• Venezuelans on Sunday voted to elect a governor and other lawmakers for Essequibo, an oil-rich region internationally recognized as part of Guyana but long claimed by Caracas. The vote marked the first time Venezuelans have elected officials for the territory, despite the absence of participation from Essequibo’s 125,000 residents.
• The election, described by Guyanese President Irfaan Ali as “scandalous, false, propagandistic and opportunistic,” has sharply escalated an already tense border dispute. The vote installed a new governor, six deputies to Venezuela’s National Assembly, and seven members to a regional legislative assembly, all for a region over which Venezuela has no administrative control.
• It is unclear how the officials, once elected, plan on running the territory, which Guyana governs. Only 42.63% of eligible voters showed up. Many polling stations across the country were nearly empty, especially in urban centers. The ruling party, PSUV, led by Maduro, still secured a sweeping victory, winning 23 out of 24 governor races.
• The move is the latest flashpoint in a territorial saga that dates back more than a century. It comes over a year after Venezuelan President Nicolás Maduro declared the creation of a 24th state called “Guayana Esequiba” within the disputed territory, following a national referendum supporting the annexation bid.
• Guyana, which has administered the region since gaining independence in 1966, remains on high alert. The country, with a military force of fewer than 5,000 troops, has ramped up defense ties with the United States in response to Venezuela’s aggressive posture.
• Venezuela’s claim hinges on the argument that Essequibo was part of its borders during Spanish colonial times, and it has long rejected the 1899 arbitration ruling that delineated the boundary when Guyana was still a British colony. The stakes in the dispute have intensified since the discovery of large offshore oil reserves in Guyana’s waters, making the country one of the world’s fastest-growing oil producers and a future leader in per capita oil output.
• As the territorial dispute heads back to the international legal stage and the political rhetoric on both sides intensifies, the future of Essequibo remains at the center of a high-stakes geopolitical standoff.

 (Source: Caribbean National Weekly)

• In a tightly contested vote, the U.S. House of Representatives has approved President Donald Trump’s ambitious tax and spending plan, dubbed the ‘big beautiful’ bill, by a thin margin of 215 to 214 votes. With the legislation now moving to the Senate for a decisive final vote, analysts at Fitch Solutions anticipate its passage in the coming weeks, potentially with minimal adjustments.
• The budget incorporates a combination of tax cuts for social security payments, tips and overtime; spending cuts to key areas such as agriculture, education, government oversight, among others; and spending increases in areas such as defence and homeland security.
• According to estimates by the Congressional Budget Office (CBO), the bill would add US$2.3Tn in additional deficits over the next decade, compared to its baseline projections, which would keep the deficit near 7.0% of GDP. However, this is potentially an underestimate given that the Committee For A Responsible Federal Budget estimates that it could add closer to US$2.5Tn. Fitch’s previous long-term forecast anticipated a gradual reduction of the fiscal deficit to 6.1% of GDP over the next decade.
• Bond investors have shown some concern about the prospect of widening deficits and increasing government debt, especially given the likelihood of subdued economic growth in the short term. This anxiety is reflected in the rising yields of 10-year and 30-year bonds, which have increased by 50 basis points (bps) and 100 bps, respectively, since early April, largely due to an increase in the term premium. This suggests that investors are demanding higher compensation to hold longer-term debt.
• In addition, the rise in U.S. yields is also pushing up global bond yields, with many markets seeing a rise in longer-dated yields, particularly Japan. However, part of the recent increase in bond yields can be attributed to slightly improved expectations for the U.S. and global growth. This optimism follows the recent easing of tariff rates, which has led to a decreased probability of a recession in the U.S.

(Source: Fitch Connect)

• U.S. President Donald Trump backed away from his threat to impose 50% tariffs on imports from the European Union (EU) next month, restoring a July 9 deadline to allow for talks between Washington and the 27-nation bloc to produce a deal.
• Trump had said on Friday, May 23, 2025, that he was recommending a 50% tariff effective from June 1, expressing frustration that trade negotiations with the EU were not moving quickly enough. The threat roiled global financial markets and intensified a trade war that has been punctuated by frequent changes in tariff policies toward U.S. trading partners and allies.
• However, the U.S. president's softened stance two days later marked another reprieve in his erratic trade policy, even if the latest whipsawing in decision-making reminded policymakers and investors how quickly circumstances could change.
• In early April, Trump set a 90-day window for trade talks between the EU and the United States, which was to end on July 9. But on Friday, he upended that time frame and said he wasn't interested in a deal at all.
• Talks have been stuck, with Washington demanding unilateral concessions from Brussels to open up to U.S. business while the EU seeks an agreement in which both sides could gain, according to people familiar with the talks.
• The EU already faces 25% U.S. import tariffs on its steel, aluminium and cars and so-called "reciprocal" tariffs of 10% for almost all other goods, a levy that had been due to rise to 20% after Trump's 90-day pause expires in July. The levy could now increase to 50% in a no-deal scenario, which could raise consumer prices on everything from motor vehicles to Italian olive oil and even hurt demand for French luxury handbags.

