• As reported by the Planning Institute of Jamaica (PIOJ), the economy is estimated to have grown by 8.1% during fiscal year 2021/22. 
• This outturn, which falls within the entity’s target range of 7% to 9%, reflects improved performances in all goods producing and service industry subsectors, except mining and quarrying, which contracted by an estimated 39.8% owing to the closure of Jamalco and Alpart. 
• The expansion in economic activity for the fiscal year was spurred, in part, by an estimated 6.0% growth for the January to March 2022 quarter. 
• This outturn represented the fourth consecutive quarter of growth and reflected a continuation of the recovery trend, following contractions in the corresponding quarter [in 2021] as a result of the COVID-19 pandemic and associated public health and social measures implemented to manage its spread. 
• Additionally, the BOJ indicated that growth in 2022/23 is projected to be in the range of 2% to 4%, driven primarily by the resumption of the tourism sector.

(Source: JIS News)

• Delta confirmed that their seat capacity to Jamaica for 2022/23 is up 1% over the same period in the pre-pandemic 2019/20 year. The airline also confirmed the return of service from Detroit and Minneapolis for Winter 2022/2023 to daily service for the first time since the pandemic started. 
• This resumption of daily non-stop service from two of Delta’s key Midwest gateways for Winter 2022/2023 combined with a capacity increase over pre-pandemic levels is a distinct vote of confidence in the ongoing recovery of tourism to Jamaica,” said Donovan White, Director of Tourism, Jamaica Tourist Board. 
• This is a part of the country’s initiative to secure strong airlift and it is also a  clear indication that we are well on our way toward returning our stopover arrivals to growth over 2019, the year when we received our highest number of stopover visitors to date. 
• Delta is one of the top air passenger carriers serving Jamaica from the U.S. During peak winter seasons, it flies non-stop to Montego Bay’s Sangster International Airport (MBJ) from Boston, Minneapolis, New York, and Atlanta as well as to Kingston’s Norman Manley International Airport (KIN) from Atlanta multiple times each week.

(Source: Our Today & NCBCM Research)

• Fitch Solutions sees limited threats to political stability in the Cayman Islands over the coming quarters as pandemic risks fade and the country's economic recovery accelerates. The successful COVID-19 vaccination rollout should help pandemic risks to fade. As of May 23 91.4% of the population were fully vaccinated and 36.0% had received a booster dose. This strong inoculation rate will positively impact the rebound in tourism activity which will help economic recovery to gain momentum. 
• Against this backdrop, the Cayman Islands' Short-Term Political Risk Index (STPRI) score was revised to 68.8 out of 100, from a previous 68.1. This primarily reflects an increase in the 'policy continuity' sub-component score from 70.0 to 75.0 (out of 100), given the lower risk that the government will face political gridlock, and the policy direction is likely to remain broadly pro-business. However, the overall increase in the STPRI score reflects moderately higher risks of public protests in the face of rising inflationary pressures.
• Consumer price inflation rose to 7.6% y-o-y in Q4 2021, and this figure is expected to rise further during H1 2022. This comes as a result of the economy’s heavy dependence on imports, which leaves it exposed to elevated global commodity prices and supply chain disruptions caused by Covid-19 lockdowns and the war in Ukraine. 
• Although price pressures are expected to ease in H2 2022 on the back of an ease of the lockdown restrictions in Shanghai, Fitch forecasts average inflation of 6.9% in 2022, up from 3.3% in 2021. This will erode household purchasing power and weigh on domestic demand, putting pressure on the government to take action to soften the impact on living standards.

