• The latest data from the Ministry of Finance and the Public Service (MOFPS) suggest that Jamaica's fiscal position has come under renewed pressure in the first two months of the Fiscal Year ended March 31, 2027 (FY2026/27), as the lingering economic effects of Hurricane Melissa continue to weigh on government revenues. Central Government recorded a fiscal deficit of J$19.72Bn for the April–May period, significantly wider than the budgeted deficit of J$11.46Bn. The outturn highlights the fiscal challenges associated with rebuilding the economy while supporting recovery efforts.
• The weaker fiscal outturn was driven primarily by a shortfall in revenue collections, with total revenues and grants reaching J$172.11Bn, approximately J$20.37Bn (10.6%) below budget. Tax revenues (-11.8% below budget), particularly Pay As You Earn (PAYE; -12.5%) and other corporate taxes (-30.9%), underperformed expectations as many businesses, especially within the tourism and agricultural sectors - hardest hit by Hurricane Melissa - continue to recover from operational disruptions. That said, the decline was partially cushioned by stronger-than-expected non-tax revenues (+20.3%), likely reflecting disaster-related inflows and other government receipts.
• While revenues softened, government spending remained relatively restrained, totalling J$191.83Bn, or J$12.11Bn below budget. Lower expenditure on programmes (-7.4% below budget), capital projects (-15.1%), and interest payments (-15.7%) suggests that reconstruction spending is being rolled out in phases rather than all at once. This measured pace of expenditure likely reflects the authorities' effort to balance urgent recovery needs with preserving fiscal sustainability, even after temporarily suspending the Fiscal Responsibility Framework to facilitate disaster response.
• Despite the near-term deterioration, Jamaica's fiscal fundamentals remain considerably stronger than in previous post-disaster periods. Prior to Hurricane Melissa, the country had reduced public debt to near its legislated target (60% by FY2027/2028), maintained low inflation, and built substantial fiscal buffers through years of disciplined policymaking. These reforms - including disaster risk financing mechanisms and enhanced public financial management - have provided the government with greater flexibility to respond to one of the most destructive hurricanes in the island's history without materially undermining investor confidence.
• Looking ahead, the pace of reconstruction will likely determine the trajectory of Jamaica’s fiscal recovery. As tourism infrastructure, agricultural production, and public utilities continue to be restored, economic activity is anticipated to gradually strengthen, supporting improved tax collections over the medium term. Combined with catastrophe insurance payouts, multilateral financing, and targeted government investment, these developments are expected to ease fiscal pressures and reinforce Jamaica's long-standing reputation for prudent macroeconomic management.

(Sources: MOFPS & NCBCM Research)

