• The International Monetary Fund said on Thursday that first-quarter global growth slightly outpaced projections in its April forecasts, but data since then has shown a mixed picture, with "pockets of resilience" alongside signs of slowing momentum.
• The IMF said in a briefing note for a G20 finance leader’s meeting in India next week that manufacturing is showing weakness across G20 economies and global trade remains weak, but the demand for services is strong, particularly where tourism is recovering.
• The IMF did not indicate any changes to its April 2023 global GDP growth forecast of 2.8% - down from 3.4% in 2022 - but said that risks were "mostly" tilted to the downside. These include the potential for Russia's war in Ukraine to intensify, stubborn inflation and more financial sector stress that could disrupt markets.
• However, the Fund said that inflation "seems to have peaked" in 2022, and core inflation, while also easing, remains above targets in most G20 countries. “Reduced supply chain disruptions and lower goods demand mean likely disinflationary pressures from goods,” the IMF said.
• "However, services inflation - which is now the major driver of core inflation - is expected to take longer to decline," the IMF said. Strong consumer demand for services, buoyed by demand, strong labour markets and the post-pandemic shift in spending from goods to services, is likely to sustain these price pressures, the IMF said.

(Source: Reuters)

• Global stocks traded around their highs for the year on Thursday as investors bet that the Federal Reserve was finally taming inflation and could end its rate-hiking cycle as soon as this month.
• S. data on Wednesday showed consumer prices rose modestly in June, registering the smallest annual increase in more than two years as the economy shifted into disinflation mode, helping to send oil prices higher.
• However, the prospect of an end to rising borrowing costs, in the United States at least, kept downward pressure on the dollar, which fell to its lowest in more than a year against the euro on Wednesday on the U.S. inflation news.
• Interest rate futures showed markets have fully priced in another rate hike from the Federal Open Market Committee (FOMC) later this month, but expectations of any further increases have faded.
• Eren Osman, managing director of wealth management at Arbuthnot Latham & Co, said the U.S. inflation news was encouraging, though markets will be scrutinising the U.S. jobs data later on Thursday for signs of continued softening to underpin the disinflation story. "Let's give it a little cheer, but I wouldn't start to extrapolate that to mean job done and no more hikes," Osman said.
• "There is at least one more hike coming out of the Fed, but I do think it means investors should feel very comfortable about looking to add duration to their portfolios now, and that is something we are looking to do ourselves. The risk is really to the downside here from yields," Osman said.

(Source: Reuters)

• Regency Petroleum Co. Limited (RPL) has advised that it has privately placed, by way of an exempt distribution, US$1.4Mn in Secured Notes Due 2025 – arranged by GK Capital Management Limited.
• The US$ Fixed Rate Secured Notes will be issued in two tranches with Tranche A amounting to US$600,000 issued as of June 30, 2023, and Tranche B amounting to US$800,000 and expected to be drawn down on or before September 29, 2023.
• The proceeds from this debt raise will be used to construct a service station located on Spanish Town Road.
• Regency Petroleum noted that the funds will be used to build a service station on Spanish Town Road. This is part of the company’s strategy of securing prime locations across the island, which is expected to translate to greater auto fuel sales and improved shareholder value.

(Source: JSE)

• The Bank of Jamaica's Financial Policy Committee says local macroeconomic conditions improved up to March this year. The committee which met on Wednesday, July 5, says this was reflected in moderate improvements in the composite indices of financial conditions.
• The Central Bank also said systemic risks associated with financial cycles and the system's exposure to other financial actors were moderate.  
• Data up to the end of March indicated that financial institutions remain adequately capitalized and profitable.
• Several positive domestic and external macroeconomic developments supported the stability of the financial system for the March 2023 quarter. The Jamaican economy grew by 4.2% for the quarter and reflected growth in most economic sectors.  Furthermore, the annual point-to-point inflation rate for Jamaica decelerated to 6.2% at the end of March 2023, which was below the outturn of 9.4% recorded at end of 2022. Likewise, in the United States, inflation trended downwards to 5.0% at March 2023, relative to 6.5% at end of 2022.
• Concurrently, during the quarter, the Bank of Jamaica maintained its decision to hold its policy interest rate at 7.0% while the Federal Reserve of the United States (FED) slowed its pace of interest rate increase.
• The Financial Policy Committee also says its stress test of the system shows that the deposit-taking institutions and securities dealers are resilient to the risks, where interest rate risk and credit risk shocks were considered.
• The committee found, however, that there are still vulnerabilities to further increases in interest rates, which would need to be remedied by additional capital injections. The stress test looks at the balance sheets of domestic financial institutions.