(Sources: Fitch Solutions & NCBCM Research)

• Passenger occupancies on vessels at Nassau Cruise Port in the final week of May exceeded 97%, signalling that the sector is closing on full recovery from COVID-19’s ravages. Michael Maura, the Prince George Wharf operator’s chief executive, recorded 51,402 passengers during the last seven days in May - a number that was just shy of the combined 52,798 maximum guest capacity on the vessels at the port. 
• Comparing 2022’s performance year-to-date to 2019, the vessel occupancies and passenger volumes at Nassau Cruise Port are up by 24% and 4.8%, respectively. 
• Nassau Cruise Port was also highlighted by its 49 percent controlling shareholder, Global Ports Holding, as being one of two facilities - Antigua being the other - that produced the greatest increase in passenger volumes during the three months to end-March 2022. 
• Disclosing how Nassau is a key component in its growth strategy, Global Ports Holding said: “Long-term, the outlook for the cruise industry continues to be positive.” The passenger capacity of the industry is forecasted to grow by 45% by 2027 from 2019 levels, driven by the 75 cruise ships currently in the cruise ship order book and due for delivery by 2027. This would in turn positively impact the country’s bread-and-butter, tourism, which would spill over into other sectors and overall economic growth.

(Source: The Tribune)

• The U.S. 10-year Treasury yield dipped Thursday, as investors looked to employment data showing the slowest pace of job creation in the pandemic recovery so far. The yield on the benchmark 10-year Treasury note fell less than 1 basis point to 2.926%. The yield on the 30-year Treasury bond moved slightly higher to 3.094%. 
• Private sector employment rose by just 128,000 in May, payroll processing firm ADP reported Thursday. That fell well short of the 299,000 Dow Jones estimate and marked a decline from the downwardly revised 202,000 in April, initially reported as a gain of 247,000. The benchmark rate eased as traders took the ADP report to mean the economy is already slowing, suggesting the Federal Reserve could be less aggressive in tightening monetary policy. 
• Meanwhile, Fed Vice Chair Lael Brainard said it’s unlikely the central bank will be taking a break from its current rate-hiking cycle anytime soon as inflation remained at a 40-year-high. It is anticipated that a lot of work still needs to be done to get inflation down to its 2% target. 
• Rising prices around the world remain a key concern for investors, with euro zone inflation hitting 8.1% in May, according to data released on Tuesday. 
• On the data front, Wednesday, the number of April job openings declined sharply from the previous month — but the findings suggest the job market remains tight. Further, the Institute for Supply Management said its manufacturing PMI (purchasing managers’ index) came in at 56.1 for May, up from 55.4 the month before.

(Source: CNBC)

• Saudi Arabia and other OPEC+ states agreed to bring forward oil production increases to offset Russian output losses to ease surging oil prices and inflation and smooth the way for an ice-breaking visit to Riyadh by U.S. President Joe Biden. 
• OPEC+ said it had agreed to boost output by 648,000 barrels per day (bpd) in July - or 0.7% of global demand - and a similar amount in August versus the initial plan to add 432,000 bpd a month over three months until September. 
• The move will be seen as a sign of willingness by Saudi Arabia and other OPEC Gulf nations to pump more after months of pressure from the West to address global energy shortages worsened by Western sanctions on Russia. 
• Oil rose on the news to $117 a barrel as analysts said the real production boost will be insignificant as most OPEC members except for Saudi Arabia and the United Arab Emirates are already pumping at capacity. Earlier this year, oil came close to an all-time peak of $147 hit in 2008. 
• OPEC+, an alliance of the Organization of the Petroleum Exporting Countries and other producing nations, includes Russia, whose output has fallen by about 1 million bpd following Western sanctions on Moscow over its invasion of Ukraine. 
• With the Ukraine war adding to a tight crude market, the U.S. administration has sought more supplies from Gulf allies such as Saudi Arabia, as well as from Iran whose output has been restricted by U.S. sanctions that could be lifted if a nuclear deal is reached.

(Source: Reuters)

