• As summer travel ramps up, new data and airline insights suggest a clear shift in where Canadians are choosing to go, citing an increase in destinations other than the U.S.
• Airlines have adjusted their networks to match the trend, while Toronto Pearson International Airport braces for one of its busiest seasons on record as more travellers head to Europe and domestic destinations. “Our summer travel is now in full swing at Toronto Pearson,” said Sean Davidson, spokesperson for the airport. “We normally see demand for European destinations soar in the summer, and that’s true again this year.”
• While Davidson emphasised that airlines are ultimately responsible for scheduling and routing decisions, carriers are responding to demand. In a statement to Global News, WestJet confirmed it had reduced some Canada-U.S. routes. Instead, the airline is boosting service within Canada, Europe, and to sun destinations.
• Other companies, such as Porter Airlines and Air Canada, have also made travel and capacity shifts. Air Canada launched new routes to Prague and is offering flights from Toronto to Rio de Janeiro, Cartagena, and Guadalajara.
• The shift toward Europe and domestic travel appears to be part of a larger rethinking of how travellers are choosing where to go. While the United States remains a key market, data is pointing to how its cultural and political volatility may be causing some travellers to look elsewhere. With airlines adapting their networks and millions of passengers moving through airports like Pearson, one thing is clear: travellers are broadening their horizons.

(Source: Global News)

• For many countries, the reprieve from President Donald Trump’s eye-watering tariffs, which were implemented on April 2, 2025, and temporarily reduced to 10% a week later, is soon set to come to an end. The 90-day pause, during which the Trump Administration pledged to negotiate deals with trading partners, was set to expire on Wednesday, July 9, but the White House confirmed on Monday, July 7^th, that it would push back the start of hiked tariffs to August 1^st.
• Trump also began sharing “letters” to multiple heads of state on Truth Social, alerting them of the tariff rates their countries will face next month if they do not reach deals before then. While Trump’s trade adviser Peter Navarro said in April that the Administration would deliver “90 deals in 90 days,” officials lowered expectations in recent days. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick recently said they expected about 12 trade deals.
• Notably, Trump has so far reached three deals, with the U.K., China, and Vietnam, but on Monday sent out new tariff rates for more than a dozen countries (see Table 1). “Our relationship has been, unfortunately, far from Reciprocal,” Trump wrote in the letters, which followed a standardised format. “We invite you to participate in the extraordinary Economy of the United States,” he wrote, “but only with more balanced, and fair, TRADE.”
• Some analysts on Wall Street were optimistic that the return of uncertainty may not weigh as heavily on stocks this time around. “Our base case remains that the uncertainty around tariffs won’t be enough on its own to bring the US economy to a crashing halt,” analysts with Capital Economics research group and consultancy wrote in a note to clients. “If so, it’s unlikely to be enough to dampen investors’ enthusiasm for US equities.”
• Yet the analysts also acknowledged that renewed chaos could prove a setback for officials at the Federal Reserve, who continue to insist on keeping interest rates high, despite repeated demands from Trump for a rate cut. Rates have remained elevated in anticipation of worsening inflation from  the import taxes. It’s something that will continue to make it expensive for the federal government, not to mention consumers and businesses, to borrow money, the analysts said.

(Sources: Time & NBC News)

• The Canadian dollar edged higher against its U.S. counterpart on Tuesday, July 8, 2025, but was holding near an earlier eight-day low as the prospect of additional U.S. tariffs kept risk appetite in check.
• The loonie was trading 0.1% higher at 1.3675 per U.S. dollar, or 73.13 U.S. cents, after touching its weakest intraday level since June 30 at 1.3694. "There's a little bit of steam (coming) out of the loonie, primarily driven by risk aversion as these tariffs have basically come back to the forefront," said Rahim Madhavji, president at KnightsbridgeFX.com.
• U.S. President Donald Trump said he will announce a 50% tariff on imported copper on Tuesday, an effort to boost U.S. production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods. Canada is a major producer of copper and other commodities such as oil. The country has already been hit with hefty U.S. tariffs on autos, steel and aluminium, but has escaped sweeping U.S. duties imposed in April. Canadian Prime Minister Mark Carney and Trump have agreed to reach some form of a trade deal by July 21.
• Despite the looming concerns around the effects of tariffs on Canada’s economic growth, Canadian economic activity expanded in June at the fastest pace in four months, but price increases also accelerated, Ivey Purchasing Managers Index (PMI) data showed. The seasonally adjusted index rose to 53.3 last month from 48.9 in May, posting its highest level since February.

