• Japan's exports posted the biggest monthly drop in about four years in July, government data showed on Wednesday, as the impact of U.S. tariffs intensified. The falloff is raising concerns about the outlook for the export-reliant economy.
• Total exports from the world's fourth-largest economy dropped 2.6% year-on-year in July in value terms, the biggest monthly drop since February 2021, when exports fell 4.5%. It was larger than a median market forecast for a 2.1% decrease and marks a third straight month of decline after a 0.5% drop in June.
• Despite the plunge in the value of exports, shipment volumes have so far held up as Japanese exporters have avoided major price hikes, said Takeshi Minami, chief economist at Norinchukin Research Institute.
• Exports to the United States in July fell 10.1% from a year earlier, with automobiles slumping 28.4% and automotive components down 17.4%. However, automobile exports fell just 3.2% in volume terms, suggesting Japanese automakers' price cuts and efforts to absorb additional tariffs have partly shielded shipments.
• The United States imposed 25% tariffs on automobiles and auto parts in April and threatened 25% levies on most of Japan's other goods. It later struck a trade deal on July 23 that lowered tariffs to 15% in exchange for a U.S.-bound $550 billion Japanese investment package. The agreed tariff rate on automobiles, Japan's largest export sector, is still far higher than the original 2.5%, exerting pressure on major automakers and parts suppliers. Exports to other regions were also weak. Those to China were down 3.5%, the data showed.
• Total imports in July dropped 7.5% from a year earlier, compared with market forecasts for a 10.4% fall. As a result, Japan ran a deficit of 117.5 billion yen ($795.4 million) in July, compared with a forecast of a 196.2 billion yen surplus. The outcome follows unexpectedly strong growth in gross domestic product (GDP) in the April-June quarter, separate data showed last week, fuelled by surprisingly resilient exports and capital expenditure

(Source: Reuters)

• Impacted by elevated costs, Seprod Limited (SEPROD) saw its earnings contract by 37.0% for the quarter ended June 30, 2025 (Q2 2025). The falloff in earnings occurred despite robust growth in the regional manufacturer and distributor’s topline.
• Revenue came in at J$37.8Bn, a 26.0% year-over-year increase from Q2 2024, powered by the full-period consolidation of Caribbean Producers Jamaica Limited (CPJ) and solid performance across core categories.
• Direct costs also grew in tandem, up 22.6%; however, this was lower than the increase in revenues. Consequently, the gross margins increased to 27.0% from 25.0% in Q2 2024, reflecting stronger margins from its product mix and the full integration of CPJ.
• However, flow through to the bottom line was eroded by markedly higher operating and finance costs. Operating and finance costs climbed sharply, rising by 53.5% and 28.6%, respectively. The increase in operating expenses reflects the larger operational footprint post the CPJ acquisition, including higher staffing costs, expanded logistics requirements, and increased administrative overheads associated with managing a more complex, multi-jurisdictional business. Additional debt incurred to finance the acquisitions of CPJ likely contributed to the increase in finance costs.
• The net effect was weaker operating profits, which fell by 4.0% to J$2.21Bn. Consequently, operating profit margin fell to 5.9% from 7.7%.
• Given elevated operating and finance expenses in both the first and second quarters, earnings for the six-month of 2025 fell 33.0% reflecting inorganic increases from consolidation expenses, which inflated operating expenses (opex) in Q2. The higher costs stem from the acquisition and consolidation of beverage and packaged meats company, CPJ.
• Seprod’s stock price has declined by 8.8% year-to-date, closing at $79.47 as at Tuesday. At this price, the stock trades at a price-to-earnings (P/E) ratio of 32.98x, which is higher than the Main Market Distribution and Manufacturing Sector’s average of 17.1x.