(Source: Reuters)

• Food and Financial Services conglomerate, Grace Kennedy Group Limited (GK) reported a net profit of $2.22Bn for the three-month period ending March 2025 (3M 2025). The 3M 2025 profit represented a 3.0% year-over-year (YoY) growth, driven by its Food and Financial Services Segment.
• GK’s Revenues amounted to $44.22Bn, reflecting a 4.4% year-over-year increase from $42.35Bn.
• Notably, its food segment - GK Foods outperformed management’s expectations, with revenue and earnings before tax growing by 3.7% and 8.2%, respectively. This growth occurred despite a challenging economic environment marked by declining demand and escalating trade tensions and was supported by its local and international subsidiaries.
• Locally, GK Food’s earnings growth was driven by Grace Foods & Services, including its retail arm Hi-Lo Food Stores and its manufacturing operations, as strong consumer demand boosted product uptake. In international markets, GraceKennedy Foods (USA) LLC delivered strong quarterly results, supported by improved performance of the Grace and La Fe brands. Additionally, Grace Foods UK and Grace Foods Canada also contributed positively to overall growth.
• In the Financial Services segment, earnings before tax increased across all sub-segments, except money services, which saw a 31.1% decline. The Insurance segment posted a strong performance, growing by 22.9%, largely driven by expansion in its motor and property insurance portfolios. Meanwhile, the Banking and Investment segment's performance was fueled by the growth of First Global Bank’s loan portfolio.
• Conversely, Money Services' performance was impacted by reduced remittance flows and transaction volumes in Guyana and Trinidad and Tobago. However, this decline was partially offset by increased market share in Jamaica, its largest remittance market.
• The Money Services segment has been experiencing a decline, driven by reduced remittance volumes. The proposed 5.0% tax on remittance flows, currently under consideration by US House Republicans and President Donald Trump, presents an additional downside risk to the company’s remittance segment. In response, Group CEO Frank James has outlined a cost-reduction strategy aimed at improving transaction efficiency and affordability for Caribbean nationals in the US, particularly through the company’s GK One platform.
• GK’s stock price has declined by 9.3% year-to-date, closing at $71.61 as of Wednesday. At this price, the stock is trading at a price-to-earnings (P/E) ratio of 8.4x, which is lower than the Main Conglomerate Sector’s average of 11.4x.                                                                                                                                                                                                                                                                                        

(Sources: JSE & NCBCM Research)

• Jamaica has exported 4.5Mn barrels of petroleum products since the start of 2024, generating more than US$500Bn in export earnings, largely from sales to Trinidad and Tobago – Science, Energy, Telecommunications and Transport Minister, Hon. Daryl Vaz disclosed. He highlighted a major milestone: a new contract to supply Trinidad and Tobago with both high-sulphur and very-low-sulphur fuel oil, projected to generate J$14Bn (US$90Mn).
• Minister Vas also noted that the deal will further strengthen Jamaica’s energy trade position in the region. Between January and December 2024, the Government, through Petrojam, supplied 11.1Mn barrels of petroleum products to both domestic and export markets.
• “This volume was achieved through a combination of refining and importing finished petroleum products. Crude oil was sourced from key partners, including Barbados, Brazil, Colombia, and Ecuador, ensuring a diversified and stable supply chain,” Minister Vaz told the House.
• Looking ahead, Minister Vaz said Petrojam will focus on optimising operations while advancing cleaner energy solutions over the next three to five years. Plans include the production and supply of ultra-low sulphur diesel (ULSD), expanding access to environmentally friendly fuels, and strengthening the liquefied natural gas (LNG) supply to support energy diversification.
• The strategy supports Jamaica’s climate change agenda that emphasises greater use of solar energy, improved refinery efficiency, and increased production of sustainable biofuels.

