• GraceKennedy Limited (GK) has advised that the merger of two of its local manufacturing divisions, National Processors (Nalpro) & Grace Food Processors Canning (Canning) is near completion. The combined operation has been named Grace Food Processors NALCAN. 
• The strategic decision to merge the operations of Nalpro and Canning was in keeping with GraceKennedy’s objectives to increase exports from 30% to 50% of their manufactured output by 2025, and also significantly increase domestic production.  
• The merger will see the relocation of Nalpro’s operations, which was situated in Temple Hall in St Andrew, to Canning at Twickenham Close in Kingston. Nalpro manufactures drink crystals, cereals, and dry mixes for soups; while Canning produces canned vegetables, sauces, and beverages, including Grace Tomato Ketchup and Tropical Rhythms. 
• Considerable transportation savings, reduced export consolidation expenses, and improved administrative efficiencies are expected to be realized with Nalpro’s relocation to Canning, which was determined to be the best place to house the merged operations because of its proximity to the ports. 
• The merger will be beneficial as the company continues to drive growth, reduce costs and remain internationally competitive to improve future shareholder value.

(Source: JSE)

• Several private investors have submitted proposals for renewable energy projects in Jamaica for Government consideration. Among them is an integrated solar and hydro energy project, which was announced by Prime Minister, the Most Hon. Andrew Holness. 
• These investments follow the House of Representatives’ recent approval of the exemption of GCT on Lithium-Ion Batteries. Renewable energy continues to be a major talking point as an alternative source of energy in light of the high energy prices experienced as a result of geopolitical tensions. 
• These investments are expected to assist in realizing the Government’s goal of increasing the ratio of energy generated from renewable options from the national power grid to 50% by 2030. 
• This could also contribute to a 60% reduction in Jamaica’s carbon dioxide emissions, also being targeted for 2030, in keeping with the country’s Nationally Determined Contributions (NDCs) under the Paris Agreement. The NDCs embody countries’ efforts to reduce carbon dioxide emissions and adapt to the impacts of climate change.

(Source: JIS News)

• Mexico's annual inflation accelerated in June to a level not seen since early 2001, suggesting the central bank will have little choice but continue its monetary tightening to tame spiraling consumer prices. Mexican consumer prices rose 7.99% in the year through June, this is slightly above the 7.95% consensus forecast of economists polled by Reuters. 
• This was also far above the central bank's target of 3%, plus or minus a percentage point, and marked the highest level since January 2001, when Mexico's 12-month inflation stood at 8.11%. The latest inflation figures are expected to lead Banxico, as the central bank is known, to keep raising rates after a record 75-basis points hike last month, when it warned it would hike rates again and by as much to curb inflation.  
• Chief emerging markets economist at Capital Economics is projecting a 75bps hike in the policy rate in August to 8.5%, which places his policy rate forecast for 2022 at 9.5%.

(Source: Reuters)

• Sri Lanka’s Central Bank has raised its key interest rates to their highest levels in more than 20 years to try to contain inflation that has added to the country’s economic woes. The central bank raised its Standing Deposit Facility Rate by 100 basis points to 14.50%. The move is expected to help draw more funds into the banking sector. It also raised the Standing Lending Facility Rate that it charges commercial banks by 100 basis points, to 15.50%. The bank said it expects to tighten its monetary policy further to fully curb inflation, which rose to nearly 55% in June, while food inflation topped 80%. 
• Recent price hikes have been a severe blow, especially for the South Asian country’s poor and vulnerable groups as they endure their country’s worst economic crisis in memory, struggling with acute shortages of essentials such as food, fuel, and cooking gas, and medicines. 
• Two weeks ago, Prime Minister Ranil Wickremesinghe told lawmakers the economy had “collapsed.” On July 6, 2022, he announced he had called Russian leader Vladimir Putin to request credit support to help the country import fuel. 
• Fitch Solutions Country Risk & Industry Research forecast that it would push the Standing Deposit Facility Rate to 16.50% and the Standing Lending Facility Rate to 17.50% by the year’s end.

(Source: AP News)

• Boris Johnson announced on July 7^th, 2022 he would quit as British prime minister after he dramatically lost the support of his ministers and most Conservative lawmakers, but said he would stay on until his successor was chosen. 
• Bowing to the inevitable as more than 50 government ministers and aides quit and lawmakers said he must go, an isolated and powerless Johnson said it was clear his party wanted someone else in charge, but that his forced departure was "eccentric" and the result of "herd instinct" in parliament. 
• A snap YouGov poll found that defence minister Ben Wallace was the favourite among Conservative Party members to replace Johnson, followed by junior trade minister Penny Mordaunt and former finance minister Rishi Sunak. 
• Johnson's office said he made clear at a meeting of his new cabinet on Thursday that the government would not seek to implement new policies or make major changes of direction, and major fiscal decisions should be left for the next leader.