(Sources: Seprod Limited & NCBCM Research)

• The Planning Institute of Jamaica (PIOJ) is reporting that the economy grew by an estimated 1.4% year on year during the April to June 2025 quarter. Speaking at PIOJ’s hybrid quarterly press briefing on Tuesday (August 19), Director General, Dr. Wayne Henry, said the outturn for the review quarter largely reflected continued growth in most industries.
• The Goods Producing Industry grew by 3.8%, driven by growth in three of four industries, while the Services Industry increased at a much slower - 0.5%.
• The Agriculture, Forestry and Fishing industry grew by 9.8%, reflecting the impact of more favourable weather conditions, which contributed to an increase in output per hectare and an 11.0% expansion in domestic crops reaped.
• “Agriculture, Forestry and Fishing and the Accommodation and Food Service industries – two industries that were hardest hit by the weather-related disruptions of 2024 – were key drivers of this positive performance. Both industries have entered a new growth phase with current output levels surpassing their pre-hurricane Beryl output levels,” Dr. Henry said.
• Henry also noted that growth in the economies of Jamaica’s major trading partners, which supported external demand, was also among the factors that influenced performance during the review quarter. An increase in the labour force of 24,200 people and higher levels of consumer and business confidence, which drove domestic demand, also contributed to the expansion in economic activity.
• The performance of the agricultural industry stemmed from a 14.1% growth in the output of other agricultural crops, with increased production being recorded in all nine crop groups. Based on current output levels, the agricultural industry has fully recovered from the shock of Hurricane Beryl and is now in a new growth phase, according to the PIOJ.
• However, real Value Added for the Mining & Quarrying industry decreased by 3.5%, reflecting declines in both alumina (5.5%) and crude bauxite production (1.5%). The decline in output from the sector reflects reduced demand from a major overseas purchaser. Meanwhile, output of the Manufacturing industry was estimated to have grown by 1.4%.
• Though the performance of the services sector was more subdued, growth of 1.6% was recorded for the Construction industry, reflecting expansion in both the Building Construction and Other Construction components. The sector benefited from a 745.9% increase in housing starts by the National Housing Trust, driven by 2,077 new starts at the Longville Park housing scheme and a higher work-in-progress supported by the strong increase in housing starts reported in the previous quarter.

(Source: JIS)

• ExxonMobil’s oil production offshore Guyana has now surpassed 650 million barrels since first oil in December 2019, with output on track to expand sharply before the end of this year. The first three producing projects, known as Liza Phase 1, Liza Phase 2, and Payara, have each achieved major milestones.
• Liza 1 has pumped more than 250 million barrels, Liza 2 has exceeded 270 million barrels, and Payara has already delivered over 135 million barrels. Combined, they account for more than 650 million barrels extracted in less than six years, underscoring Guyana’s rapid rise as a major oil producer. Production is currently averaging around 660,000 barrels per day (bpd) from the three projects.
• With the start-up of the Yellowtail project this month, output is set to climb quickly. The government has projected that in the final quarter of 2025, average daily production will be about 786,000 barrels, with full ramp-up expected by year-end based on Exxon’s track record of rapid scale-ups.
• The upcoming Uaru and Whiptail projects are slated to add 250,000 bpd each. That would lift Guyana’s production capacity above 1.4 million bpd, placing it far ahead of traditional per-capita leaders like Kuwait and Qatar. By that stage, Guyana will stand as the world’s largest per capita producer of crude oil by a wide margin.
• The financial impact is already clear. Guyana has received more than US$1Bn in oil revenue so far this year, with total inflows expected to reach about US$2.5Bn from royalties and crude sales in 2025. By the end of the decade, as cost recovery eases and production continues to expand, annual government earnings are expected to swell toward US$10Bn.
• Oil money has already changed the development arena thanks to the prudent management of the government. With these funds, the government has made tuition at the University of Guyana free and financed the construction of 12 new hospitals. The government has also tied the sector’s growth to a broad development agenda, building roads and bridges, strengthening agriculture, raising salaries, and improving schools and health care.
• Elections in Guyana is due on September 1, 2025, and the ruling PPP/C has indicated its intent to continue this development agenda if reelected.

(Source: Caribbean News Global)

