cautioned that higher fuel and import prices could add to inflationary pressures, while geopolitical tensions and uncertainty over global tariff policies remain risks to travel demand.

(Source: Eyewitness News)