• More local fruits and ground provisions will be able to reach international shores, as Jamaica now has export market access to several additional countries. Minister of Agriculture, Fisheries, and Mining, Hon. Floyd Green, said among these is Barbados for pineapples.
• He informed that the country is now allowed to export frozen cake, soursop, sweetsop, breadfruit, plantain, yam, sweet and irish potato to Cayman.
• The Minister was speaking during the recent launch of the 2023 Denbigh Agricultural, Industrial, and Food Show at Hi-Pro Ace Supercentre in St. Catherine.
• Green further advised that they have been working with Trinidad and Tobago where they now can export bananas and have been working with the United States of America (USA), where they are now able to export June plum and soursop. He commended the Plant Quarantine and Produce Inspection team for their role in achieving the feat.
• Noting that these markets are of “high value”, he urged producers must make use of the new opportunities.
• Green maintained that the nation “must be bullish about exports”, pointing out that this is how the country will realize wealth creation in agriculture, and despite being a small country, Jamaica has an immense reach.

(Source: JIS News)

• After holding at 13.75% at its June 20-21 meeting, Fitch Solutions suspects the Banco Central do Brasil (BCB) will begin an easing cycle at its next meeting on August 2, lowering the Selic rate to 13.50%.
• Fitch sees the Selic at 12.50% at the end-2023 and 10.00% at the end-2024.
• While moderating inflation and reduced risks from fiscal policy will allow the bank to cut, Fitch’s forecast assumes the cycle will be cautious, due to still-elevated inflation expectations, a tight labour market and a relatively hawkish US Fed.
• Risks to the forecast are to the upside. While cuts are seen as very likely in H223, they could well start later in the year, or be less aggressive, than currently factored in.

(Source: Fitch Solutions)

• The International Monetary Fund (IMF) is to make available US$38Mn to Barbados after the island completed the first reviews of the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) arrangements with the Washington-based financial institution.
• The IMF said Barbados is implementing an ambitious homegrown economic reform and climate policy agenda aimed at strengthening fiscal sustainability, advancing structural reforms, unlocking the economy's growth potential, increasing resilience to climate change, and greening the economy.
• After successfully weathering a series of shocks in recent years, the Barbadian economy has recovered, with eight consecutive quarters of growth, and continues expanding in 2023 underpinned by an ongoing rebound in tourism and related activities. 
• Notably, the fiscal balance has significantly improved (from -1.4% in FY2022/23 to an estimated 1.1% for FY2023/24), and public debt has been placed on a downward path, reaching 122.5% of GDP as of end-fiscal year 2022/23 (119.6% excluding IMF loans provided for balance of payments support) from 137.9% the previous period. In addition, international reserves have risen to US$1.6Bn as of end-March 2023 covering over 7 months of imports from US$1.5Bn in March 2022.
• Additionally, IMF's first deputy managing director and acting chair of the executive board, Gita Gopinath, in a statement issued, noted that the authorities are advancing their ambitious climate policy agenda to increase resilience to climate change and green the economy. Ongoing efforts to incorporate climate policy goals in the fiscal process, including by discussing climate change risks in the budget and enhancing public procurement, are welcome.
• The climate policy reforms are expected to help create an enabling environment that mobilises private sector investment in climate-related projects for the sovereign.

(Source: International Monetary Fund)

• S&P Global cut its forecast for China's economic growth this year, underscoring the uneven nature of the country's recovery from the pandemic, spurring calls for further stimulus.
• S&P now expects China to log GDP growth of 5.2% in 2023, down from an earlier estimate of 5.5%. It was the first time a global credit ratings agency has cut China's forecast this year but follows lowered predictions by major investment banks including Goldman Sachs.
• "China's key downside growth risk is that its recovery loses more steam amid weak confidence among consumers and in the housing market," S&P said in a statement on Sunday. In May, property investment slumped further, industrial output and retail sales growth missed forecasts, and youth unemployment hit a record 20.8%. Forecasts for China’s GDP growth this year range between 4.4% and 6.2%.
• S&P said likely measures to bolster the economy could include "easing housing purchasing restrictions and mortgage downpayment requirements, expanding credit and infrastructure financing and, perhaps, fiscal support for consumption."
• China will roll out more stimulus this year, sources involved in policy discussions have said. "We think officials will roll out sufficient policy support to keep the recovery alive but not enough to prevent subdued quarter-on-quarter growth over the rest of the year," said Sheana Yue, a China economist at Capital Economics.

