NCB Capital Markets Ltd.

General

Amid geopolitical disruptions that pushed Brent crude prices to roughly USD90/bbl, driven by shipping disruptions in the Strait of Hormuz and attacks on energy infrastructure related to the U.S.–Iran conflict, BMI analysts assessed the potential macroeconomic impact of rising oil prices on major Latin American economies.
The analysis used a model to estimate the effects of an oil price shock on Brazil, Chile, Colombia, Mexico, and Peru, using historical data from November 2007 to December 2025, while excluding the February 2020, June 2021 COVID-19 period due to the exceptional nature of that shock. The research showed that the impact from a short-lived spike in oil prices on major economies in Latin America would be relatively modest.
The study models four scenarios covering March-December 2026, each assuming different paths for Brent crude prices. In three scenarios, oil prices initially rise above baseline levels before gradually falling back toward or below early-2026 levels, while risk appetite follows a similar trajectory as financial conditions stabilize.
In the fourth scenario, oil prices remain elevated for a longer period, although the assumed level is still sustainable for the global economy, allowing risk appetite to gradually improve over the course of the year despite tighter financial conditions.
Across most scenarios, except the most extreme case, the cumulative impact on real GDP remains relatively limited, with output losses generally below 1 percentage point relative to baseline projections.
Mexico is estimated to be the most exposed economy among those analysed, reflecting its close economic integration with the United States and its large manufacturing sector, which increases sensitivity to energy-driven cost pressures. The short-lived nature of the oil price spike also limits potential production gains for oil exporters, meaning Brazil and Colombia are unlikely to see meaningful output increases despite higher prices.
The study does not explicitly model fiscal or monetary policy responses but suggests that weaker macroeconomic fundamentals and more open financial accounts in Brazil, Colombia, and Mexico may constrain policymakers’ ability to deploy stimulus, relative to Chile and Peru.
The model is intended to provide a reasonable estimate of the growth impact of an oil price shock, but it does not capture potential policy responses, shifts in policymaker credibility, or non-linear economic effects that could emerge under extreme shock scenarios.

(Source: BMI, A Fitch Solutions Company)

The Jamaican government tabled its FY2026/2027 budget that will see the fiscal deficit expand to an estimated 5.5% of GDP as it continues to mobilise resources to recover and rebuild following Hurricane Melissa. On February 12, 2026, Minister of Finance and the Public Service Hon. Fayval Williams tabled the FY2026/2027 ‘Melissa Budget’, which includes both increases to expenditures and revenues in response to the significant structural damage to Jamaica from Hurricane Melissa.
The Planning Institute of Jamaica (PIOJ) estimated in March that Jamaica suffered US$12.2Bn of damage (56.7% of GDP) from Hurricane Melissa, up from the previous estimate of US$8.8Bn, necessitating increased government spending to rebuild infrastructure, support the domestic economy, and guard against future storms. To facilitate this, the government suspended its fiscal rule on December 2, 2025, for one year to enable the increased fiscal deficit.
The tabled budget includes the first tax increase in nearly a decade to enable recovery efforts while supporting fiscal sustainability. Novel revenue provisions include new consumption taxes on digital services imports, special vice consumption taxes on alcohol, sugary drinks, and cigarettes, an increase to the environmental levy, changes to motor vehicle duty concessions for public officials and an increase in the consumption tax for tourism (effective April 1, 2027).
The government projects these provisions will generate an additional J$29.4Bn for FY2026/2027 and J$15.6Bn for FY2027/2028. Given the focus on taxing goods with inelastic demand and investments in tax collection, BMI remains upbeat on the government's revenue estimates. Furthermore, fiscal performance from April-December 2025 was solid, with tax revenues just below their original budget while surpassing revised estimates, alongside strong non-tax revenue.
Additionally, the budget includes a near doubling of capital expenditure relative to last fiscal, with J$99.7Bn budgeted for FY2026/2027, including a J$30Bn contingency for Hurricane Melissa reconstruction. However, while such spending is needed to address storm damage and chronic underfunding in public investment, ongoing execution challenges continue to plague Jamaica, and BMI analysts expect overall capital expenditures to fall below government estimates. Capital expenditures from April to December 2025 were 37.2% below budget due to slower-than-anticipated project execution.
Overall, despite Jamaica’s widening budgeted deficits and increased borrowing, BMI sees the proposed budget as sustainable. Increased borrowing will push back the government’s goal of reducing debt below 60% to 2032 (originally set for FY2027/2028); however, the debt trajectory is expected to resume its downward trend in FY2026/2027. This optimism is underpinned by the country’s robust fiscal buffers, including a disaster bond that was fully paid out following Melissa and previously budgeted for disaster funding by the government, and strong international support for the rebuilding process. With fiscal policy expected to provide the lion’s share of economic stimulus in the face of a severely damaged economy, a sustainable fiscal outlook supports the recovery outlook.

