• Bank lending to eurozone companies held steady, maintaining the sector's biggest borrowing binge in over a decade, despite rising interest rates and a looming recession, European Central Bank data showed on Monday, November 28.
• Lending to businesses in the 19-country euro area expanded by 8.9% in October, unchanged from September when it rose to its highest rate since early 2009, fresh data showed. Household credit growth meanwhile slowed to 4.2% from 4.4%.
• The monthly flow of loans to companies, however, slowed sharply, to 24.0Bn euros from 36.6Bn a month earlier with the flow of short-term loans coming to a standstill.
• Growth in the M3 measure of money circulating in the eurozone, meanwhile slowed to 5.1% from 6.3%, coming below Reuters expectations of 6.2%.

(Source: Reuters)

• Two iconic Jamaican conglomerates, Jamaica Producers Group Limited (‘JP’) and PanJam Investment Limited (‘PanJam’), announced that they reached an agreement that will see the amalgamation of their businesses to create a powerful new group of companies, strategically-positioned to take advantage of opportunities both locally and globally.
• JP was founded as a co-operative of banana growers over 90 years ago but has since emerged as a group that owns food and juice brands along with logistics and shipping services. PanJam is an investment holding company comprising a wholly-owned property management business and investor partnerships in insurance, tourism and attraction development, manufacturing, and real estate development.
• This arrangement, subject to the approval of the shareholders of both companies and the relevant regulators, will result in PanJam acquiring JP’s operating assets in exchange for JP taking a 34.5% interest in PanJam.
• Post-transaction, PanJam, which will ultimately hold the combined businesses, will be renamed Pan Jamaica Group Limited (‘the Group’). JP will emerge as the largest shareholder of the Group, with its shares in the Group being its principal operating asset. Both the renamed Pan Jamaica Group and JP will remain listed on the Main Market of the Jamaica Stock Exchange. The transaction is expected to be completed within the first quarter of 2023.
• The combined balance sheet and experience of both companies will allow Pan Jamaica Group to have an excellent platform for growth in key industries including property and infrastructure, finance, food and logistics. This will in turn capture synergies, bolster profitability, realize economies of scale and improve shareholder value.

(Source: JSE)

• The return of direct flights from Italy is being hailed by local stakeholders as a major boost for air connectivity out of Europe and for the upcoming winter tourist season, which officially starts on December 15. “The addition of these direct flights speaks to the confidence our airline partners have of the destination,” Minister of Tourism, Hon. Edmund Bartlett, told JIS News.
• Government officials, attraction and hotel owners, transport operators, and other business interests, said that the latest development, which saw the inaugural arrival of Neos Airline out of Milan, Italy into Montego Bay on November 20, represents an important sign of recovery since 2019 and the subsequent onslaught of the COVID-19 pandemic.
• The minister expects the return of direct flights to dramatically increase arrivals from Italy, pointing to the 13,000 visitors Jamaica received in 2019. During the upcoming winter season, the airline will connect Italy to Jamaica with two weekly flights.
• This development will further support the recovery of the tourism sector, and contribute to spillover effects to other sectors such as agriculture, manufacturing and transportation, which will in turn drive economic growth.

(Source: JIS News)

• Barbados secured a major “game-changer” contract with the Government of Rwanda to establish a new pharmaceutical industry, the first in the Caribbean.
• “Perhaps the biggest game changer since we have come to the office is about to unfold, and we have been working on it very quietly for the last six months or so, and that is addressing the issue of pharmaceutical equity and creating a platform for jobs, investment and earnings for a pharmaceutical industry in Barbados for the first time,” said Mottley.
• The Government of Rwanda, the European Union, the European Investment Bank, the World Health Organization (WHO), and the Susan Buffett Foundation had already committed to assisting Barbados in establishing the industry.
• The Prime Minister noted that “This has been a major achievement for a small state like Barbados to be able to locate itself centre of the Americas as a location for the development of a pharmaceutical industry.”
• The current deal is expected to provide over 4,000 jobs for Barbadians within the next five years, with a focus on the development of cancer treatment pharmaceuticals, vaccinations, and drugs for women’s reproductive health care difficulties.

(Source: Caribbean News Now)

• The International Monetary Fund (IMF) Article IV consultation with Saint Lucia concluded that having “been severely affected by the Covid-19 pandemic and the increase in import prices due to the war in Ukraine, tourist arrivals have rebounded significantly in 2021–22, but the recovery remains incomplete”
• However, the public balance sheet remains under considerable strain, with a sizeable fiscal deficit and a significant increase in public debt since 2019. On the other hand, the financial sector has remained stable, but nonperforming loans have risen during the pandemic.
• Output is projected to gradually recover to the pre-pandemic level by 2024, slowed by the impacts of the war in Ukraine and the tightening of global financial conditions. However, public and private investments are constrained by weak balance sheets, as well as higher input costs and supply constraints.
• The fiscal outlook is challenging due to high public debt and large refinancing needs which lead to financing constraints. Without additional policy measures, public debt is projected to stabilize at around 90% of GDP in the medium term, limiting the space for public infrastructure and social investments.
• Downside risks dominate, mainly from higher global food and energy prices, global inflation and tightening of financial conditions, supply bottlenecks, and the ongoing pandemic. The natural disaster risk remains a near-term challenge and is expected to intensify with climate change.