(Source: Caribbean National Weekly)

• In a significant boost to the local economy, regional carrier LIAT 2020 is set to double its workforce in Antigua and Barbuda by the end of this year. Tourism Minister Charles Fernandez made this announcement in Parliament on May 19, 2025, highlighting the airline’s plans to ramp up operations alongside the addition of new aircraft to its fleet.
• Currently, LIAT 2020 employs 95 staff at its Antigua base, and the airline projects that this number will increase to approximately 200 by early 2026. This expansion is expected to create new job opportunities and enhance the company's service capabilities in the region.
• Among the current workforce, 80 employees are Antiguan nationals, while the rest represent a diverse mix of talent from Dominica, Trinidad, St. Vincent, Grenada, Montserrat, St. Martin, Ethiopia, and the United Kingdom.
• Fernandez shared the update in response to a query from the Leader of the Opposition, Jamale Pringle, and highlighted the wider employment impact of the airline’s growth. “This number is expected to reach around 200 by the end of this year as more aircraft are added. By the way, this does not include indirect jobs locally. I think it’s about 300, right through the region,” he added.
• He also highlighted the progress being made in pilot training, noting that six Antiguans are currently training to fly LIAT's new jets, with four nearing completion. For the time being, the government plans for these jets to be piloted by Antiguan pilots as well as pilots from other OECS or Caribbean territories.
• Fernandez emphasised the significance of LIAT20 as a homegrown airline in strengthening Antigua and Barbuda's status as a regional aviation hub. The minister also reported strong tourism growth, observing that March 2025 experienced a record number of air arrivals, surpassing the previous high set in March 2024. Overall, arrivals in the first quarter of 2025 increased by 7.5% compared to 2019, which was the country’s best year before the pandemic.

(Source: Antigua Observer)

• Costa Rica’s tourism industry is sounding the alarm as visitor numbers keep sliding, even with a small uptick in April. The Costa Rican Tourism Institute (ICT) reported that 231,678 travellers arrived by air in April 2025, a 4.6% jump from last year’s 221,573. But folks in the business say this bump, tied to Easter Week’s timing, doesn’t tell the whole story. Tourism, which fuels 8% of the country’s economy and supports jobs in places like Guanacaste and Limón, is facing tough times.
• According to the ICT, the first three months of 2025 welcomed a total of 632,000 visitors, reaching 63% of the pre-pandemic visitor numbers from 2019. The increase in April can be attributed in part to Easter Week falling in April this year, unlike in March of 2024. This timing contributed to hotel bookings in beach towns nearly reaching 98%, as reported by the Costa Rican Hotels Chamber.
• However, Tadeo Morales from Movimiento Turismo por Costa Rica (Tourism Movement for Costa Rica) warns it’s not a real recovery. “We’re seeing seasonal spikes, not growth,” he said. Morales noted that the figures from April 2025 are nearly identical to those from April 2023, another month of Easter Week, indicating that the industry remains stagnant.
• Tourism is facing several challenges. The strong colón, which is currently at ₡500 per U.S. dollar, makes Costa Rica more expensive compared to neighbouring countries like Panama or Colombia. Additionally, a new tax on tourism services and a reduction in flights, with some airlines cutting seats by 15-41%, are contributing to the difficulties, according to the National Chamber of Tourism (CANATUR).
• Concerns about safety, such as a U.S. travel advisory warning about crime near San José’s airport, along with health alerts regarding histoplasmosis linked to caving¹, are deterring visitors. North American travellers, who represent Costa Rica’s largest market, experienced a 7.2% decline in February, with the U.S. seeing a drop of 7.3%.
• Additionally, industry reports indicate that fewer people are searching for trips to Costa Rica online, suggesting weaker demand in the future. The ICT’s “Only the Essentials” campaign aims to promote Costa Rica in the U.S. and Canada, but CANATUR’s Shirley Calvo emphasised that more needs to be done, including addressing the exchange rate. As May's low season approaches, businesses are worried about tougher months to come.

^{________________________________________
1}On March 18, 2025, The U.S Embassy alerted citizens of a recent spike in histoplasmosis risks associated with caving activities in Costa Rica. Histoplasmosis is a lung infection caused by a fungus which is primarily found in soil contaminated with bat or bird droppings. Histoplasmosis can lead to serious and potentially life-threatening complications if left untreated.