• Russian aluminum giant—Rusal—has been making steady payments to Jamaica as part of a 2021 agreement to pay back production taxes it owes the government, according to Jamaican Transport and Mining Minister Audley Shaw. 
• Rusal has paid about 45% so far of a $35Mn bauxite production levy that it owes Kingston, and is current and consistent in payment. As part of the 2021 agreement, Rusal paid the government 40% of the debt upfront last fall and then agreed to make 30 monthly payments starting in November 2021. 
• Russia's March invasion of Ukraine, which Russia terms "a special military operation," fueled a range of international sanctions against Moscow and Russian-based companies. 
• Rusal is not under sanctions by Jamaica or the United States, but the company has warned that Western sanctions on Moscow may complicate its international projects. Rusal, the world's largest aluminum producer outside of China, runs a bauxite and alumina production complex in Jamaica via its subsidiary WINDALCO. 
• WINDALCO has an annual production capacity of 502,000 tonnes of alumina and 4Mn tonnes of bauxite, according to its website. 
• Rio Tinto, one of the world's largest aluminum producers, said earlier this month that any sanctions on Rusal would cause "pretty significant disruption" to the global aluminum market. Given that Jamalco and Alpart are currently closed, sanctions on Rusal and by extension Windalco, would further lower the sector’s contribution to foreign exchange and gross domestic product (GDP) growth. This presents a downside risk to Jamaica’s 2022 real GDP growth forecast of 2.5% (IMF).

(Source: Investing.com & NCBCM Research)

• VM Investments Limited (VMIL) has agreed to make a private equity investment in Home Choice Enterprise Limited, which will see the wealth-building arm of the VM Group acquiring a sizeable stake in the manufacturing and distribution company. 
• The equity injection will allow Home Choice Enterprise to expand its business to meet the growing demand for its products, which include pepper shrimp, sauces, spices, juices, and condiments – in the local and export market. 
• VMIL CEO further noted that the investment is a continuation of a strategic push by VMIL to assist micro, small and medium-sized enterprises to unlock their full potential through financial advisory services and capital financing. 
• Home Choice, which has been in operation for over 22 years, is a staple in the local, regional and international market, with a customer base not only spanning the entire island of Jamaica inclusive of major supermarkets, wholesales, gas stations, gift shops and schools, but wherever there is a strong Jamaican Diaspora presence. 
• Given the favourable outlook of the manufacturing and distribution sector due to local economic recovery for 2022 and beyond, this investment should yield positive results.

(Sources: JIS News & NCBCM Research)

• Tourist arrivals to The Bahamas increased almost ten-fold in March 2022 compared to the prior year aided by the continued easing of COVID-related border restrictions and a rebound in global travel. 
• As major source markets further adjusted to COVID-19 pandemic conditions, initial data indicated that monthly tourism output maintained its growth momentum in March. Air traffic yielded 147,616, compared to 56,371 in the prior year, regaining 73.2% of the volumes registered in 2019. In addition, sea traffic was reinstated at 475,486 from a mere 6,394 visitors in the previous year, when cruise sailings remained suspended. 
• Total arrivals to New Providence amounted to 304,506 in March from 39,093 in the comparative period of 2021. That said the domestic economy is expected to sustain its recovery trajectory in 2022, undergirded by an ongoing strengthening in tourism sector output. 
• However, there are downside risks. The sector remains exposed to the COVID-19 virus, which could potentially stall progress made on the international health front and dampen the travel industry prospects. In addition, elevated international fuel costs could weaken the travel sector’s competitiveness, and major central banks’ counter-inflation policies could erode the consumers (in key source markets) spend on travel.

(Source: The Tribune)

• Prime Minister Dr. Keith Rowley says natural gas production in Trinidad and Tobago will be tight for the period 2024 to 2027 but will improve by 2028. 
• Gas supply between 2024 and 2027 will be tight before improving in 2028 with the new productions coming on stream, the Manatee and Calypso. Gas production is projected to increase from 48.5Mn cubic feet (1.4Mn m³) as of March 2022 to 3.2Trn cubic feet by 2024. However, the key to a sustained gas industry will be the exploration and development of its hydrocarbon resources as well as access to cross-border natural gas resources. 
• The Prime Minister stated that the Government has undertaken the dual responsibility to optimise the sovereign’s hydrocarbon resources for the benefit of its citizens and to reduce its carbon footprint. Investing in renewables and hydrocarbons over time can liberate oil and gas for export markets, and also create a diversified energy mix. 
• It is expected that hydrocarbons, and in particular natural gas, will play a larger role in T&T’s economic growth in the future. The current outlook, due to geopolitical events and energy security issues, suggests that natural gas is increasingly being considered not only as a low-carbon alternative but as the fuel of choice.

(Sources: Trinidad Express Newspaper & CBTT)