• The European Central Bank raised interest rates by 25 basis points to 3.25% as expected on Thursday and signalled that more tightening would be needed to tame inflation. This announcement came a day after the U.S. Federal Reserve also raised its benchmark rate by a quarter of a percentage point – in its case to a 5.00-5.25% range – but hinted that could be the last in a historic series of hikes.
• "We are not pausing - that is very clear," ECB President Christine Lagarde told a press conference. "We know that we have more ground to cover." Lagarde said there were still big upside risks to inflation, notably from recent wage deals and high corporate profit margins, and that financial conditions were still not sufficiently tight. She noted that the bank's written statement made reference to future "policy decisions" in the plural, possibly suggesting more than one further hike.
• The ECB observed a slowdown in the eurozone after three consecutive 50 basis point increases, this data comes only days after eurozone banking data showed the biggest drop in loan demand in over a decade. That suggests previous rate rises are working their way through the economy and that ECB policies are now restricting growth.
• "Rate decisions will continue to be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission," the ECB said in a statement issued before the press conference.

(Source: Reuters)

• The Government intends to introduce new energy sources that will make power generation in Jamaica more reliable, available, and affordable. Speaking at the opening ceremony of Expo Jamaica 2023, at the National Indoor Sports Centre in Kingston on April 27, Prime Minister, the Most Hon. Andrew Holness, said the Government has embarked on a path to ensure that 50% of Jamaica’s energy is generated from renewable sources.
• “We are currently doing a new integrated resource plan to make sure that when we do introduce more green energy, up to 50%, that the entire grid is stable, and that the capacity has been increased,” Mr. Holness said.
• “So, we are looking at pumped hydro storage…looking at the Mahogany Vale project, which I announced as an important element in our energy mix. I have also met with the International Atomic Agency. Jamaica has to explore new technology in nuclear energy, small nuclear plants to generate energy in Jamaica, which will be cheaper, more stable and more affordable,” he added.
• As it relates to the Vale Project, in March 2023, funds were allocated in the budget to develop the dam as a national priority. The project will form part of a major integrated water and energy project utilising the well-established Pumped Hydro Storage and Hydro Electricity concepts, which the Prime Minister announced last year, to solve Jamaica’s water and energy problems and to make the island a truly green country.
• He also maintained that the Government is serious about insulating the economy from energy shocks and high energy prices. However, these initiatives will not all materialise in two years, and may take up to a decade to be completed.

(Source: JIS)

• Fitch Solutions maintains its forecast that real GDP in Barbados will grow by 4.9% in 2023, down from an estimated 10.0% in 2022.
• The company’s core view remains that exports will be the primary driver of headline growth, contributing 4.3 percentage points (pp) to GDP in 2023, down from 8.5pp in 2022 as it expects activity to moderate as global demand for foreign travel softens.
• Nonetheless, the ongoing post-pandemic recovery in tourism will sustain growth above historical averages over the coming quarters, though momentum will fade amid headwinds from weaker global growth and elevated inflation.
• Preliminary data show GDP growth reached 6.4% y-o-y in Q123, a deceleration from 9.5% in Q422, and Fitch expects growth momentum will continue to wane over the coming quarters for reasons previously mentioned.
• Nonetheless, Fitch still expects growth will remain comfortably above the pre-pandemic average of 0.7% over 2015-2019, driven primarily by the ongoing recovery in tourism, which comprised around 30% of the total economy in 2019.
• The risks to the short-term outlook are toward the downside given Barbados' sensitivity to external price shocks, particularly if there is disruption to international travel and tourism. 

(Source: Fitch Solutions)

• A technical mission from the International Monetary Fund (IMF) agreed to disburse US$527Mn to Costa Rica after completing the fourth review of the authorities' reform programme, it said on Friday, April 28.
• The agreement is subject to approval by the IMF Executive Board, contingent on the implementation of a prior action by the authorities linked to implementing the public employment law.
• The implementation of the public employment bill seeks to create a single framework for employment in the public sector, with eight salary scales. This initiative will make the current fragmented public salary system more equitable and efficient by ensuring fiscal sustainability, improving the equity and efficiency of the public administration, and strengthening social safety nets and tax compliance.
• The decision comes as Costa Rican authorities continued to move forward with their comprehensive economic reform programme, IMF said in a statement, adding the reforms aim to make the tax system more efficient and fairer, will strengthen social protections, and reduce labour market informality.
• Additionally, the IMF also said that Costa Rican authorities were moving forward with an "ambitious agenda to green the economy". In other words, the Costa Rican authorities aim to transition to an urban green economy by decarbonising its Greater Metropolitan Area through sustainable integrated urban planning.
• The country’s performance under the previous programme has been strong, and all quantitative targets have been met. There was broad agreement that the overall policy stance should remain focused on bringing inflation back to target (3% ± 1%) and keeping public debt on a firm downward path. This would help protect the poor (who are worst affected by high inflation) and could be achieved while still expanding targeted support for the most vulnerable.
• The financial institution also said it sees Costa Rica's Gross Domestic Product (GDP) growth moderating to 3.0% in 2023, after growing 4.3% last year. Headline inflation has also been on a steady downward path and is projected to be within the Central Bank of Costa Rica (BCCR)’s tolerance range around the target later this year. 