(Source: Reuters)

• Brazil plans to return to international debt markets later this year after successful issuances in the first half, Treasury Secretary Rogerio Ceron said in an interview last week, adding that a new sustainable bond is also under consideration.
• Latin America's largest economy raised $2.5Bn in dollar-denominated sovereign bonds in February and $2.75Bn in June. The last time Brazil conducted more than two sovereign bond sales abroad in a single year was in 2014.
• Ceron acknowledged investor concerns over the country's rising public debt but noted that similar trends are playing out across major economies. Amid a global reallocation of assets driven by shifts in U.S. economic policy, he said Brazil stands out due to its high share of local-currency debt and elevated real interest rates, an increasingly attractive combination as inflation eases.
• These factors, he said, have fueled strong capital inflows, reflected in a currency that has gained more than 10.0% this year, rising corporate bond issuances, more foreign participation in public debt markets and gains in local equities.
• "There's a significant interest rate differential and a macro environment that makes sharp currency depreciation unlikely, since capital is flowing in. So, it's almost a perfect window for non-resident investors to allocate funds here and benefit," Ceron said. With debt rollovers running at about 140.0% of maturities, well above the historical average around 100.0%, Brazil's Treasury has ramped up domestic issuance, mainly to capitalise on what Ceron called "a great moment" in the market, while also preparing for potential volatility ahead of the 2026 election.
• Of note, amid a dispute between the government and Congress over a decree raising the IOF^[1] tax levied on some financial transactions, the secretary defended the measure as essential to meeting next year's fiscal target. He also stressed the need for congressional approval of an executive measure to harmonize income tax rates on financial investments and impose a 5% levy on currently tax-exempt debt securities.

(Source: Reuters)

^[1] The Tax on Financial Operations (IOF), is a levy imposed on individuals and legal entities for various financial transactions conducted within Brazil. The IOF rate varies depending on the specific transaction, and its payment is mandatory.

• Professor Roger Hosein believes the UNC Government’s first Mid-Year Budget Review is a strategic move to stabilise Trinidad and Tobago’s struggling economy. Finance Minister Davendranath Tancoo’s review, presented on June 18, added $3.14Bn in spending to the original $59.7Bn budget, pushing the fiscal deficit to $9.67Bn.  Hosein describes the review as a necessary fiscal triage, aimed at closing financing gaps, maintaining administrative order, and preserving space for deeper reforms in the full 2026 budget. While it doesn’t introduce broad supply-side reforms, references to export-led growth, FX stabilisation, and tax administration changes suggest that bolder measures may follow.
• However, recent economic reports painted a worsening picture of the economy. Earlier projections, especially the April 2023 edition, anticipated a solid recovery, with real GDP reaching 89.5% in 2025. This expected level of economic activity declined by April 2024, when projections were cut to 85.7% for 2025, signalling weaker-than-expected growth. The April 2025 database worsened the picture further, with the 2025 estimate downgraded again to 84.2 %. The updated figures now show real GDP staying well below 2014 levels through 2027, effectively marking just over a decade of lost growth. These successive revisions reveal that previous fiscal assumptions were based on outdated optimism. The April 2025 WEO reshaped the economic baseline and highlighted deeper structural stagnation than previously acknowledged.”
• The Labour Force Survey for Q4 2024 by the Central Statistical Office (CSO) also showed that the total labour force fell from 602,800 to 595,700, a drop of 7,100 persons. Employment declined from 578,800 to 566,200, reflecting a net job loss of 12,600. Unemployment increased by 5,500, rising from 24,000 to 29,500, which pushed the unemployment rate up from 3.98% to 4.95%.
• On the external front, he noted that net official reserves plunged from US$9.9Bn to US$5.6Bn, while external debt more than doubled from US$2.2Bn to US$5.6Bn. The non-energy fiscal deficit worsened drastically, moving from $12.5Bn to over $26.8Bn. Unfortunately, the food import bill remains high, and tourism arrivals have collapsed from 519,000 to 336,100, indicating lost earnings in the services sector.
• Trinidad and Tobago currently lags regional peers Jamaica and Barbados. “Over the last decade, Jamaica has successfully reduced its public debt, firmly anchored inflation and inflation expectations, and strengthened its external position” (IMF). Jamaica’s real GDP growth improved from 0.9% in FY 2013/2014 to an estimated 2.0% in FY2023/2024. Overall, the IMF’s outlook points to growth settling at its potential rate once the FY2025/26 post Hurricane recovery is complete, with projected growth of 2.1% in 2025.
• Barbados’ real GDP growth is estimated at 4.0% for FY2023/2024, according to the Central Bank of Barbados, up from 0.7% in FY 2013/14. Growth was driven by strong performances in business services, tourism, construction, and retail trade. Additionally, the implementation of the home-grown Barbados Economic Recovery and Transformation (BERT 2022) plan has remained strong and the broad objectives of the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) arrangements have been achieved. Growth is expected to reach 2.7% in 2025, supported by construction of tourism-related projects and government investment (IMF).