(Sources: BOJ and RJR)

• The Civil Aviation Board (JAC) announced on Tuesday, July 4, that the Dominican Republic has achieved a significant milestone in air transportation.
• Between January and May of this year, a record-breaking 7,180,905 passengers were transported to and from the country. This figure represents a remarkable 17% growth compared to the same period last year.
• José Marte Piantini, the president of the JAC, expressed his satisfaction with the progress and stated that air transport in the country has experienced rapid development since August 2020, becoming the growth leader in the region. He also mentioned that the government’s implemented policies, under the Civil Aviation Board, have played a crucial role in establishing air transport as a competitive sector. These policies include a comprehensive set of measures aimed at increasing traveller flows to and from the country.
• Piantini further revealed that the Punta Cana Airport has been the busiest, serving as a gateway for 4,069,335 passengers during the first five months of 2023. Las Américas Airport follows closely behind with 2,062,795 passengers. These two airports alone account for 83% of the total passenger traffic in and out of the country. The Cibao Airport transported 772,692 passengers, while the Puerto Plata Airport served 362,421 passengers during the same period.
• Emphasizing the commitment to improving air connectivity, Piantini mentioned the collaborative efforts of the JAC with other institutions in the sector. One notable achievement is the recent agreement signed with Cuba, enabling additional Dominican airlines to enter the Cuban market, which was previously limited to only two operators.
• The strategic approach of the JAC has resulted in the establishment of new airlines, the introduction of new routes, and the formation of new agreements. Consequently, more travellers are choosing the Dominican Republic as their preferred destination. Piantini expressed optimism, stating that the country aims to surpass the milestone of 17 million passengers transported through its airport terminals by the end of this year.

(Source: Dominican Today)

• Grenada and St Vincent and the Grenadines recently inked a Memorandum of Understanding (MOU) that is anticipated to increase technical collaboration in the agriculture sector.
• The Technical Cooperation Agreement cements the existing relationship between the Ministry of Agriculture and Lands, Fisheries, and Cooperatives (Grenada) and the Ministry of Agriculture, Forestry, Fisheries, Rural Transformation, Industry & Labour (St Vincent and the Grenadines).
• “It is very important that from our level we establish and consolidate what has been happening for a long while. We have just imported over 6,000 pounds of yams from St Vincent to provide planting material for the farmers. A lot of planting material will also be coming from St Vincent and will be supplied to Grenadian farmers for the Food Security Enhancement project,” remarked Minister of State with responsibility for Agriculture and Lands, Fisheries and Cooperatives Adrian Thomas.
• The arrangement will also provide support for Grenada’s Artificial Insemination programme, which will promote a working relationship where both countries can be leaders in the export of livestock to other countries.
• The agreement will also foster a working relationship with technicians from both countries to ensure that their food import bills are reduced.

(Source: Now Grenada)

• S. consumer prices rose modestly in June and registered their smallest annual increase in more than two years as inflation continued to subside, but probably not fast enough to discourage the Federal Reserve from resuming raising interest rates later this month.
• In the 12 months through June, the CPI advanced 3.0%. That was the smallest year-on-year increase since March 2021 and followed a 4.0% rise in May. The CPI gained 0.2% last month after edging up 0.1% in May, the Labor Department said on Wednesday. The CPI was lifted by rises in gasoline prices as well as rents, which offset a decrease in the price of used motor vehicles.
• Economists polled by Reuters had forecast the CPI rising 0.3% last month and climbing 3.1% year-on-year. Excluding the volatile food and energy categories, the CPI increased 0.2% in June. It was the first time in six months that the so-called core CPI did not post monthly gains of at least 0.4%. In the 12 months through June, the core CPI rose 4.8% after increasing 5.3% in May.
• Annual consumer prices have retreated sharply from their 9.1% peak in June 2022, which was the biggest increase since November 1981 as last year's large rises dropped out of the calculation. Nevertheless, inflation remains well above the Fed's 2% target, with the labour market still tight.
• Though employment gains were the smallest in 2-1/2 years in June, the unemployment rate fell close to historically low levels and wage growth was strong.
• Core inflation is expected to continue receding in the months ahead. The labor market is cooling and independent measures show rents on a downward trend. Rent measures in the CPI tend to lag the independent gauges by several months.

