• The Jamaican economy grew by 2.3% during the second quarter of 2023 when compared to the second quarter of 2022. This resulted from growth in the Services and Goods Producing Industries of 2.2% and 2.6%, respectively. This performance reflected the continued recovery of the economy from the COVID-19 pandemic.
• All industries within the Services Industries grew, except for Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment and Producers of Government Services which both declined by 0.1%. Higher levels of activity were recorded for Transport, Storage and communication (5.6%), Hotels and restaurants (7.8%), Electricity and Water Supply (6.2%), Other Services (2.2%), Finance & Insurance Services (2.1%) and Real Estate, Renting & Business Activities (1.8%).
• The increase in the Goods Producing Industries was due to growth in Mining and quarrying (164.2%) and Manufacturing (3.1%). However, value added for the Agriculture, Forestry & Fishing and Construction industries declined by 8.1% and 0.7% respectively. Agriculture was impacted by continued drought conditions that significantly reduced yields and delayed the land preparation and planting of domestic crops while lower expenditure on the South Coast Highway Improvement Project impacted construction activity.
• The growth in the Mining and quarrying industry was largely due to higher output of alumina due to increased production at the JAMALCO plant which was closed in the similar period of 2022. The Manufacturing industry grew by 3.1% as a result of increased production in the Food, Beverages & Tobacco and Other Manufacturing sub-industries of 4.6% and 0.7%, respectively.

(Sources: STATIN & NCBCM Research)

• The Trinidad and Tobago economy grew by three per cent in the first quarter of this year, fuelled by the 'strong expansion' in the non-energy sector along with 'marginal growth' in the energy sector, the Central Bank reported.
• 'Data from the Central Statistical Office (CSO) indicate that real GDP grew by 3.0% (year-on-year) in the first quarter of 2023 reflecting strong expansion in the non-energy sector (4.2%) accompanied by marginal growth in the energy sector (0.3%),' the Central Banks stated in its Monetary Policy Announcement last Friday.
• In the second quarter of 2023, indicators monitored by the Central Bank point to a steady rise in activity in major non-energy sectors including transportation and storage, wholesale and retail trade (excluding energy), electricity and water (excluding gas) and construction.
• The unemployment rate also increased slightly to 4.9% in the first quarter of 2023 from 4.7% in the fourth quarter of 2022, it stated. Headline inflation eased further in August to 4.1% (year-on-year), down from 4.7% recorded in July, the Central Bank stated.
• It was also reported that the buoyancy in private sector credit, alongside the sustained deceleration in inflation, was helping to foster a steady revival of economic activity without demand pressures at this time.
• Considering all factors, the MPC agreed to hold the repo rate at its current level of 3.50%. The Central Bank will continue to carefully monitor and analyse international and domestic developments and will take further actions as necessary.

(Source: Trinidad Express Newspaper)

• Annual inflation in Peru decelerated to 5.04% in September to hit its lowest level in more than two years, according to official figures published on Sunday, though consumer prices remained some way above the central bank's target rate.
• Data from the national statistics agency INEI (National Institute of Statistics and Informatics) showed the key index based on the metropolitan region of Lima slowed to its lowest level since August 2021, when it stood at 4.95%.
• On a month-to-month basis the Lima Consumer Price Index, Peru's inflation benchmark, inched up 0.02% in September, well below the 0.38% increase in August. The figures are a boost to Peru's bid to wrestle inflation back to the central bank's official target of 2%, plus or minus one percentage point.
• The monetary authority kept its benchmark interest rate unchanged in August at 7.75% for the seventh month in a row after an aggressive series of hikes started in August 2021, part of its efforts to tame high consumer prices.
• INEI said in a statement that inflation in September was driven by price rises in transportation, restaurants and hotels, and miscellaneous goods and services, which rose 0.56%, 0.43% and 0.32%, respectively.
• The world's second-largest copper producer has been grappling with poor weather, lower private investment in mining and anti-government protests staged earlier this year, which has led the government to slash its forecasts for economic growth to 0.9% from 2.2%. Nonetheless, this easing of prices, if sustained could hint at possible higher growth forecasts in 2024.