• Recent earnings releases on the Jamaica Stock Exchange (JSE) revealed diverging earnings trajectories. Caribbean Cream Limited (KREMI) returned to profitability on stronger sales and operational efficiencies, One on One Educational Services Limited (ONE) delivered improved year-to-date margins; however, AMG Packaging & Paper Company Limited (AMG) faced production-related headwinds that weighed heavily on earnings.
• KREMI’s net profits rebounded in its first quarter ended May 31, 2026. It reported net profits (NP) of J$44.65Mn relative to a net loss of J$13.65Mn in the corresponding prior year period. Revenues increased 10.2% year-over-year (YoY) to J$884.31Mn, supported by improved product availability across its distribution network following last year's disruptions. Consequently, gross profit (GP) climbed 31.3% to J$303.39Mn, with the GP margin expanding to 34.3% from 28.8%, benefiting from both higher sales volumes and lower maintenance costs as improved equipment reliability enhanced operational efficiency.
• Earnings were also bolstered by relatively stable operating expenses, with KREMI's administrative and selling expenses largely flat at J$220.04Mn (0.06%). Consequently, operating profit (OP) surged more than sixfold to J$84.64Mn from J$11.61Mn in Q1 2025, resulting in the OP margin improving to 9.6% from 1.5%. Management also highlighted stronger liquidity, with cash balances rising 75% since year-end, aided by a temporary loan repayment moratorium granted following Hurricane Melissa.
• In contrast, ONE reported a softer Q3, with NP declining 37.4% YoY to J$22.97Mn as revenues fell 4.8% to J$95.75Mn. A provisional inventory write-down increased direct costs by 33.7%, compressing the GP margin to 71.9% from 79.9%. Consequently, OP declined 28.3% to J$29.18Mn, with the OP margin narrowing to 30.5% from 40.5%. NP margin also fell to 23.9% from 36.5%.
• Despite the quarterly setback, the company's nine-month performance remained resilient. Net profit increased 16.4% to J$64.13Mn despite revenues slipping 3.6%, reflecting disciplined cost management with direct costs declining 21.5%. Furthermore, for Q3, management continued investing in proprietary adaptive assessment technology, artificial intelligence, platform consolidation and product development while refining its subscription model for One Academy ahead of the new academic year.
• For its part, AMG experienced a challenging Q3 as production disruptions associated with corrugator¹ commissioning issues and the lingering effects of Hurricane Melissa constrained output. Q3 revenues declined 11.0% YoY to J$233.88Mn, while GP fell 25.1% to J$72.10Mn with GP margin contracting to 30.8% from 36.6%. Although total manufacturing costs declined 2.9% during the quarter, the reduction was insufficient to offset weaker sales volumes. Higher operating expenses (+11.5%) further eroded profitability, resulting in NP declining 57.5%. Consequently, the NP margin declined to 9.1% from 18.9%.
• Over the nine months, AMG’s performance was also depressed as production constraints limited revenue generation. Net profit has declined 67.6% YoY to J$36.23Mn and net profit margin contracted to 5.6% from 14.6%. That said, the company remains focused on factory expansion and relocation initiatives, which are expected to alleviate current production constraints, improve capacity utilisation and support a recovery in earnings performance.
• At market close on July 16^th, KREMI, ONE and AMG have delivered mixed share price performances year-to-date, closing at J$1.66 (-20.8%), J$0.71 (-17.5%) and J$1.81 (-18.1%), respectively. At their current market prices, ONE and AMG trade at P/E multiples of 14.2x and 30.2x, compared with their respective sector averages of 25.3x (Junior Market Other) and 17.3x (Junior Market Manufacturing). Meanwhile, KREMI trades at a price-to-book (P/B) multiple of 0.76x, below the Junior Market Manufacturing sector average of 1.20x.

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¹A corrugator machine is a large industrial machine used to make corrugated cardboard–the layered material commonly used for shipping boxes and packaging.

(Sources: JSE & NCBCM Research)

• The Republic of Trinidad and Tobago’s (T&T, the Republic) net official foreign reserves totalled US$5.04Bn at the end of June, the lowest level for the 2026 calendar year, according to the Central Bank’s data centre. T&T held 5.8 months of import cover at the end of June. However, this is still above the international standard of 3 months of import cover.
• The data suggest that net official foreign reserves began 2026 at US$5.36Bn (6.3 months of imports), meaning there has been a 6.07% decline in the stock of reserves for the year to the end of June. Foreign reserves peaked at US$5.71Bn at the end of January. That was the month in which the Republic raised US$1Bn in a ten-year bond priced at a coupon of 6.20%.
• On January 25, the Ministry of Finance said proceeds from its bond issue would fund the tender offer for the 4.50% US dollar notes due 2026 and support the budget. After raising another US$800Mn at 6.20% on July 9, it said the proceeds would repay the 2026 notes and fund general budgetary purposes.
• At the end of April, Trinidad and Tobago's adjusted general government debt stood at TT$148.23Bn, or 84.7% of GDP. The Central Bank's measure excludes Open Market Operations (OMO) debt used for liquidity management. Central government external debt totalled TT$39.11Bn (about US$5.76Bn).
• Last Friday, Central Bank Governor Larry Howai, Minister of Finance Davendranath Tancoo, Minister of Planning, Economic Affairs and Development, Kennedy Swaratsingh; and Minister of Energy and Energy Industries Dr Roodal Moonilal, met with key stakeholders in the energy sector to discuss the country’s foreign exchange challenges. Following the meeting, the Central Bank issued a news release stating, “Energy sector conversions remain the primary source of foreign exchange inflows, accounting for approximately 60-75% of total market conversions.
• However, over the past decade, foreign exchange sales by energy companies have declined by an estimated US$1.2Bn annually, significantly reducing the supply available to the domestic economy. At the same time, demand for foreign exchange continues to outpace supply.”

