• Fitch Solutions forecasts that increased tax revenues and oil profits will narrow Colombia’s fiscal deficit to 6.7% of GDP in 2022, from 7.1% in 2021. The 2021 fiscal deficit came in slightly narrower than the forecast of 7.2%, largely due to increased tax collection resulting from above-trend economic growth. 
• High commodity prices, moderate oil production growth, and strong economic activity will bolster fiscal revenue ensuring it outpaces spending growth, particularly as it is expected that President-elect Gustavo Petro will only implement small increases in expenditure in 2022. Revenues are projected to grow by 16.1% in 2022 down from 25.9% in 2021. This increase will be supported by higher corporate taxes as the rate was increased to 35.0% in 2022 from 31.0%. 
• Additionally, Fitch’s Oil & Gas team forecasts Brent crude oil prices will average USD100.0/barrel (/bbl) in 2022 and USD90.0/bbl in 2023, up from USD71.0/bbl in 2021. Coupled with modest increases in oil production in Colombia, this will boost oil royalties and other intakes from the energy sector, which has historically accounted for approximately 20.0% of government revenues. 
• Expenditures will grow 13.5% in 2022, revised up from the previous 9.3% forecast, particularly as President-elect Petro will likely look to deliver on his campaign promises to expand spending on social programmes.
• These factors underpin Fitch’s forecast that fiscal deficit will fall to 6.7% in 2022, and average 5.4% between 2023 and 2026. The average is up from the prior forecast of 4.4% of GDP.

(Source: Fitch Solutions)

• A few years ago Sri Lanka’s economy was growing strongly enough to provide jobs and financial security for most. It’s now in a state of collapse, dependent on aid from India and other countries as its leaders desperately try to negotiate a bailout with the International Monetary Fund. 
• The situation in Sri Lanka is a complete economic breakdown that has left ordinary people struggling to buy food, fuel, and other necessities and has brought political unrest and violence. 
• Sri Lanka’s crisis is largely the result of staggering economic mismanagement combined with the fallout from the pandemic, which along with the 2019 terrorist attacks devastated its important tourism industry. The COVID-19 crisis also disrupted the flow of payments home from Sri Lankans working abroad. 
• Sri Lanka’s foreign exchange reserves plummeted, leaving it unable to pay for imports or defend its beleaguered currency, the rupee. Ordinary Sri Lankans -- especially the poor -- are paying the price, as they have to wait for days for cooking gas and petrol -- in lines that can extend more than 2 kilometers (1.2 miles). 
• Food price inflation is running at 57%, according to government data, and 70% of Sri Lankan households surveyed by UNICEF last month reported cutting back on food consumption. Many families rely on government rice handouts and donations from charities and generous individuals. The crisis is a crushing blow to Sri Lanka’s middle class, estimated to account for 15% to 20% of the country’s urban population.

(Source: AP News)

• Russia’s coal shipments to China have been rising even though overall shipments to China have declined, new data from S&P Global Market Intelligence showed. 
• Russian seaborne coal deliveries to China surged 55% to 6.2Mn tonnes in the first 28 days of June compared to the same period last year, S&P’s Commodities at Sea database showed. In May, Russian seaborne supply to China also rose by 20% year-on-year to 5.5Mn tonnes. 
• Domestic production in China has also been increasing. The latest data from the National Bureau of Statistics of China showed that between January and May, raw coal production rose 10.4% year-on-year to 1.81Bn tonnes, while imports dropped to around 96Mn tonnes — down 13.6% compared to a year ago. 
• “Despite lower demand and higher domestic coal production, China has been buying significantly higher Russian coal since May 2022,” S&P Global Market Intelligence associate director Pranay Shukla said told CNBC. 
• Russia is a major global coal producer and exporter. However, since its invasion of Ukraine, Moscow has been forced to sell coal at a discount after countries like Japan banned Russian imports of the commodity.