(Source: Reuters)

• Japan's business sentiment improved in the third quarter, a central bank survey showed, suggesting conditions for a durable economic revival are falling into place even as a global slowdown keeps policymakers cautious about the outlook.
• The big non-manufacturers mood brightened to levels unseen since 1991 when Japan was experiencing an asset-inflation bubble, a sign retailers were benefitting from a rebound in consumption after dismantling pandemic curbs. Companies also retained their robust spending plans and faced a tight labour market, the survey showed, suggesting that conditions for the Bank of Japan to phase out its massive stimulus could fall into place.
• The headline big manufacturers' confidence index rose to 9 in September from 5 in June, the BOJ's closely-watched "tankan" survey showed, exceeding market forecasts for a reading of 6 and marking the second straight quarter of improvement. The Big non-manufacturers index stood at 27, up from 23, the survey showed, above a median market forecast of 24 and improving for the sixth straight quarter. It was the highest reading since November 1991.
• "The stronger-than-expected improvement in the latest tankan survey suggests that the economy will continue to expand at an above-trend pace, which is contributing to mounting staff shortages and persistent price pressures," said Marcel Thieliant, head of Asia-Pacific at Capital Economics. Many big companies said they could pass on higher costs to consumers, leading to improved business mood, a BOJ official told a briefing.
• Corporate earnings and business sentiment will be key to whether wages will keep rising next year in tandem with higher inflation and lay the groundwork for the BOJ to phase out its massive monetary stimulus.

(Source: Reuters)

• Europe's solar power industry has warned policymakers not to impose tariffs on imports, amid fears that disrupting supplies of products from China would seriously damage Europe's ability to rapidly install clean energy.
• The call comes as Brussels and European governments consider tougher action on imports as they seek to expand clean tech manufacturing in Europe and reduce the reliance on China for products needed for the green transition.
• The European Commission launched an investigation that could lead to tariffs to protect EU producers against cheaper Chinese electric vehicle imports. Meanwhile, Germany is examining options including trade protections to shield local solar manufacturers from falling global prices, a government document seen by Reuters showed.
• "Tariffs are not a good answer to the current challenges in the European solar industry," said Gunter Erfurt, Board Director at industry group SolarPower Europe, whose members include producers, large buyers and companies involved in installation. "Instead of sanctioning the entire industry through tariffs, we must incentivize solar installations that originate from resilient European solar production. This way, the deployment of solar energy can continue undisturbed while the European solar manufacturing can grow steadily," said Erfurt, who is CEO of Swiss solar cell maker Meyer Burger.
• In a statement, SolarPower Europe said trade barriers on solar would be a "lose-lose strategy", and urged them to instead help local manufacturers grow - including by making it easier to support local factories under EU state aid rules.

(Source: Reuters)

• Sagicor Financial Company has confirmed that it received regulatory approvals to acquire Canada-based life insurance firm, ivari. Sagicor says the transaction is expected to close on or about October 3 this year, subject to the satisfaction of all closing conditions.
• The company announced that last year it was tipped to acquire ivari, one of the largest providers of universal life insurance in Canada.
• The deal, once complete, will add CAD$13.9Bn to Sagicor's existing assets. In August 2022, Sagicor said the expected consideration, to be paid in cash at the close of the deal, is CAD$325Mn.
• The acquisition of Ivari will transform Sagicor into a leading North American insurer serving the middle market in addition to market leadership in the Caribbean. Furthermore, the acquisition of Ivari is consistent with Sagicor's business goal of expanding into individual life insurance and diversifying into neighbouring geographic areas.
• This acquisition is likely to result in a rating upgrade on the Company from S&P and/or Fitch which both noted that ivari would add value to Sagicor's credit profile given the prospective business and geographic diversification, ivari's good capital adequacy, and better asset quality in the group's investment portfolio.

(Source: RJR News)

• Approximately 88,000 passengers are expected to set foot on Trinidad's shores during the upcoming cruise season, reflecting an 81% increase compared to last year, Tourism Trinidad Ltd has stated.
• 'Building upon the achievements of the 2022-2023 season, initial projections indicate that approximately 88,000 passengers and 30,000 crew will set foot on Trinidad's shores, ushering in an influx of economic prosperity, cultural enrichment, and boundless opportunities for local businesses.
• For the upcoming season, there are ten inaugural visits and five new cruise lines expected to arrive. 'The last cruise season showcased the remarkable potential of Trinidad's cruise industry. A total of 48,243 passengers arrived via 29 calls at the Cruise Ship Complex in Port of Spain. This past season exemplified the island's ability to offer a remarkable experience to cruise visitors from around the world,' the release stated.
• 'The economic impact of the previous season was undeniable. The passenger disembarkation rate was at 80% or four in every five passengers with an average spend of US$43 per person. This infusion of spending power generated substantial revenue for local businesses, invigorating sectors such as retail, hospitality, transportation, and entertainment, and contributing to the overall economic growth of Trinidad,' it stated.
• Tourism Trinidad CEO Carla Cupid added, 'Employment opportunities flourished as the cruise season unfolded. Local guides, tour operators, taxi drivers, craft vendors and service personnel played a pivotal role in ensuring an unforgettable experience for cruise passengers. This surge in employment not only provided income for individuals but also fostered skills development and contributed to the growth of the local tourism sector.'