(Source: Caribbean News Global)

• Providers of environment, social and governance (ESG) ratings on companies will be asked to apply a voluntary best practice code as a first step to regulating the sector, Britain's Financial Conduct Authority (FCA) said on Tuesday.
• Trillions of dollars have flowed into sustainable investments globally using unregulated ESG ratings on companies as a guide for their 'green' credentials, leaving regulators worried about greenwashing or over inflated ESG claims.
• Britain's government is considering giving the FCA powers to directly regulate ESG ratings providers.
• In the meantime, the FCA said it wants the sector to develop and follow a voluntary code of conduct to increase transparency, ensure good governance and that conflicts of interest are properly managed with sufficiently robust systems and controls.
• The code will reflect recommendations from the global securities regulatory body IOSCO, and developments in Japan and the European Union, the FCA said.

(Source: Reuters)

• The number of Americans filing new claims for jobless benefits increased to a three-month high last week amid rising layoffs in the technology sector, but that likely does not suggest a material shift in labour market conditions, which remain tight.
• Economists urged against reading too much into the rise in weekly unemployment benefit claims reported by the Labor Department on Wednesday, noting the data tend to be volatile at the start of the holiday season as companies temporarily close or slow hiring. Claims remain in line with pre-pandemic levels.
• "It's certainly possible that layoffs are helping to boost increases in claims filings," said Isfar Munir, an economist at Citigroup in New York. "While this could be interpreted as evidence of a softening labour market, we would caution against this. The holiday season introduces a great deal of volatility into this data. It may be hard to disentangle the impact of seasonal patterns versus layoffs until January."
• Initial claims for state unemployment benefits rose 17,000 to a seasonally adjusted 240,000 for the week ended Nov. 19, the highest level since mid-August. Economists polled by Reuters had forecast 225,000 claims for the latest week.
• Moody's Analytics estimates the break-even level for claims at around 270,000. The jobs market has remained resilient in the face of the Federal Reserve's most aggressive interest rate-hiking cycle since the 1980s aimed at curbing high inflation by dampening demand in the economy.
• Morgan Stanley sees the Fed delivering its first rate cut by December 2023, taking the benchmark rate to 4.375% by the end of that year. Barclays sees the rate between 4.25% and 4.5% by the end of next year, following a rate cut.

(Source: Reuters)

• The Bank of Jamaica (BOJ) says the economy is still projected to grow in the range of 2.5 to 4.5 % for the fiscal year 2022/23. This is following an 8.2% outturn recorded in 2021/22, as indicated by the Governor, Richard Byles.
• There are currently signs, according to the BOJ Governor, that the economy has continued to expand for the September 2022 quarter, and the December 2022 quarter, to date. Among the positive indicators is the 6.6% unemployment rate recorded for July 2022, which was 1.9 percentage points lower than the outturn for the corresponding period last year.
• The Bank expects that growth will continue to be driven by the services industry, particularly tourism, which has been recovering at a rapid pace. There has also been some buoyancy in the agricultural sector, which is expected to continue as the tourism sector recovers and weather conditions improve.
• The forecast also reflects the recent resumption of production at the JAMALCO alumina plant in Halse Hall, Clarendon, which was closed for an extended period after being ravaged by fire in August 2021.
• Meanwhile, growth for the fiscal year 2023/24 is projected to moderate further as income growth among Jamaica’s main trading partners normalises to pre-COVID rates. The Governor cautioned, however, that risks to the forecast are skewed to the downside.

(Source: JIS News)

• Jamaica’s foreign exchange market remains relatively stable, partly reflecting actions by the Central Bank in response to higher-than-targeted inflation. According to the BOJ Governor, the foreign exchange rate for the fiscal year 2022/23, to November 11, depreciated by 0.5%.
• This was significantly slower than the 6.7% depreciation recorded over the corresponding period of 2021/22 he said while speaking during the BOJ’s semi-virtual quarterly media briefing on Friday (November 18).
• The Central Bank, in this context, sold US$396.1Mn via its BOJ Foreign Exchange Intervention and Trading Tool (B-FXITT) facility over the period. This was complemented by sales of US$442.7Mn to selected public enterprises, including the State oil refinery – PETROJAM.
• “Notwithstanding these sales, the Bank net purchased from the market, over this period, US$521.6Mn. As of November 11, 2022, Jamaica’s gross international reserves remained substantial at approximately US$4.3Bn. The Bank projects that the gross reserves will continue to remain adequate in the medium-term,” the Governor further stated

(Source: JIS News)

• Brazil's Economy Ministry on Thursday cut its 2023 GDP growth forecast to 2.1%, from the 2.5% anticipated in September, due to a deterioration in the global economic outlook. Private economists in a Brazilian central bank weekly survey projected gross domestic product would grow 0.7% in Latin America's largest economy next year.
• In a statement, the ministry's Secretariat for Economic Policy stressed that the global economy has weakened in the face of monetary tightening in the United States and other developed economies, which has hampered prospects for growth. "Our base scenario considers market estimates, whose projections indicate a slowdown in global activity, but do not point to a recession," it said.
• At the same time, the ministry kept its 2022 GDP growth outlook at 2.7% on the basis of solid activity in the services sector and an improved labour market. That was in line with the market's 2.77% estimate.
• The ministry decreased its 2022 inflation forecast to 5.85% from the 6.3% projected in September. For 2023, the official inflation projection now stands at 4.6%, up from the prior 4.5% forecast. This too is likely factored into the downward revision for 2023 as it erodes consumer spending capability.

(Source: Reuters)