(Source: CNBC)

• Exports to Jamaica’s top trading partners increased by 14% to US$173.1Mn for the first two months of 2022 compared to the corresponding period last year. These partners are the US, United Kingdom, Canada, Puerto Rico, and Finland. 
• A report from the Statistical Institute of Jamaica (STATIN) indicated that the out-turn for January and February was largely attributed to higher exports of bunker C fuel oil and Turbo A1 fuel to the USA. 
• However, total export earnings fell by 9.5% to US$208.5Mn compared to US$230.4Mn earned in the similar period in 2021. The decline was primarily due to a 66.6% fall in the value of outflows in the category ‘Crude Materials’. 
• Further, domestic exports, which accounted for 84.6% of total exports, declined by 11.8% to US$176.4Mn due to an 80.6 percentage point fall in the export of alumina owing to the closure of Jamalco. 
• Meanwhile, Jamaica’s import expenditure increased to just over US$1Bn, consequent on a 32.4% increase in imports for the review period. This was due to increased spending on all categories of imported goods likely owing to the global rise in the price of commodities and consumer goods stemming from the war on Ukraine and elevated supply chain challenges. 
• Imports of ‘Raw Materials/Intermediate Goods’ rose by 46.6%, the total spend on imports of Consumer Goods increased by 53.7%, while imports of ‘Fuels and Lubricants’ increased by 10.7% over the similar period in 2021.

(Sources: STATIN & NCBCM Research)

• President Ali announced that several Caribbean Community (CARICOM) member states have come together to advance work on a regional energy strategy that will guide Caribbean nations in areas for investment. 
• Discussions on the strategy have already begun with the President of Suriname, Chandrikapersad “Chan” Santokhi, and Prime Minister of Trinidad and Tobago, Dr. Keith Rowley and his Energy and Energy Industries Minister, Stuart Young. “We are proposing to move rapidly on a regional energy strategy to look at all the potential areas for investment, to bring investors together, bring the markets together, and see how quickly, and transparently as possible we can unlock opportunities,” Dr. Ali explained. 
• The strategy will also include Brazil, which is not a part of CARICOM, but, nonetheless, is currently in negotiations with Guyana and Suriname for the development of an energy corridor. 
• The aim will be to find a solution that removed bureaucratic delays, advances dynamism, and unlocks its natural gas potential, which can contribute to rebalancing the supply side for the region.

(Source: Guyana Chronicles)

• President Ali announced that several Caribbean Community (CARICOM) member states have come together to advance work on a regional energy strategy that will guide Caribbean nations in areas for investment. 
• Discussions on the strategy have already begun with the President of Suriname, Chandrikapersad “Chan” Santokhi, and Prime Minister of Trinidad and Tobago, Dr. Keith Rowley and his Energy and Energy Industries Minister, Stuart Young. “We are proposing to move rapidly on a regional energy strategy to look at all the potential areas for investment, to bring investors together, bring the markets together, and see how quickly, and transparently as possible we can unlock opportunities,” Dr. Ali explained. 
• The strategy will also include Brazil, which is not a part of CARICOM, but, nonetheless, is currently in negotiations with Guyana and Suriname for the development of an energy corridor. 
• The aim will be to find a solution that removed bureaucratic delays, advances dynamism, and unlocks its natural gas potential, which can contribute to rebalancing the supply side for the region.