(Sources: IMF & Yahoo Finance)

• The Federal Reserve on Wednesday raised interest rates by a quarter of a percentage point and signalled it may pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political standoff over the U.S. debt ceiling, and monitor the course of inflation.
• The move marks a new stage of the U.S. central bank's management of the recovery from the COVID-19 pandemic, with what may be its final rate hike of the current tightening cycle and heightened attention to risks facing the economy.
• The unanimous decision lifted the Fed's benchmark overnight interest rate to the 5.00%-5.25% range, the tenth consecutive increase since March 2022.
• In an overt shift, the central bank no longer says it "anticipates" further rates will be needed, only that it will watch incoming data to determine if more hikes "may be appropriate."

(Source: Reuters)

• JPMorgan Chase & Co said on Monday it will buy most of First Republic Bank's assets after regulators seized the troubled lender over the weekend, marking the third failure of a major U.S. bank in two months. Under the deal, which came after an auction, JPMorgan will pay $10.6 billion to the U.S. Federal Deposit Insurance Corp (FDIC) for most of the assets of the San Francisco-based bank, whose failure is the largest since Washington Mutual in 2008.
• JPMorgan, already the biggest bank in the United States, has also entered into a loss-share agreement with the FDIC on single-family, residential, and commercial loans it bought, but will not take First Republic Bank's corporate debt or preferred stock. The deal allows for an orderly failure of First Republic and avoids regulators having to insure all the bank's deposits, as they had to do when two others collapsed in March.
• JPMorgan has been on a buying spree since 2021, acquiring more than 30 companies in deals totalling more than $5 billion. U.S. regulators have been slow to approve large bank deals in recent years, while the Biden administration has also cracked down on anti-competitive practices.
• First Republic disclosed last week that it had suffered more than $100 billion in outflows in the first quarter and was exploring options, increasing stress in the banking sector. Global banking has been rocked by the closure of Silicon Valley Bank and Signature Bank in March, while Switzerland’s Credit Suisse had to be rescued by rival UBS. First Republic shares tumbled 43.3% in premarket trading on Monday before they were halted. The bank’s stock has lost 97% of its value this year. JPMorgan shares rose 2.7%.

(Source: Reuters)

• One on One Educational Services Limited has recorded a net profit of $10.68Mn for the second quarter of the financial year ending February 28, 2023. This represents a 72.8% yoy increase. For the six months ending February 28, 2023, profit totaled $17.41Mn, up 96.2%.
• Revenue for the quarter was up by 17.5% yoy to $72.59Mn, which supported a 47.3% increase for the six months to $153.45Mn. This was mainly driven by increases in the business-to-customers (B2C) and business-to-business (B2B) revenue lines. The increase in revenues was also driven by new contracts acquired and ongoing contracts from the previous financial year.
• Additionally, the company benefited from economies of scale in executing projects, resulting in a $4.48Mn (27.4%) decline in direct costs for the quarter, 6.7% decline to $26.76Mn for the six months.
• The company’s bottom-line was; however, tempered by a $21.73Mn (63.0%) increase in operating expenses to $56.21Mn when compared to the same period in 2022. Operating expenses for the six-month period amounted to $110.09Mn, representing an increase of $43.62Mn or 65.6%. This was due to various factors, including staff cost for developing and expanding new products initiatives, promotional activities to increase awareness of the company’s products, software license fees to support its remote office operations and registration fees associated with the listing of the company.
• One’s stock price has decreased by 5.67% since the start of the calendar year. The stock closed Thursday’s trading session at $1.16 and currently trades at a P/E of 96.7x which is significantly above the Junior Market Others Sector Average of 22.3x. As the company moves forward with its growth strategy and takes advantage of the reopening of the economy, we expect to see an improvement in its earnings per share, which should help improve its P/E ratio.
• As the company moves into Q3, there is optimism surrounding its growth in all of its divisions. The launch of the OneAcademy and the continued expansion of the government and business divisions are expected to be key drivers of growth over the next quarter.