(Sources: Trinidad & Tobago Guardian)

• Since 2020, Guyana’s national unemployment rate has been cut in half, dropping from 12.8% down to 6.8% by 2024
• Over this same period, youth unemployment saw an even sharper decline, falling from 30.2% to 12.1%. This rapid progress was driven by the government's creation of over 104,000 new jobs during its first five years in office. However, because the economy is expanding so quickly, jobs are now being created faster than the local workforce can acquire the skills to fill them.
• Pointing to this labour shortage, Finance Minister Dr. Ashni Singh urged young people to take immediate action by starting training programs, applying for jobs, and embracing entrepreneurship.
• To support this push, the government recommitted to securing youth prosperity through three essential pillars: education and skills training, direct employment, and business opportunities.

(Source: Guyana Times)

• Iran has asked Yemen’s Houthi movement to stand ready to close the Red Sea oil route if the United States strikes Iranian power infrastructure, three sources told Reuters on Thursday, posing a potent new threat ​to global energy supplies.
• The idea has been discussed within the Islamic Republic's leadership, and the message has been conveyed to Iran's Houthi allies, two senior Iranian ‌sources and a regional source familiar with the matter said.
• The sources said the Houthis had been informed recently of Tehran's request, which has not been previously reported. They did not give further details on how it had been conveyed or whether it was after U.S. President Donald Trump’s threat to attack Iranian power infrastructure on Tuesday.
• Iran’s foreign ministry and a spokesperson for the Houthi group were not immediately available to respond to ​Reuters' request. A source close to the Houthis said the group had completed preparations to attack shipping by deploying missiles and drones ​near Bab el-Mandeb strait, the gateway to the Red Sea, in Yemen's highlands overlooking Hodeidah and the Gulf of Aden and was awaiting the ⁠order to begin.
• Any threat to the Red Sea and its Bab el-Mandeb gateway risks hugely exacerbating the global energy crisis triggered by Iran's closure of the Strait of Hormuz and underscores the explosive ​risks stemming from a new round of warfare. With the Hormuz Strait already shut, any Houthi attacks on vessels or ports in the Red Sea would leave the Middle East's two main oil export ​routes disrupted simultaneously, opening a new front in both the energy crisis and Iran's wider conflict with the United States.

Source: Reuters

• Britain must maintain its budget discipline, tackle high pension spending and ‌address soaring energy prices to speed up its economy, the OECD said on Wednesday, underscoring the challenges for Andy Burnham, who is set to become prime minister next week.
• The Organisation for Economic Cooperation and Development said the UK economy had stabilised after ​a string of shocks including Brexit. "But activity remains subdued, and the evolving conflict in the Middle East ​is testing its resilience," the Paris-based organisation said in a report. High and volatile energy ⁠prices, rising fiscal pressures, weak productivity growth and large regional disparities continue to weigh on economic performance and ​living standards.
• Former Manchester mayor Burnham, who is on course to replace Keir Starmer as prime minister, has vowed ​to stick to the government's fiscal rules. But some investors are concerned that he might increase public spending under pressure from within his centre-left Labour Party.
• The OECD expects ​Britain's economy to grow by 0.9% this year and 1.1% in 2027. The forecasts were slightly weaker than those published last ‌week ⁠by the International Monetary Fund for 1% growth this year and 1.3% next year.
• Finance minister Rachel Reeves, responding to the OECD report, said Britain was on course for the fastest growth amongst Europe's big, rich economies, with AI and better ties with the European Union helping the economy. The OECD said Britain should invest more in the ​electrification of its economy to ​reduce its reliance on ⁠gas imports, which surged in price this year due to the Iran war.
• "Risks remain tilted to the downside, particularly if a prolonged Middle East conflict further increases ​energy prices or global trade fragmentation intensifies," the OECD said. The organisation also said public spending ​increases should ⁠be targeted towards productivity-enhancing investment and tax efficiency reforms were needed to rebuild the government's fiscal room for manoeuvre and support long-term economic growth.