(Source: Reuters)                                                              

• Jamaica has welcomed 1,117,137 stopover visitors since the start of the year, and has generated over US$1.5Bn in earnings as the industry continues to show very strong recovery from the fallout caused by the COVID-19 pandemic. 
• Tourism Minister, Hon. Edmund Bartlett said the industry’s gradual recovery has remained on track because the ministry continues to expand its market footprints. 
• Critical to this, he informed, has been the move to explore and tap into emerging markets “where the economies are growing and doing better and where the affordability levels are higher” rather than relying on traditional locations, such as the United States, United Kingdom, and Canada. Among the emerging markets, are the Middle East and several countries in Africa. 
• There are also consultations taking place with the Saudia (formerly Saudia Arabian Airlines), Qatar Airways, Etihad Airways, the Emirates Airlines, and the Royal Jordanian Airlines as well as the prospect for collaborations with South African Airways and airlines in Nigeria with hopes of enabling connectivity to Jamaica’s airspace. 
• The ministry is projecting 3.3Mn visitor arrivals and earnings of approximately US$4Bn by the end of the 2022/23 fiscal year. This will continue to support real GDP growth in 2022 with the sector already reporting a 107% increase in Q1 2022, which contributed to the 6.4% overall growth in the economy.

(Source: JIS News)

• The government of Jamaica has announced it will be spending an additional $2.7Bn to provide targeted support to Jamaicans who are most adversely affected by the high cost of living. This totals $3.8Bn in social intervention expenditure, of which $1.1Bn is already accounted for in the 2022/2023 Budget. 
• The support will go towards independence clean up, trucking of water to areas experiencing water challenges, support for PATH beneficiaries, pensioners, back-to-school one-off grants, welfare and economic enablement activities and Poor Relief through Ministry of Local Government & Rural Development. 
• The incremental $2.7Bn expenditure will initially be funded by advances from existing budgeted resources. These advances will be cleared following regularization of the expenditure in the First Supplementary Estimates 2022/23. 
• However, if revenues do not outperform expectations ($770.93Bn), the additional social expenditure could negatively impact the government’s ability to achieve its fiscal surplus of 0.3% of GDP for the 2022/23 fiscal year.

(Sources: JIS News & Ministry of Finance and the Public Service)

• The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with the Dominican Republic and considered and endorsed the staff appraisal without a meeting. 
• The Dominican Republic continued to show remarkable resilience to global shocks, supported by sound policies, monetary policy support, a nimble COVID vaccination campaign and a well-attuned reopening that allowed the economy to make the most of the global rebound last year. This resilience and strong signals of policy sustainability are placing the Dominican economy in a good position to face emerging global challenges going forward. 
• The outlook points to a continued recovery, though global developments pose risks. GDP growth would converge to its potential and inflation would return to the target range by next year as the impact of global shocks recedes, in the context of financial stability and a sound external position. 
• As for risks, the war in Ukraine may have a stronger-than-expected effect on global growth and inflation. The pandemic, while well-contained in the Dominican Republic, may downgrade growth in other regions, and monetary policy tightening in the United States may have a stronger-than-expected impact on capital flows. 
• The authorities have responded with temporary measures while maintaining budget discipline through expenditure control and executing proactive debt-management that reduced financing risks.

(Source: IMF)

• European Commission chief Ursula von der Leyen said that the 27-nation European Union needs to make emergency plans to prepare for a complete cut-off of Russian gas in the wake of the Kremlin’s war in Ukraine. 
• The EU has already imposed sanctions on Russia, including on some energy supplies, and is steering away from Kremlin-controlled deliveries. But the head of the EU’s executive branch said the bloc needed to be ready for shock disruptions coming from Moscow, and said the first plans would be presented by the middle of the month. 
• Energy, and the prospect of a winter without enough heating for homes or power to keep factories going, could now pose a similar challenge to EU solidarity and a source for populist-spawned division. 
• “It is very important to have a European overview and a coordinated approach to a potential complete cut off of Russian gas,” von der Leyen said. A dozen members have already been hit by reductions or full cuts in gas supplies as the political standoff with Moscow over the Ukraine invasion intensifies. 
• The EU has not included gas — a fuel used to power factories and generate electricity — in its own sanctions for fear of seriously harming the European economy. Before the war in Ukraine, it relied on Russia for 25% of its oil and 40% of its natural gas. In the meantime, the average monthly import of Russian pipeline gas is declining by 33% compared with last year, von der Leyen said as she called for a speedy transition toward renewable sources of energy.

(Source: AP News)

• The number of Americans filing new claims for unemployment benefits unexpectedly rose last week and there are growing signs that demand for labour is cooling, with layoffs surging to a 16-month high in June as the Federal Reserve's aggressive monetary policy tightening stokes recession fears. 
• But the weekly jobless claims data from the Labour Department on Thursday was likely distorted by Monday's Independence Day holiday, which resulted in several states, including California, submitting estimates. Nevertheless, the labor market is losing momentum. 
• "This is what the Fed wants, but it needs to be orderly to avoid an increase in recession risks," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania. 
• Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 235,000 for the week ended July 2, the highest level since January. Economists say claims need to rise above 250,000 on a sustained basis to raise concerns about the labour market's health. 
• Claims could become even more volatile in the weeks ahead. Automobile manufacturers typically close assembly plants for annual retooling after the Independence Day holiday, which is anticipated by the seasonal factors, the model that the government uses to strip out seasonal fluctuations from the data. However a global semiconductor shortage has forced manufacturers to adjust their schedules.

(Source: Reuters)