• Barbados successfully exited its second consecutive International Monetary Fund (IMF) programme in May 2025, which helped to support the government’s Barbados Economic Recovery and Transformation (BERT) 2.0 domestic reform agenda. Over this period, the primary budget surplus rose by a significant 2.0% of GDP to 4.5%, helping the debt-to-GDP ratio drop back to about 100% last year from nearly 140% as recently as 2020.
• The government has indicated that it will maintain this austere fiscal stance in the coming years, with the primary surplus seen stabilising at current levels. It is expected that Barbados will continue to consolidate the improvements to its economic position in recent years, though it will remain highly vulnerable to shocks as a small island nation with a still heavy debt burden.  
• At 7.0% of GDP in 2024, FDI inflows financed the bulk of Barbados’s sizeable current account deficit, which was pushed wider last year by the negative impact of Hurricane Beryl on the tradable sector. In 2025, it is anticipated that Barbados’ ‘core balance’ will come close to moving into surplus territory, aided by a slight narrowing of the current account deficit on the back of residual strength in the tourism sector and an improvement in the terms of trade driven by a decline in commodity prices. This, in turn, should allow the country to maintain its healthy reserve position, with the import cover ratio currently standing at six months.
• Despite an austere fiscal policy, the economic outlook remains favourable. It is anticipated that growth will ease to about 3.0% this year from 4.0% in 2024, with this deceleration largely a function of fading catch-up effects and the drag from increasingly binding capacity constraints in the key tourism sector, which directly accounts for roughly 20% of GDP, according to the Central Bank of Barbados.
• Notably, the persistently strong non-inflationary growth seen in recent years helped the unemployment rate hit a record low of 6.3% in Q1 2025 in non-seasonally adjusted terms (6.9% in Q1 2024), underpinning relative political stability that is further supporting the reform agenda and creating a positive, self-sustaining cycle that is expected to continue.

(Source: BMI Fitch Solutions)

• Oil prices fell on Tuesday as traders thought a possible cease-fire in Russia's war with Ukraine might lead to easing or the end of sanctions on Russian crude oil, which would in turn boost global supply.
• Brent crude futures were down 50 cents, or 0.75%, at $66.10 a barrel. U.S. West Texas Intermediate crude futures for September delivery, set to expire on Wednesday, were down 72 cents, or 1.14%, at $62.70 per barrel. The more active October WTI contract was down 66 cents, or 1.05%, at $62.04 a barrel.
• Following a White House meeting on Monday with Ukrainian President Volodymyr Zelenskiy and European allies, U.S. President Donald Trump announced in a social media post that he had spoken with Russian President Vladimir Putin.
• Trump said arrangements were being made for a meeting between Putin and Zelenskiy, which could lead to a trilateral summit involving all three leaders. Suvro Sarkar, lead energy analyst at DBS Bank, said Trump's softened stance on secondary sanctions targeting importers of Russian oil had reduced the risk of global supply disruptions, easing geopolitical tensions slightly.
• Chinese refineries have purchased 15 cargoes of Russian oil for October and November delivery as Indian demand for Moscow's exports has fallen away. Zelenskiy described his talks with Trump as "very good" and noted discussions about potential U.S. security guarantees for Ukraine. Trump confirmed the U.S. would provide such guarantees, though the extent of support remains unclear.
• Trump has pressed for a quick end to Europe's deadliest war in 80 years, but Kyiv and its allies worry he could seek to force an agreement on Russia's terms.

(Source: Reuters)

• The Bank of England (BoE) will cut interest rates by a quarter-point once more this year and then again in early 2026 as a resilient economy generates persistent inflation, according to most economists in a Reuters poll who have largely not changed their outlook in the past month.
• Earlier this month, the central bank cut Bank Rate by 25 basis points to 4.00% after a rare second round of voting, in a 5-4 split in the Monetary Policy Committee. Governor Andrew Bailey said easing should not happen "too quickly or by too much."
• An unexpected surge in inflation to 3.6% in June prompted the BoE to lift its forecast for it to peak at 4.0% this quarter. Data due on Wednesday are likely to show inflation, which the BoE targets at 2.0%, rose further in July to 3.7%. However, economists in the poll still expect inflation to peak around current levels, suggesting that most have not adjusted their forecasts during August, which tends to be a quiet month with many economists away on summer holidays.
• Fifty of 62 economists polled August 13-19 said the BoE will cut Bank Rate by 25 basis points once more this year, most likely at the November meeting, which coincides with the bank's forecasting round. Nine expected the central bank to remain on hold.
• "Right now, the Bank of England is really on a knife-edge in terms of whether it wants to cut interest rates further. We think the disinflationary momentum, particularly in the wage data, will be just about enough to tip the MPC into cutting rates in November. I wouldn't be surprised to see continued split votes - two-way votes, three-way votes," said Chris Hare, senior economist at HSBC.