(Source: Reuters)

• High-interest rates will keep a lid on the pace of bank lending in Europe this year and next, with a particular slowdown in growth in Germany as demand for loans tails off, according to a study by consulting firm EY.
• Lending to businesses and households in the 20-nation eurozone will expand 2.1% in 2023 and 1.7% in 2024, muted increases after a 14-year high of 5% in 2022, EY said in its lending forecast published Monday.
• The European Central Bank last year began raising interest rates in response to the highest inflation in decades, with a recent move in its key rate to a 22-year high and signals of more to come. The eurozone meanwhile dipped into recession earlier this year.
• "While the downturn is expected to be very shallow and short-lived, European markets continue to face high inflation and an unprecedented rise in interest rates. As a result, lending volumes are expected to be challenged by a fall in loan demand, at least for the next two years," EY said.

(Source: Reuters)

• A ‘4E’ strategy has been developed by the Trade Board Limited (TBL) to identify and resolve issues surrounding Jamaica’s exports. Trade Administrator and TBL Chief Executive Officer, Dr. Major (Ret’d) Hugh Blake, says this is among the strategies that are being pursued by the agency to support the country’s export growth
• He was speaking at a recent seminar at the University of the West Indies (UWI) Regional Headquarters in St. Andrew, which provided traders with guidelines on how they can ‘Step-Up Export with Trade Agreements’.
• Blake said the 4E strategy is based on four pillars and is intended to educate, enable, expedite, and evaluate. Regarding education, he noted that one of the mandates is to be the chief repository and disseminator of trade-related information, which provides a huge opportunity to educate. In this context, the Jamaica Trade Information Portal (JTIP) is deemed of significant importance, as it is the primary tool used by TBL to inform traders.
• Regarding enabling, Dr. Blake pointed out that this is where the entity assists exporters to convert the knowledge gained through education into value.
• Equally important is TBL’s recognition of the need to keep up with the pace of transactions through efficiency in its processes by using up-to-date technology. To this end, the entity has established key performance indicators (KPIs) related to the time it takes to do business. He added that since the KPIs’ establishment, “the entity is now operating at a 95% efficiency index, simply because we have decided that those things that we have control over, we are setting them as our KPIs”.
• By focusing on education, enablement, expediting processes, and evaluation, this ‘4E’ export strategy empowers traders with the necessary knowledge and tools, streamlines their operations, and ensures constant performance monitoring for ongoing optimization. This ultimately contributes to the nation's economic growth, making it a significant step forward in strengthening Jamaica's position in the global trade landscape.

(Source: JIS news)

• The quantity of paper-based banknotes now in circulation is expected to be gradually reduced over at least the next 12 to 24 months. This is as the Bank of Jamaica (BOJ) undertakes phased disbursement of the new Polymer replacement versions.
• BOJ Governor, Richard Byles, told JIS News that persons will be able to conduct transactions using the existing banknotes alongside the Polymer versions during the period.
• He noted that while the BOJ only accommodates private persons in relation to exchanges, given the special nature of the new notes, the public will be accommodated to exchange old notes for new ones.
• Meanwhile, the BOJ has issued over $11 billion worth of new banknotes, since the exercise commenced on June 6 with disbursements to deposit-taking institutions (DTIs).