(Sources: JSE & NCBCM Research)

• For March 2023, output prices for producers in the Mining and Quarrying industry increased by 0.7%, while for the Manufacturing industry, prices decreased by 0.1% as indicated by the Statistical Institute of Jamaica (STATIN).
• The growth in the Mining and Quarrying industry index was mainly attributed to a 0.7% increase in the index for the major groups ‘Bauxite Mining & Alumina Processing’ and ‘Other Mining & Quarrying’. This is due primarily to the appreciation of the Jamaican dollar against the United States dollar. The index for the other major group ‘Other Mining & Quarrying’ moved up by 1.6% owing to an increase in operational cost.
• The index for the Manufacturing industry declined by 0.1% due to a fall of 1.8% in the ‘Refined Petroleum Products’ index. The industry’s movement was tempered by an increase of 0.2% in the index for the heaviest-weighted major group ‘Food Beverages & Tobacco’.  This was largely driven by the ‘Manufacture of Beverages and Tobacco’ group which rose by 0.4% due to higher raw material costs. The index for the group ‘Manufacture of Grain Mill Products, Starches and Starch Products’ recorded an upward movement of 0.2%, due to higher prices for cassava.
• For the point-to-point period March 2022 - March 2023, the index for the ‘Mining & Quarrying’ industry decreased by 14.7%, while the Manufacturing industry increased by 4.2%. Contributing to the decline in the prior was a fall of 15.3% in the index for the major group ‘Bauxite Mining & Alumina Processing’ as  Jamalco closed its plant for 10 months due to a major fire in August 2021. The company however completed phase one of its recovery a year later and the plant is expected to be fully operational by September 2023.

(Source: STATIN)

• Fitch forecasts Costa Rican real GDP growth will decelerate from 4.3% in 2022 to 2.8% in 2023 due to a challenging near-term US growth outlook – Costa Rica’s key export partner.
• Much of the deceleration will be driven by net exports, which will now contribute just 0.3 percentage points (pp) in 2023 compared to 3.1pp in 2022.
• The US is Costa Rica’s most important trading partner, typically serving as a destination for just under half of Costa Rica’s total goods exports and well over half of the country’s total annual visitors. The anticipated slowdown in the US will feed through to less growth in both goods and services exports in the months ahead.
• That said, domestic demand will keep headline growth roughly in line with the 10-year historical average (3.1%) as both inflation and unemployment fall.
• Furthermore, Fitch expects fixed investment growth will pick up on the back of the Banco Central de Costa Rica’s (BCCR) recent rate cuts.
• Fitch sees fairly sizable risks that the mild recession in the US could take place at the start of 2024 instead of Q423, in which case the drop in external demand for Costa Rica would be shallower than Fitch initially anticipate.  

(Source: Fitch Solutions)

• During the Sixth Meeting of the Forum of the Countries of Latin America and the Caribbean on Sustainable Development currently underway in Santiago, Chile, Senior Finance Minister, Dr Ashni Singh, said Guyana reaffirms its commitment to Agenda 2030, both in terms of the country’s national policy agenda and ‘our call to action by the international community’.
• This 2030 Agenda for Sustainable Development is a plan of action for people, the planet and prosperity. It seeks to strengthen universal peace in larger freedom through 7 Sustainable Development Goals and 169 targets.
• The Senior Finance Minister was part of the panel that addressed ‘Strategies to Advance Implementation of the 2030 Agenda for Sustainable Development in the Caribbean’. He took the opportunity at the forum to highlight two particular strategies to advance the national and sub-regional agenda in a manner fully consistent with Agenda 2030.
• “These most recent economic developments have placed Guyana in a position to accelerate the implementation of Agenda 2030, to which we are firmly committed. Indeed, even the most cursory examination of our successive national budgets in recent years will indicate very close alignment between national policy priorities and Agenda 2030,” the Minister posited.
• Guyana is currently spearheading CARICOM’s Food Security Agenda ‘25 by 2025’, which seeks to reduce CARICOM’s food import Bill by 25 per cent by 2025. The country has also outlined its second-generation Low Carbon Development Strategy (LCDS) as a successor to the first LCDS.
• “We in Guyana are under no illusion of the magnitude of the task before us if Agenda 2030 is to be successfully implemented. Indeed, notwithstanding our relatively strong fiscal position, the successful implementation of Agenda 2030 will require a level of investment that exceeds the still limited fiscal resources available. The challenge of financing sustainable development is further compounded when our inherent vulnerability especially to climate change and other external shocks is taken into account,” the Senior Finance Minister explained.

(Source: Guyana Chronicle)