(Source: Reuters)

• Driven by a combination of increased revenue and lower direct costs, Dolphin Cove Limited (DCOVE) delivered a strong wave of earnings in Q2. Earnings for the quarter totalled US$1.07Mn, a 43.1% increase relative to Q2.
• During the quarter, DCOVE welcomed 47,817 visitors, an 8.0% increase over the same period in 2024. This, along with the Easter holiday in April and increased capacity at Yaaman boosted sales across all segments, driving quarterly revenue growth up 10.0%. Per-capita revenue also rose 7.0% year-over-year.
• This was achieved despite a 3.0% drop in arrivals from Sangster International Airport (MBJ) due to a falloff in arrivals from the USA (-5.0%), Canada (-6.0%), and the UK (-22.0%).  The strong topline growth reflects a surge in adventure activities, with Yaaman seeing its attendance up 30.0% compared to 2024.
• Direct costs fell to US$4.78K (from US$545.5K), and disciplined resource management kept Q2 operating costs at 11.1% of revenue (vs 14.1% in 2024), lifting gross profit to US$3.80Mn.
• Despite the stronger Q2 results, 6M net profit slipped 9.4% to US$1.93Mn, reflecting weaker Q1 earnings (-37.8% YoY), which eroded the earnings gains in Q2 as softer revenue owing to adverse weather and fewer cruise calls.
• As at the close of trading on Monday, DCOVE shares closed at J$14.09, reflecting a 23.8% year-to-date decrease. At this price, the shares trade at a P/E of 21.04x, which is above the Junior Market Tourism Sector Average of 16.36x.

(Sources: Dolphin Cove Limited & NCBCM Research)

• After declining in June, local consumer prices for July 2025 rose by 0.3%; however, point-to-point (P2P) inflation fell to 3.3% from 3.8% for June, according to the Statistical Institute of Jamaica (STATIN). This marks the second consecutive month that inflation is falling below the lower band of the Bank of Jamaica’s target range.
• The monthly increase was mainly due to a 0.9% rise in the index for the ‘Food and Non-Alcoholic Beverages’ division. Within the division, the index for the ‘Food’ rose by 0.9%, while the index for the ‘Non-Alcoholic Beverages’ increased by 0.4%. The increase in the ‘Food’ division reflects higher prices for agricultural produce, including vegetables and tubers.
• The inflation rate for the month was also influenced by an upward movement of 0.4% in the index for the ‘Transport’ division. This was due mainly to a 1.4% increase in the index for the group ‘Operation of Personal Transport Equipment’, primarily driven by higher petrol prices.
• The overall rate of inflation was moderated by a 0.8% decline in the index for the ‘Housing, Water, Electricity, Gas and Other Fuels’ division. This resulted from a 2.9% fall in the index for the group ‘Electricity, Gas and Other Fuels’ due to lower electricity rates owing to a reduction in general consumption tax on electricity.
• With the July price decline, the P2P inflation rate for the period July 2024 to July 2025 was 3.3%. This was influenced mainly by the point-to-point inflation rates for the divisions: ‘Food and Non-Alcoholic Beverages (3.7%), ‘Housing, Water, Electricity, Gas and Other Fuels’ (3.7%) and ‘Restaurant and Accommodation Services’ (6.3%).
• The continued decline of inflation below the BOJ’s 4.0%–6.0% target range creates a favourable condition for the BOJ to accelerate rate cuts in order to realign monetary conditions with its inflation mandate and support economic activity.

(Sources: STATIN, Bank of Jamaica, NCBCM Research)

• Brazil's central bank is still assessing whether the benchmark interest rate at 15% is appropriate to bring inflation down to its 3% target, economic policy director Diogo Guillen said on Monday, August 18, 2025.
• Policymakers kept rates unchanged in late July 2025 at a near 20-year high after 450 basis points in hikes since last September. They signalled borrowing costs would remain steady for a "very prolonged" period. Speaking at an event hosted by Warren Investimentos, Guillen stressed that the guidance signalled more rate holds. "We are still evaluating whether this is the appropriate rate to bring inflation to target," he said. "Once that rate is determined, it will remain unchanged for a very long period."
• Guillen acknowledged recent downside surprises in consumer price readings, but said the key issue with inflation is that it remains above target, with expectations and projections also unanchored from the official goal. Prices were up 5.23% in the 12 months through July, down from 5.35% in the previous month and below forecasts.
• Furthermore, Guillen emphasised economic growth is losing steam, as expected following the central bank's tightening stance.

(Source: Reuters)