(Sources: Trinidad and Tobago Guardian, IMF and NCBMBTT)

• Moody’s assigned a Ba3 rating with a positive outlook to the proposed issuance of up to US$385.0Mn in senior secured notes due 2035 by Montego Bay Airport Revenue Finance Limited (MoAir), a special-purpose vehicle. The outlook mirrors that of the Government of Jamaica, with the rating based on preliminary documentation that Moody’s does not expect to materially change before issuance.
• The rating reflects Sangster International Airport’s critical role in Jamaica’s tourism sector, its diversified airline mix, and the relatively strong financial performance of the project compared to regional peers.
• Credit quality is supported by structural protections including offshore cash flow management, limited foreign exchange risk, and a diversified passenger base across the U.S., Canada, and the U.K. Moody’s base case, which assumes modest 1% passenger growth from 2026 onward, still produces an average debt service coverage ratio (DSCR) of 1.9x, with a minimum of 1.6x — offering a solid buffer even under stress scenarios.
• Key risks include refinancing risk from the bullet maturity one year after the concession’s expiry in 2034, though this is partly mitigated by revenue protections and expectations of concession renewal.
• There is also transfer risk, as the operator collects revenue before remitting MoAir’s share to offshore accounts, though the government has committed to top up any shortfalls. Additionally, the airport’s location in the hurricane belt exposes it to climate-related disruptions that could affect passenger volumes and operations.
• This proposed transaction follows a similar securitisation for GOJ’s portion of revenue flows from NMIA through, Special Purpose Vehicle, Kingston Airport Revenue Finance Limited 6.75% 2036 bond, which was issued on September 17, 2024. The transaction raised US$480Mn. The proceeds from the note issue was used to fund a revenue account and for KingAir to make a one-time payment to the Government of Jamaica for the repayment of outstanding debt obligations and the financing of certain infrastructure projects related to the modernisation and rehabilitation of roads. Additionally, the GOJ 7.625% 2025 Senior Unsecured Notes matures today, July 9, 2025.

 (Sources: Moody’s Investor Service and NCBCM)

• Deposit-taking institutions (DTIs) recorded a 19.2% decline in pre-tax profits to J$42.2Bn in 2024, a sharp reversal from the 16.1% growth in the previous year, as modest growth of 5.7% in operating income was fully offset by a similar rise in operating expenses.
• The increase in income was primarily driven by a 14.9% rise in interest income from loans, advances and discounts, but this was eroded by higher interest expenses on deposits—reflecting the tighter liquidity environment, more competitive deposit rates—as well as increased provisioning for loan and security losses amid ongoing credit and interest rate uncertainty.
• As a result of the weaker earnings performance, key profitability indicators deteriorated, with return on equity falling by 5.3 percentage points to 11.9% and return on assets declining by 0.7 percentage points to 1.5%, mainly due to a significant drop in net profit margins.
• Despite the downturn in profitability, the DTI sector remained adequately capitalized and solvent at end-2024, as the capital adequacy ratio held steady at 14.6, with all institutions maintaining capital levels above the statutory minimum of 10.0%, supported by Tier 1 capital injections, net issuances, reserve transfers and proportionate growth in risk-weighted assets.
• Liquidity positions remained strong but softened relative to the prior year, as the JMD-Only Liquidity Coverage Ratio declined by 14.1% to 176.4%, reflecting stronger growth in net cash outflows compared to high-quality liquid asset holdings, with fair value losses on these assets also linked to the persistently high interest rate environment.

(Source: Bank of Jamaica)