(Source: Guyana Chronicles)

• Barbados and the region continue to face the chilling reality that in 20 years, a substantial portion of tourism revenues will be funding the cost of addressing the impact of climate change. 
• This concern was raised by Barbados’ Ambassador Extraordinary and Plenipotentiary with Responsibility for Climate Change, Small Island Developing States and Law of the Sea, Senator Elizabeth Thompson, who said that the Caribbean tourism sector earns $24Bn annually, contributing between 17 to 90% to GDP, and providing 40% of the jobs in the market. 
• The Inter-American Development Bank (IDB) is projecting that by 2050 the cost of addressing climate impacts for tourism will amount to US$22Mn. 
• Senator Thompson explains that the only way to change that equation is by building resilience. The reality is that tourism revenues are so integrated into the economy, with direct and indirect jobs, the region has to build resilience beyond the tourism sector. 
• Building resilience in the sector involves finding ways to guard against the ravages of climate change, protecting coastlines and coral reefs, committing to and operationalising the transition to renewable energy resources, boosting agricultural output with technology for food security, and addressing the water scarcity issues, among other measures. 
• Until then, the current challenge is for Barbados to position itself as an all-year balanced tourism destination to drive sustainability by focusing on initiatives including educating tourists on single-use plastic, food waste, carbon offsetting etc., which results in inclusive growth and economic impact.

(Source: Barbados Today)

• On June 28, 2022, the United States, imposed sanctions on more than 100 targets and banned new imports of Russian gold, acting on commitments made by the Group of Seven leaders this week to further punish Russia over its invasion of Ukraine. 
• The U.S. Treasury Department said it imposed sanctions on 70 entities, many of which it said are critical to Russia's defense industrial base, as well as 29 people in an effort to hinder Russia's ability to develop and deploy weapons and technology. 
• "Targeting Russia's defense industry will degrade Putin's capabilities and further impede his war against Ukraine, which has already been plagued by poor morale, broken supply chains, and logistical failures," Treasury Secretary Janet Yellen said in a statement. 
• Fresh sanctions were imposed on Rostec, Russia's state aerospace and defense conglomerate. The Treasury said Rostec's "management umbrella includes more than 800 entities across a wide range of sectors" and that all entities owned 50% or more, directly or indirectly, by Rostec are blocked. United Aircraft Corporation (UAC) was sanctioned to "weaken Russia's ability to continue its aerial assault on Ukraine," the Treasury said. 
• The United States slapped sanctions on Russia's largest truck manufacturer, Kamaz (KMAZ.MM), saying its vehicles have been seen carrying missiles and Russian soldiers throughout the Ukraine conflict.

(Source: Reuters)

• NATO formalized its invitation to Sweden and Finland to join its alliance on June 29, a historic expansion of the defense bloc that directly undercuts Russian President Vladimir Putin's aims as his war in Ukraine grinds ahead. 
• The group collectively decided to approve countries' applications to join after Turkey dropped its objections, paving the way for NATO's most consequential enlargement in decades. 
• "The accession of Finland and Sweden will make them safer, NATO stronger, and the Euro-Atlantic area more secure. The security of Finland and Sweden is of direct importance to the Alliance, including during the accession process," the statement said. 
• The decision will now go to the 30 member states' parliaments and legislatures for final ratification. NATO's leaders said they expected the process to move quickly, allowing for an unprecedentedly swift accession and a show of unity against Putin.

(Source: CNN)

• Real estate investors are being urged to diversify into other industries, in order to create the levels of economic expansion that will support continued growth in the sector. 
• The advice comes from State Minister in the Ministry of Industry, Investment and Commerce, Dr. the Hon. Norman Dunn, who pointed out that such investment would create wealth for Jamaicans, who could then put their money into real estate. 
• “What good are new houses, apartments, offices and factories if we do not build other industries at the same time, so that people have the financial resources to acquire real estate?” he asked, while addressing the Annual General Meeting of the Realtors Association of Jamaica (RAJ) at the Terra Nova Hotel All-Suite Hotel in St. Andrew on June 22. 
• He noted that while “investment from foreign direct investors can support this process, there is also a place for Jamaicans to commit to nation-building by actively engaging in direct investments to different industries”. 
• There are also opportunities in areas such as agro-processing, light manufacturing, and in finalising goods for export. Therefore, domestic private sector investments in these areas can ensure growth to sustain the current expansion being witnessed in the real estate industry.

(Source: JIS News)