The agriculture sector is on target to meet or surpass last year’s historic high domestic crop production figures as indicated by the Minister of Agriculture and Fisheries, Hon. Pearnel Charles Jr. He highlighted that now is a good time to invest in the country’s agriculture sector and is urging members of the Jamaican diaspora who have land in the country to put them into production.
“We have looked at the numbers, the policies and the legislative changes, and we can present to investors a clear picture that now is the best time for you to invest.”
The Government has invested in the development of agriculture, with $1 billion allocated to an incentive programme to support farmers as well as funding to create infrastructure for irrigation, conduct soil fertility mapping, and improve genetic breeding for small ruminants, among other things.
With additional private sector investments to take advantage of the legislative adjustments and government investments, the agricultural sector should be able to increase its contribution to GDP.
Fitch Solutions will closely monitor the decisions of the monetary policy committees of the Banco Central de Chile (BCC) and Banco Central de Reserva del Perú (BCRP). Both central banks are expected to refrain from hiking beyond their current rates of 11.25% and 7.25%, respectively, as headline inflation moderates and inflation expectations fall.
However, Chile is the only market in the region where core inflation has also notably eased, from 11.1% y-o-y in September to 10.8% in October, underscoring Fitch’s view that the 1,075 basis points (bps) worth of hikes the BCC has enacted since July 2021 are beginning to temper price pressures.
In addition, Fitch estimates a softening in the growth outlook for Chile with a contraction of 0.8% estimated in 2023 – reinforcing the view that the BCC will opt not to hike further, to prevent a deeper decline in activity.
For Peru, Fitch expects that the BCRP will hold rates at 7.25% at its December 7 meeting, a twenty-one-year high. Notably, after hiking by 700bps since August 2021, one-year forward Inflation expectations have continued to tick down, reaching 4.8% in October.
Consequently, as inflation expectations fall nearer to the BCRP's 1.0%-3.0% inflation target, Fitch expects the BCRP will refrain from hiking further and hold its interest rate at 7.25% through H1 2023.
Mexico's headline inflation likely continued to slow in November, a Reuters poll showed Monday, opening the door for the Bank of Mexico to opt for a less aggressive interest rate hike at its Dec. 15 monetary policy meeting. Analysts attributed the expected ease in inflation largely to the impact of pre-Christmas offers and discounts known as "Buen Fin" on some goods and services.
Nonetheless, annual core inflation, which strips out some volatile food and energy prices, was forecast to hit 8.58%, a level not seen since August 2000, which remains a key concern for Banxico.
Banxico, which has an inflation target of 3%, plus or minus one percentage point, has since its current monetary policy tightening cycle began in June 2021 increased the benchmark rate by 600 basis points to its current level of 10%.
Private sector analysts anticipate Banxico will hike its key rate by 50 basis points at the Dec. 15 meeting, slowing the pace following four consecutive 75 basis points rate increases.
In November alone, Mexican consumer prices are set to have grown by 0.70% from the previous month, while the median projection for monthly core inflation was seen at 0.52%.
Residents of China's capital were allowed into parks, supermarkets, offices and airports without a negative COVID-19 test on Tuesday, Dec. 6, the latest in a mix of easing steps nationwide after unprecedented protests against a tough zero-COVID policy.
Authorities have been loosening some of the world's toughest COVID curbs to varying degrees and softening their tone on the threat of the virus, in what many hope could herald a more pronounced shift towards normalcy three years into the pandemic.
As they waited for news, some people, wary the virus might now spread faster, rushed to buy COVID antigen kits and fever medicine and market regulators issued warnings against hoarding and hiking prices.
Both of the city's airports also no longer require people to test to enter the terminal, state media reported, although there was no indication of a change to the rule for a negative test before boarding a flight.
The loosening of the rules comes after a string of protests last month that marked the biggest show of public discontent in mainland China since President Xi Jinping took power in 2012.
China may announce 10 new easing measures as early as Wednesday, Dec. 6, two sources with knowledge of the matter told Reuters. The prospect of relaxation has sparked optimism among investors that the world's second-biggest economy would regather strength and help to boost global growth.
British grocery inflation edged lower in November, the first decline in nearly two years, but remained near record highs, providing little relief for consumers ahead of the key Christmas trading period, industry data showed on Tuesday, Dec. 6.
Market researcher Kantar said grocery inflation in the four weeks to Nov. 27 was 14.6%, down 0.1 percentage points from October's record high, marking the first fall in 21 months.
"Grocery inflation still has a long way to come down though, and based on the current rate, shoppers will have to spend an extra 60 pounds ($73) in December to buy the same items as last year," Fraser McKevitt, Kantar's head of retail and consumer insight said.
Prices are rising fastest in markets such as milk, dog food and butter, said Kantar. It highlighted more evidence of the coping strategies shoppers are adopting to mitigate rising costs, with own-label sales now up 11.7% year-on-year and sales of the cheapest value own-label lines up 46.3%.