(Source: Tico Times)

• The outlook for the U.S. economy remains weak despite a temporary cooling of the U.S.-China trade war, a Reuters poll of economists showed, with a debate over the country's fiscal health hanging in the balance.
• A 90-day truce to temporarily slash steep U.S.-China import duties has marginally reduced U.S. recession risks, but the fiscal outlook is worsening ahead of an imminent vote in Congress on President Donald Trump's sweeping tax-cut bill following a sovereign credit rating downgrade from Moody's on Friday.
• Economists in a May 14-21 Reuters poll were unanimous the Trump administration's policies have hurt the economy, with over 55% saying "significantly hurt". However, after big downgrades to their growth and upgrades to inflation forecasts in April, economists kept these broadly unchanged in May.
• The US economy, which contracted 0.3% last quarter largely due to a record surge in imports, is forecast to grow 1.5% this quarter. It would grow just 1.4% this year, a sharp slowdown from last year's 2.8%. Next year, it was forecast to expand 1.5%. The median probability of a U.S. recession over the coming year did, however, decline to 35% from 45% in April.
• Economists barely changed their views on inflation, expected to average above the Fed's 2% target until at least 2027, echoing consumer expectations which are already at a multi-decade high.
• Fed officials have highlighted elevated risks of a resurgence in inflation, primarily due to U.S. tariff policies and appear to be in no hurry to cut rates anytime soon. The federal funds rate has stayed in a 4.25%-4.50% range since the start of this year.

Source: Reuters)

• Buoyant credit and stock markets appear "out of sync" with a world gripped by geopolitical and trade uncertainty, the European Central Bank said on Wednesday.
• The warning came as part of the ECB's twice-yearly Financial Stability Review, a litany of old and new risks ranging from funds depleting their cash buffers to overvalued property markets and high government debt.
• In the latest edition, the ECB said investors might be underestimating the risk that the economy performs worse than expected, trade tensions escalate or an expected easing of monetary policy fails to materialise. "Despite the drawdowns, equity valuations remain high while credit spreads still appear out of sync with underlying credit risk," ECB vice-president Luis de Guindos said in his foreword.
• The ECB also described tariffs as "major downside risk", estimating that an increase of one standard deviation in an index measuring trade policy uncertainty lowered the median growth forecast by 0.15 percentage points after four quarters. Such a surge in uncertainty also pushed down banks' share prices by 10.4% after six months and increased their cost of borrowing on the bond market by 7 basis points, the ECB said.
• Among other risks, the ECB listed cyber attacks, concentrated investments in private markets and growing - if still tenuous - linkages between cryptocurrencies and traditional finance.

(Source: Reuters)

• Following its Monetary Policy Committee (MPC) meetings on May 16 and 19, 2025, the Bank of Jamaica (BOJ) announced a 25 basis points cut to the policy rate to 5.75%. This cut follows two rate pauses at 6.0% in February and March of 2025. The BOJ’s rate cut decision was influenced by a favourable inflation outlook and expectations of moderate improvements in the economy.
• The BOJ’s decision incorporated the fact that annual headline inflation for April 2025 of 5.3%¹ was in line with the outturn for April 2024. The stable and relatively low inflation primarily reflected the non-recurrence of price increases for regulated items (such as bus and taxi fares), which offset higher food inflation. Importantly, core inflation, which excludes the volatile prices of agricultural food products and fuel, was 4.4%, remaining below the upper limit of the 4.0% to 6.0% target since July 2023.  Moreover, the exchange rate, imported inflation, and the private sector’s expectations of future inflation have been fairly stable.
• On the economic front, the BOJ forecasted moderate improvements to the real economy “following the effects of recent shocks”. Real gross domestic product (GDP) is projected to recover in 2025, largely due to normalisation in the mining, tourism, and construction sectors. In this context, employment levels remain high, even as anecdotal data suggest that wage pressures are moderating. The central bank also noted that the current account of Jamaica’s balance of payments is projected to remain in surplus over the near term, and that international reserves are healthy and projected to improve further.
• Notwithstanding the positive inflation and economic signs, the central bank noted that inflation could exceed projections if geopolitical tensions escalate further, potentially disrupting international supply chains. Conversely, inflation may fall below expectations if international commodity prices decline more than anticipated or if demand conditions weaken. At the same time, the central bank highlighted uncertainty from the fast-evolving policies in the United States (US) and the global economy, and their potential implications for the domestic economic outlook.
• That said, the MPC communicated that it would be prepared to adjust the stance of monetary policy if the above-noted risks crystallise and result in an upward deviation from the inflation target.

________________________________
¹According to the Statistical Institute of Jamaica (STATIN)

(Sources: BOJ & NCBCM Research)