(Source: Yahoo Finance)

• Companies in most countries have enough profit to be able to absorb an increase in wages needed for staff to cope with high inflation, the Organisation for Economic Cooperation and Development said on Tuesday.
• Although labour markets are tight, employers have not raised wages in pace with inflation in 31 out of the 34 countries tracked in the Paris-based OECD's 2023 Employment Outlook.
• After taking inflation into account, wages have fallen 3.8% in the first quarter of 2023 from a year earlier with the drop the biggest in Hungary at 15.6%, the report said. While workers have seen high inflation erode their purchasing power, all countries in the report have seen businesses' profits grow faster than wages since the pandemic.
• "The cost of a living crisis is a cost that has to be shared between what governments can do, what companies have to do and what workers have to do," OECD head of labour policy Stefano Scarpetta told a news conference.
• "There is some room in some room in profits to accommodating some increase in wages without necessarily generating a wage-price spiral," Scarpetta added. How much wages could be raised would depend country by country and sectors would also need to be taken into account as well as profit increases were smaller at small and mid-sized firms, he said.

(Source: Reuters)

• Listed energy company FESCO has officially launched its line of liquefied petroleum gas (LPG) products.
• Speaking at the launch on Thursday, FESCO’s Managing Director Jeremy Barnes said the company has been testing FESGAS in the market since April.
• The company has tripled its throughput capacity at its location by just testing the market. This month, the company will be targeting commercial customers. Currently, the company operates in Kingston and St. Andrew, St. Catherine, Clarendon, Mandeville, and parts of St. Mary through its distribution outlet in Stony Hill.
• Barnes boasted that FESCO's innovation includes the use of no-BLEVE (boiling liquid expanding vapour explosion) cylinders, which is a technology that makes it safe for apartment use.
• He further highlighted that FESCO has already captured 2.5% of the market share in the few months since it began offering LPG.
• The company’s entrance into the LPG market adds a new product line that will be a growth driver for FESCO that will ultimately bring value to its shareholders.

(Source: RJR)

• The Trinidad and Tobago-based ANSA McAL Group of Companies will be investing more than $150 million in its operations in Jamaica this year as part of the management’s strategic thrust to improve the entity’s efficiency and profitability.
• Chief Executive Officer (CEO), Anthony N. Sabga III, made the disclosure while addressing a special reception hosted by the entity for Jamaican business stakeholders on Thursday (July 6) at The Jamaica Pegasus Hotel in New Kingston.
• Sagba noted that the company will invest more than $150 million in retooling Jamaican operations to drive further efficiencies and capacity expansion. He further noted that Jamaica is part of the company’s journey of achieving its ambitious target, which is to double its size and profitability by 2027, to achieve US$300 million profit annually.
• ANSA McAL Limited, which comprises 48 companies, is one of Trinidad’s largest conglomerates. Its activities encompass the automotive, beverage, construction, distribution, financial services, manufacturing, real estate, retail, media, and service sectors. The Group, which has been operating for 140 years, has business interests in eight territories in the Caribbean, Europe, and North America. In 2017, the entity completed its acquisition of Lewis Berger Overseas Holdings, a major shareholder of all three Berger paint companies in Trinidad and Tobago, Barbados, and Jamaica.
• Minister of Industry, Investment and Commerce, who was happy to hear the announcement, noted that the planned investment has significant potential for the local manufacturing sector.
• One of the major benefits of this development will be gainful employment for more individuals which by extension, will be beneficial to the country’s employment and output figures.

(Source: JIS)