(Source: Trinidad Express Newspaper)

• Peru is looking to put the "chaos" of months-long protests earlier this year behind it to revitalize flagging mining investment in the world's no. 2 copper-producing nation, even as executives demand more stability to boost spending.
• As a mining conference in the southern Andean region of Arequipa got started this week, Prime Minister Alberto Otarola addressed concerns about political instability and protests that have led to an expected 18% drop in mining investment this year.
• "We are not going to allow the country to fall into chaos, disorder and insecurity," Otarola told hundreds of gathered mining business leaders, adding the government was also working to streamline environmental permitting regulations.
• In interviews with Reuters, senior executives said that while things had improved since major nationwide protests at the start of the year, governance remained weak, while unclear rules and red tape for issues such as using contractors and securing environmental permits remained an obstacle to new investment.
• Copper output has rebounded this year, but sliding investment in the Andean country, which has had six presidents in the last five years, has put production and the wider economy at risk. Mining makes up 60% of Peru's total exports.
• "Peru has been growing and that is good, but at the institutional level we have not grown at the same speed, with the level of political maturity," Victor Gobitz, president of Peru's biggest copper mine Antamina said. "We have a fragmented political system, which takes its toll on the entire country."

(Source: Reuters)

• The U.S. economy maintained a fairly solid pace of growth in the second quarter and activity appears to have accelerated this quarter, but a looming government shutdown and an ongoing strike by auto workers are dimming the outlook for the rest of 2023.
• Inflation also remains elevated and tight labour market conditions continue to prevail, with the number of Americans filing new claims for unemployment benefits rising slightly last week, the reports showed on Thursday.
• "The big news is not that nothing has changed, but that the economy remains resilient, inflation remains elevated and the Fed's worst-case scenario, stagflation, has been avoided for now," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina. "Given how much the Fed has raised rates, it's impressive that the economy is still growing at this pace."
• Gross domestic product increased at an unrevised 2.1% annualized rate last quarter, the government said in its third estimate of GDP for the April-June period. That was in line with economists' expectations. A downgrade in growth in consumer spending to a lacklustre 0.8% rate from the previously reported 1.7% pace was offset by a sharp upward revision to business investment in factories amid a push by the Biden administration to bring semiconductor manufacturing back to the United States.

(Source: Reuters)

• Federal government shutdowns have become so common in recent years that forecasters have a good read on how another one would affect the American economy. The answer is fairly simple: The longer a shutdown lasts, the more damage it is likely to inflict.
• A brief shutdown would be unlikely to slow the economy significantly or push it into recession, economists on Wall Street and inside the Biden administration have concluded. That assessment is based in part on the evidence from prior episodes when Congress stopped funding many government operations.
• On the other hand, a prolonged shutdown could hurt growth and potentially President Biden’s re-election prospects. It would join a series of other factors that are expected to weigh on the economy in the final months of this year, including high interest rates, the restart of federal student loan payments next month and a potentially lengthy United Automobile Workers strike.
• A halt to federal government business would not just dent growth. It would further dampen the mood of consumers, whose confidence slumped in September for the second straight month amid rising gas prices. In the month that previous shutdowns began, the Conference Board’s measure of consumer confidence slid by an average of seven points, Goldman Sachs economists noted recently, although much of that decline reversed in the month after a reopening.
• Gregory Daco, the chief economist at EY-Parthenon, said a government shutdown would not be a “game changer in terms of the trajectory of the economy.” However, he added, “the fear is that, if it combines with other headwinds, it could become a significant drag on economic activity.”
• Goldman Sachs economists have estimated that a shutdown would reduce growth by about 0.2 percentage points for each week it lasted. That’s largely because most federal workers go unpaid during shutdowns, immediately pulling spending power out of the economy. However, the Goldman researchers expect growth to increase by the same amount in the quarter after the shutdown as federal work rebounds and furloughed employees receive back pay.
• The economy appears healthy enough to absorb a modest temporary hit. The consensus forecast from top economists is for growth to approach 3.0%, on an annualized basis, this quarter. Yet, economists expect growth to slow in the final months of the year, raising the risks of recession if a shutdown lasts several weeks.

(Source: The New York Times)