Source: Reuters

• The latest data from the Statistical Institute of Jamaica (STATIN) showed annual point-to-point (P2P) inflation accelerated to 6.7% in June, exceeding the Bank of Jamaica's (BOJ’s) 4.0%-6.0% target range for the first time this year. It reinforced the central bank's warning that inflation would temporarily breach its ceiling amid rising transportation and food costs in the wake of a US-Iran war-driven surge in energy costs.
• P2P contributions for the divisions: ‘Food and Non-Alcoholic Beverages’ (9.8%), ‘Transport’ (7.3%) and ‘Housing, Water, Electricity, Gas and Other Fuels’ (3.5%) were the primary drivers of the rise in consumer prices for June.
• Consumer prices rose by 0.8% in June, following a 0.5% increase in May. June's monthly increase was driven primarily by a 4.3% rise in the 'Transport' division, reflecting the implementation of higher Public Passenger Vehicle (PPV) fares for route taxis and hackney carriages. The fare adjustment, which rolled out in two equal 8% fare increases in June and July, had already been identified by BOJ as a key upside risk to inflation. It is expected to continue filtering through transportation costs over the coming months, in addition to the resurgence in energy prices that has begun since the start of renewed hostilities in the Middle East in July.
• Food prices also continued to trend upward, with the 'Food and Non-Alcoholic Beverages' division rising 0.7%. Higher prices for agricultural produce, including carrots, cabbages, onions and sweet peppers, resulting in a 2.9% increase in the index for 'Vegetables, tubers, plantains, cooking bananas and pulses', put upward pressure on the index.
• The 'Housing, Water, Electricity, Gas and Other Fuels' division, which increased 0.5% due to higher household rental rates and electricity charges, also added to the inflationary impulses.
• With headline inflation breaching the target range, the BOJ is likely to opt to maintain the policy rate at 5.50% at its August 19^th meeting, especially since expectations are for the breach to be temporary. The BOJ has consistently signalled that inflation is likely to remain above target in the near term as higher international commodity prices continue to feed through to the domestic economy.
• Against this backdrop, the re-escalation of tensions in the Middle East and threats to shipping through the Strait of Hormuz further reinforce upside risks to inflation, particularly through fuel, electricity and transportation costs, suggesting the central bank is likely to retain a cautious, data-dependent stance.

(Sources: STATIN, BOJ, & NCBCM Research)

• Benefiting from stronger project execution, improved sales conversion and the remobilisation of previously delayed projects, Innovative Energy Group Limited (ENERGY)¹ returned to quarterly profitability. Net profit totalled J$30.79Mn for the fourth quarter ended May 31, 2026 (Q4 FY2026), compared with a net loss of J$40.90Mn for Q4 FY2025.
• Increased project activity and higher revenue recognition meant Q4 revenues surged 315.3% year-over-year (YoY) to J$122.55Mn. This featured the conversion of secured opportunities into active projects and renewed execution momentum following delays caused by Hurricane Melissa.
• Q4 Gross profit reached J$60.81Mn in Q4 compared with a gross loss of J$7.55Mn in the previous corresponding period. While cost of sales rose to J$61.75Mn (+66.6%), likely due to the timing of material purchases, gross profit margin stood at 49.6%. Meanwhile, operating profit increased to J$47.45Mn, rebounding from an operating loss of J$36.73Mn in the comparative quarter. The group benefited from operational improvements, which trimmed operating expenses by 10.8%.
• ENERGY also benefited from J$15.62Mn in other income, including approximately J$13.00Mn in fair value gains on investment property. However, this was countered by finance costs of J$11.17Mn and taxation of J$5.48Mn.
• Still, annual net profit declined 58.2% YoY to J$34.38Mn from J$82.19Mn in FY2025. A 6.0% revenue growth to $340.47Mn faced a 58.8% increase in COGS and a 9.4% increase in OPEX, reflective of lower profitability during Q2 and Q3. Consequently, the full-year net profit margin contracted to 10.1% from 25.6%.
• Looking ahead, management has improved revenue visibility. This is supported by approximately J$900Mn in newly secured contracts and the remobilisation of previously delayed projects valued at approximately J$1.4Bn. These projects are targeted for execution in FY2026/2027 and are expected to support revenue growth and improved profitability.
• ENERGY’s shares were held firm year-to-date, ending at J$0.99 on Wednesday, July 15, 2026. However, it has traded as low as J$0.85 in April and June before closing at J$0.93 on July 14th, the day before the company's earnings release. At its current market price, the company trades at a P/E ratio of 38.1x, compared with the Main Market Energy, Industrials and Materials Sector average of 18.5x.