• The Jamaican economy grew by 1.1% in the first quarter of 2025 when compared to Q1 2024, according to data from the Statistical Institute of Jamaica, (STATIN).
• Increased output in both the Goods-Producing and Services industries, which expanded by 2.0% and 0.8%, respectively, were the primary drivers of the expansion in economic output. Growth in the Goods-Producing sector was broad-based. The Agriculture, Forestry and Fishing industry recorded the strongest increase at 3.1%, followed by Manufacturing (1.7%).
• The Construction industry rose by 1.4%, while Mining and Quarrying expanded by 0.7%. Within the Services sector, most industries experienced growth, although there were declines in Wholesale and Retail Trade; Repair and Installation of Machinery (-0.8%), and Real Estate and Business Activities, which fell by 0.4%.
• Jamaica has adopted the United Nations’ 2008 System of National Accounts (SNA 2008) and the Jamaica Industrial Classification 2016 (JIC 2016). The overhaul rebases constant-price GDP calculations to 2015 from 2007 and incorporates updated data sources, including the 2017 Household Expenditure Survey (HES), to better capture household spending and informal sector activity.
• According to STATIN, the methodological updates resulted in an average increase of 7.8% in historical GDP levels between 2015 and 2023. Overall, the changes are intended to provide a more accurate reflection of Jamaica’s economic structure and improve the comparability of its data with over 100 countries now using the SNA 2008 framework. The International Monetary Fund (IMF) has validated Jamaica’s transition, noting improved cross-country comparability. STATIN said a full National Income and Product Report for 2023 will be published by July 31, 2025.
• Looking ahead, the Bank of Jamaica (BOJ) projects that the economy will continue to expand throughout the remainder of FY2025/26. Preliminary indicators point to growth in the June 2025 quarter, supported by stronger activity in tourism and its related services. For the full fiscal year, real GDP is forecasted to recover within the range of 1.0 to 3.0%, largely reflecting gains in the Mining, Tourism, and Construction sectors. The BOJ expects this positive trend to continue into FY2026/27, in line with its previous economic outlook.

(Sources: STATIN & BOJ)

• Hanover is rapidly emerging as Jamaica’s leading tourism parish, driven by several major developments, according to Tourism Minister, Hon. Edmund Bartlett. “You are going to have, `among other things, the first casino tourism facility in the country right here in your parish, in Green Island. In short order, you will have 2,000 rooms at Green Island with just one hotel. Then we are going to build the Viva Wyndham for another 1,000 rooms at Rhodes Hall, and Palladium just outside of Lucea is now expanding with 998 more luxury rooms,” Mr. Bartlett outlined.
• Minister Bartlett also highlighted that the parish has pioneered tourism worker housing. “Hanover has led the way, because you have the first hotel with rooms for the workers of the tourism industry – 500 rooms available in the Princess facility, and 600 houses are going to be built now by Palladium for the workers of the tourism industry,” he stated.
• Regarding cruise tourism, the Minister noted that Hanover is being considered for future port development. “Although we don’t have a cruise port yet in Lucea, Jamaica Vacations Limited (JamVac) Executive Director, Joy Roberts, is part of the team that is looking at how we can increase the number of ports of call across Jamaica. “Very soon, Jamaica could be an itinerary for a cruise ship… from Lucea, to Negril, to Black River, to Port Royal, to Port Antonio, to Ocho Rios, to Falmouth, and back to Montego Bay,” he shared.
• Additionally, he reaffirmed the Government’s commitment to inclusive tourism growth. “The future of tourism in Jamaica must include every parish, every town, and every citizen, not just those in the resort belts but also those communities that are rich with character, culture and commitment this is transformation,” Minister Bartlett declared.

(Source: JIS)

• Barbados’ financial system remains robust and well-capitalised, still it faces mounting threats from global economic uncertainty, rising protectionism and climate risks, the Central Bank warned in its latest Financial Stability Report. Deputy Governor Alwyn Jordan launched the 2024 Financial Stability Report (FSR) during a roundtable panel of financial experts.
• In an overview of the report’s findings, Jordan disclosed that the island’s economic expansion continued in 2024, supported by robust credit growth and stable household and corporate balance sheets. But the deputy governor warned of pending threats to the country’s financial sector.
• “Looking ahead, global economic uncertainty, rising protectionism, and elevated interest rates may pose increased financial stability risks, particularly if they lead to weaker external demand, inflationary pressures, and tighter financing conditions,” he cautioned.
• “Stress testing confirms that the financial system remains sound under baseline conditions but highlights material vulnerabilities in scenarios involving severe external shocks, including tariff escalations and heightened geopolitical instability.
• The Central Bank of Barbados’ latest financial stability assessment highlights a generally resilient financial sector, though with emerging vulnerabilities. Liquidity stress tests show a slight decline in resilience compared to 2023, while capital buffers remain well above regulatory thresholds and credit quality continues to improve. However, profitability has softened due to higher operating costs and fewer write-backs of provisions.
• The Bank flagged growing systemic risks from climate change, particularly from extreme weather events affecting tourism and real estate, and noted rising cyber threats amid accelerating digitalisation. In response, regulators are prioritising enhanced climate risk mapping, improved cyber risk oversight, stronger data collection, and continued monitoring of sectoral exposures, especially in real estate lending, to safeguard overall financial stability.

(Source: Barbados Today)