The country’s farmers are urged to increase food production to supply demand in the hospitality sector, which is expected to double over the next five years. Minister of Tourism, Hon. Edmund Bartlett, in making the call, noted that with the number of hotel rooms expected to reach 40,000 in five years, it is also anticipated that the need for production will expand.
He noted that the current demand for agricultural produce in the sector is about $67 billion. As such, he said that opportunity exists for farmers to invest in increasing earnings, provide employment, save foreign exchange spent on imports, and ensure that tourists can eat fresh Jamaican food.
Currently, the supply to hotels of fresh fruits, such as strawberries, provides a lucrative opportunity.
The Ministry also provides means to connect farmers and buyers through the Agri-Linkages Exchange (ALEX) project. Already, this year, this project was used to supply more than $125 million worth of produce between January and October.
Overall, the push towards increasing agricultural output bodes well for domestic consumption which is a positive for GDP growth.
A revised Income Tax Relief (Large Scale Project and Pioneer Industries) Act, 2014, that incentivises investments of US$1 billion or more, is expected to be tabled in Parliament by the end of the fiscal year 2022/23, next March.
This was disclosed by the Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, while speaking during the Invest Jamaica 2022 Business Conference at the Montego Bay Convention Centre in Rose Hall, St James, on Tuesday (November 29).
He said the new regime is designed to create a transparent and automatic fiscal incentive framework, which will appeal to local or foreign investors.
“That amended Act will have some provisions in it that allow us to offer investors who are making that kind of commitment to Jamaica, with a minimum level of jobs created, certain benefits,” he told investors.
Brazil's economy decelerated in the third quarter, with a lower than expected growth, but still enough to place it at the highest level of the series since starting in 1996.
The country's gross domestic product rose 0.4% in the three months to September, below the 0.7% growth expected by economists polled by Reuters.
This was the fifth consecutive quarter of expansion, again bolstered by the services sector, putting the largest economy in Latin America 4.5% above the level posted before the pandemic, in the fourth quarter of 2019.
Still, the loss of steam underscores the challenges ahead as the central bank's aggressive monetary tightening to battle inflation begins to weigh more heavily on activity, overshadowing government stimulus ahead of Oct. presidential elections this year that helped boost demand.
The performance in the third quarter was fundamentally driven by a 1.1% growth in the dominant services sector, while industrial output grew by 0.8% and agriculture fell by 0.9%.
A recent report by the United Nations (UN) Economic Commission for Latin America and the Caribbean (ECLAC) disclosed that the majority of the Foreign Direct Investment (FDI) that came into the Caribbean in 2021 went to Guyana.
In the annual report titled ‘Foreign Direct Investment in Latin America and the Caribbean 2022’ it was stated that in the Caribbean, Guyana exhibited the greatest growth in investments last year and even surpassed the Dominican Republic, which in prior years had been the leading recipient of investments in that sub-region.
The foreign investment in the Caribbean for last year totalled US$8.957Bn – this represents a 19.4% increase from 2020 – and is accounted for mainly by capital inflows in Guyana’s hydrocarbon sector and increased FDI in the Dominican Republic.
Guyana’s natural resources sector was listed as the ‘most dynamic’ racking up 63% of the total FDI the country received for the prior year. In fact, Guyana’s FDI for 2021, was an inflow of US$4.453Bn which is 116% more than in 2020. “Guyana has positioned itself for the first time as the leading FDI destination in the sub-region, accounting for 50% of inflows, followed by the Dominican Republic (35%),” the report stated.
ECLAC revealed that while the FDI in the Region received in 2021 is an increase from what was recorded in 2020, it was highlighted that the growth was not enough to achieve the levels seen before the pandemic. As such, the ECLAC called on countries in the Region to use FDI strategically, owing to the weak economic recovery recorded last year.
China is set to announce an easing of its COVID-19 quarantine protocols in the coming days and a reduction in mass testing, sources told Reuters, a marked shift in policy after anger over the world's toughest curbs fuelled widespread protests.
Cases nationwide remain near record highs but the changes come as some cities have been lifting their lockdowns in recent days, and a top official said the ability of the virus to cause disease was weakening.
Health authorities announcing the easing in their areas have not mentioned the protests - the biggest show of civil disobedience in China for years - which ranged from candle-lit vigils in Beijing to street clashes with police in Guangzhou.
The frustration boiled over last week in demonstrations of public defiance unprecedented in mainland China since President Xi Jinping took power in 2012. The unrest comes as the economy is set to enter a new era of much slower growth than seen in decades.
Expectations have grown around the world that China, while still trying to contain infections, could look to re-open its borders at some point next year once it achieves better vaccination rates among its hesitant elderly. Health experts warn of widespread illness and death if COVID is let loose before vaccination is ramped up.