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¹Following its transition from Ciboney Group Limited to Innovative Energy Group Limited and its relisting on the Jamaica Stock Exchange (JSE) in March 2024, the Group continues to position itself as a sustainable energy-focused company.

(Sources: JSE & NCBCM Research)

• Spain has named nine Caribbean Community (CARICOM) countries among 60 nations worldwide whose citizens will be allowed to enter the European country without a visa for short stays.
• According to a statement from Spain’s Ministry of Foreign Affairs, the CARICOM countries included on the list are Antigua and Barbuda, Barbados, The Bahamas, Dominica, Grenada, St Kitts and Nevis, Saint Lucia, Trinidad and Tobago, and St Vincent and the Grenadines.
• The announcement does not include several other CARICOM member states, including Jamaica, Guyana, Suriname, Belize and Haiti, whose citizens will continue to require visas before travelling to Spain.
• The visa exemption allows holders of ordinary passports from the approved countries to visit Spain and other countries within the Schengen Area¹ for tourism, business travel and other short-term purposes. Travellers will be permitted to stay for up to 90 days within any 180 days without first obtaining a Schengen visa.
• In addition to the Caribbean countries, Spain is extending visa-free access to citizens of eight African nations: Botswana, Namibia, Eswatini, Lesotho, Mauritius, Seychelles, Cape Verde and Rwanda.
• The move forms part of Spain’s broader visa policy for countries considered to meet the requirements for short-stay visa exemptions. Citizens of most other Caribbean and African countries will still be required to apply for a Schengen visa before travelling to Spain or other countries within the Schengen zone.

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¹The Schengen Area is a border-free travel zone encompassing 29 European countries. It eliminates routine internal passport controls, allowing over 450 million people to move freely as if they were a single country.

(Source: Caribbean National Weekly)

• Federal Reserve policymakers preparing for their next policy meeting in two weeks got a fresh snapshot on Wednesday of a broadly improving economy. Employment is on the rise but not straining wage bills, and inflation is easing slightly but still delivering an unwelcome sting.
• "Compared with the last reporting period, price growth was the same or slower in all districts," it said. "Expectations for price growth over the coming months varied across districts, with contacts in some expecting inflation to continue at its current pace, while contacts in others expected inflation to slow, in part due to falling fuel prices."
• Elevated inflation pushed about half of the policymakers at the Fed's June 16-17 meeting to project at least one rate hike by the end of 2026. Kevin Warsh has been silent about his own rate-path view, even as he repeatedly promised to restore price stability and said the central bank has the tools to do so — a commitment he reiterated in back-to-back appearances before lawmakers in Congress on Tuesday and Wednesday.
• A drop in fuel prices last month due to a preliminary peace agreement between the U.S. and Iran helped cool inflation, data this week showed, but renewed hostilities this month have pushed oil prices back up and reignited inflation concerns.
• The labour market is not contributing to inflation, the report suggested — a point that Fed policymakers have also made. But non-labour input costs continue to rise, the report found, across "a variety of industries — including services, construction, and manufacturing — and reflected, in part, higher costs for energy, transportation, and raw materials."

(Sources: Reuters)