(Source: JIS news)

• Brazil's Senate on Wednesday, June 21, approved fiscal rules proposed by President Luiz Inacio Lula da Silva's government, considered vital in preventing a surge in public debt.
• The project received 57 votes in favour and 17 votes against. Since the senators modified the text that Brazilian deputies approved, it will require another round of voting in the lower house.
• The bill is seen as essential in signalling a path toward sustainability of public accounts, particularly after Lula secured congressional approval for boosting social expenditures to assist the poorest people.
• Under the proposal, government expenditures would not be allowed to rise by more than 70% of any increase in revenue, with spending growth also limited to between 0.6% and 2.5% per year above inflation. If budget goals are not met, expenditure growth would be restricted to 50% of revenue increases.
• The proposal's progress in Congress has been praised by S&P, which last week upgraded Brazil's credit rating outlook to Positive.
• The approval of these new fiscal rules by Brazil's Senate, represents a significant step towards fiscal responsibility and sustainability. This move not only helps to prevent a potential increase in public debt but also ensures a balanced growth in government expenditures, thereby fostering economic stability. The positive reception from international credit rating agencies like S&P further underscores the potential benefits of these measures for Brazil's economic outlook.

(Source: Reuters)

• Mexico's annual inflation hit its lowest in more than two years ahead of a monetary policy decision on Thursday, June 22. As anticipated, the central bank maintained the interest rates at a cycle-high of 11.25%, as the consumer price index remains above target.
• In Latin America's second-largest economy, 12-month headline inflation reached 5.18% in the first half of June, data from the National Institute of Statistics and Geography (INEGI) showed, slowing further but far from the central bank's official target of 3%.
• The lowest since March 2021, the level overshot expectations of 5.30% in a Reuters poll of economists. This reinforced the central bank's decision to keep its benchmark interest rate steady at 11.25% when it announced its decision on Thursday.
• A rate cut remains unlikely after the Bank of Mexico, known as Banxico, paused a nearly two-year tightening cycle in May suggesting it might need to maintain rates at current levels for an extended period to bring inflation down to target.
• Capital Economics' deputy chief emerging markets economist, Jason Tuvey, said Banxico would "almost certainly leave its policy rate on hold" after the latest consumer price figures, adding he did not forecast a rate cut this year.
• "The strong labour market and rapid wage growth mean that inflation won't return to Banxico's 2-4% tolerance band until late-2024," Tuvey said. "And with the Fed also continuing to strike a hawkish tone, we think that rate cuts in Mexico will not be delivered until early 2024." INEGI data also showed that annual core inflation, which strips out some volatile food and energy prices and has been a cause of concern for the central bank, slid to 6.91% in the first two weeks of June. Analysts polled by Reuters had expected it to hit 7.02%.

(Source: Reuters)

• U.S. banks are pushing to soften a major regulatory proposal to hike bank capital requirements, worried it could prove too onerous, especially for lenders still reeling from the March banking crisis, according to six people briefed on the matter.
• Bankers are particularly concerned by an aspect of the draft proposal that would apply higher capital charges on non-interest revenue, such as the fees lenders charge on credit cards or investment banking services.
• That capital charge is part of the package agreed upon by the Basel Committee in 2017, but the industry says it overstates the risk for banks that have a high proportion of non-interest income and had hoped U.S. regulators would mitigate its impact.
• Non-interest services income has been a key focus of many lenders' growth strategies in recent years, one industry official noted. American Express, Morgan Stanley and the U.S. units of UBS, Deutsche Bank and Barclays are among banks with a high proportion of non-interest income, according to a 2022 blog by Washington group the Bank Policy Institute.
• While the Basel rules were agreed upon years ago, the U.S. regulations to comply with them are being drafted in the wake of this year's banking crisis in which deposit runs caused Silicon Valley Bank and two other lenders to fail. The proposal is the first major rule led by Fed Vice Chair for Supervision Michael Barr, who has launched a sweeping review of capital rules and is expected to be tough on Wall Street.
• The proposal is also expected to apply stiffer capital rules to smaller lenders with over $100 billion in assets, which would include some that experienced liquidity problems this year, three sources said. Given investor jitters over the health of the industry and the broader economy, bankers say, hiking capital now could backfire, putting pressure on banks and hurting lending.

(Source: Reuters)