(Source: BMI, A Fitch Solutions Company)

Costa Rica’s tourism sector keeps shifting as travelers look for deeper connections with local life, moving past basic stays to hands-on involvement in food, traditions, and self-care. This push reflects a broader change where people want trips that feel real and tied to the places they explore.
Last year marked a high point for the industry. Foreign exchange from tourism hit $5.434Bn, up $682Mn from 2023. That growth supported 549,048 direct and indirect jobs, making up roughly 25 percent of the workforce. These numbers show how tourism drives the economy, but they also highlight the need to adapt as preferences evolve.
This year, the picture looks different. Through the first half of 2025, air arrivals dropped 2.8 percent to 1,489,008 visitors compared to the same period in 2024. Revenue for the first quarter fell to $1.773Bn, a $60Mn decrease from last year. Industry watchers point to higher costs and tougher competition from nearby countries as factors in the slowdown. Still, officials predict a rebound, with air visitation expected to rise 1.7 percent by year’s end, in line with the national tourism plan.
Sustainability plays a big role in these changes. Travelers now prioritise eco-friendly options, from low-impact lodging to activities that support conservation. Technology helps too, with apps and online tools making it easier to book custom trips. Authentic encounters top the list, as people seek out local ways of living rather than standard tours. Wellness stands out as a growing draw..
However, experts see challenges ahead. Yadyra Simón, head of the Costa Rican Association of Tourism Professionals, notes that while markets like wellness, sports, and culture expand, rivalry from other nations intensifies. Countries with similar offerings but lower prices put pressure on Costa Rica to rethink its rates and strategies. She stresses the value of highlighting Blue Zones to stand out in global markets where demand for such trips rises.
Despite the early dips this year, signs point to recovery. New flight routes from the U.S. and Europe could boost numbers in the second half. Colombian visitors, for one, grew 6.4 percent in the first part of 2025. Safety updates and a focus on sustainable practices aim to rebuild confidence amid concerns over costs and other issues.

(Source: Tico Times)

First Rock Real Estate Investment Limited and its subsidiary FCH Jamaica Developers Limited, in a company release on the Jamaica Stock Exchange (JSE), announced that it had fully repaid all of its obligations to Sagicor Bank Jamaica Limited through a Corporate Note structured and arranged by Mayberry Investments Limited. The repayment on September 15, 2025, marks the formal exit from receivership for the Hambani real estate project at Bamboo Avenue. Chairman of First Rock Group Ryan Reid said Mayberry Investments has agreed to a payout of US$10Mn, which should settle the outstanding obligations to Sagicor.
The full size of the financing package was not announced; however, the ‘first of its kind’ luxury residential development is now expected to be completed in the coming months. Mayberry also confirmed the deal, but its market filing was also absent specific details regarding the secured note and financing plan.
The long-delayed project consists of 12 four-bedroom and five-bedroom townhouses, priced up to US$2Mn. Sagicor Bank Jamaica announced in June that it had placed land lots for Hambani Estate units into receivership. First Rock subsequently noted in a market filing that it was then working with an unnamed entity, now revealed as Mayberry, to refinance the project. At market close on Monday, September 22, 2025, FirstRock’s JMD share price was J$10.00, down 0.40% since the start of the year. At its current price, the company trades at a P/B of 0.09x, which is below the Main Market Real Estate Sector Average of 0.48x.

(Sources: The JSE, the Jamaica Gleaner, & NCBCM Research)