• The International Monetary Fund (IMF) revealed that the Bahamas exceeded its economic growth projections for 2021. The country had achieved more than double the projected gross domestic product (GDP) growth with actual economic output expanding by 5.5% relative to the forecasted 2%. 
• However, the faster-than-anticipated reflation of the Bahamian economy following the COVID-19 pandemic, coupled with the impact from soaring global inflation and uncertainties caused by Russia’s invasion of Ukraine, has resulted in the IMF reducing 2022’s growth forecast by two percentage points from 8 per cent to 6 per cent. However, GDP growth estimates for 2023 have been maintained at 4.1%. 
• The Bahamas’ tourism-dependent economy was hit hard by the COVID-19 pandemic, which came on the heels of the devastation caused by Hurricane Dorian. While the economy is recovering strongly, the pandemic has exacted a tragic human and social toll and caused a significant weakening in public finances. 
• Coupled with an increase in construction activity, the output is estimated to have expanded by around 5.5% last year. Real GDP growth is estimated at around 6% this year, although a full recovery to pre-pandemic levels is not expected before the end of 2023. Furthermore, inflationary pressures are building in line with global developments and are expected to ease only gradually.  
• Risks to the outlook are however significant. A re-intensification of the pandemic cannot be discarded. With about 40 per cent of the population fully vaccinated, the emergence of new COVID-19 variants could prolong the pandemic and induce renewed economic disruptions. Alternatively, rising cases in source countries could dissuade travel and lead to a renewed decline in tourism. Higher food and oil prices, because of the effects of the war in Ukraine, could erode consumer demand and impose a particularly heavy burden on the vulnerable.

 (Sources: IMF and The Tribune)

• Federal Oil prices jumped 5.0% to over $121 a barrel on Wednesday as disruptions to Russian and Kazakh crude exports via the Caspian Pipeline Consortium (CPC) added to worries over tight global supplies. 
• Brent crude futures were up $4.83, or 4.2%, at $120.30 a barrel as of 1:55 p.m. EDT (1755 GMT). U.S. West Texas Intermediate (WTI) crude futures rose $4.39, or 4%, to $113.70 a barrel. 
• Crude oil exports from Kazakhstan's CPC terminal on Russia's Black Sea coast stopped fully on Wednesday after damage caused by a major storm and continued bad weather, a port ship agent and the head of CPC said. Russian Deputy Prime Minister Alexander Novak later said that oil supplies by the CPC may be completely stopped for up to two months. 
• The CPC pipeline carries around 1.2 million barrels per day of Kazakhstan's main crude grade, which accounts for 1.2% of global demand. The situation adds to market worries about the ripple effect of heavy sanctions on Russia, the world's second-largest crude exporter after it invaded Ukraine, which Moscow calls a special military operation.

(Source: Reuters)

• A sharp increase in mortgage interest rates is taking its toll on loan demand, especially refinances. Total mortgage application volume fell 8.1% last week compared with the previous week, according to the Mortgage Bankers Association’s (MBA) seasonally adjusted index. 
• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.50% from 4.27%, with points rising to 0.59 from 0.54 (including the origination fee) for loans with a 20% down payment. 
• Mike Fratantoni, the MBA’s chief economist noted that the jump in rates comes as markets moved to price in a much faster pace of rate hikes, as well as expectations of fewer MBS purchases from the Federal Reserve. He added that MBA’s new March forecast expects mortgage rates to continue to trend higher through the course of 2022. 
• As a result, applications to refinance a home loan, which are highly sensitive to weekly rate moves, fell 14.0% from the previous week and were 54.0% lower than the same week one year ago. The refinance share of mortgage activity decreased to 44.8% of total applications from 48.4% the previous week. 
• Mortgage applications to purchase homes, which is less sensitive to weekly rate moves, fell 2% for the week and were 12% lower than the same week one year ago. Economists are starting to revise their home sales forecasts lower, due to rising rates. The housing market is already expensive, as a supply-demand imbalance puts upward pressure on prices. Rising rates are weakening affordability even further.

(Source: CNBC News)

• All new vehicles for the public fleet are to be electric. This is the intention of the Government as disclosed by Prime Minister, the Most Hon. Andrew Holness, when he addressed the House of Representatives in his contribution to the Budget Debate on Thursday (March 17). 
• This measure is being driven by two key factors. Firstly, several global automobile manufacturers have decided to discontinue the manufacturing of internal combustion engines by 2030 to meet regulatory requirements for climate change goals. Therefore, the world will have to transition to cleaner and more environmentally friendly alternatives such as electric vehicles. Secondly, the transition towards electric vehicles will help to reduce the government's import bill. Oil imports used for the creation of gasoline weighs heavily on Jamaica's import bill and have been exacerbated by the Russia-Ukraine war. Going forward a transition towards electric vehicles will result in significant cost savings for the country as a whole. 
• The government has developed a strategic framework to guide the introduction of electric vehicles in Jamaica. This was done with the assistance of the Inter-American Development Bank (IDB). According to the IDB, a conversion to e-mobility of 12%-16% of our private and public fleet would result in savings to Jamaica of approximately 2% of gross domestic product (GDP).

(Source: NCBCM and JIS)

• Bahamas’ Central Bank Governor on Tuesday stated that nearly $3Bn in Russian connected assets held by the country’s international financial services industry represents “less than 1 per cent” of the sector’s total business. 
• As an extension of its regular surveillance, the Central Bank has gathered data from international banks and trust companies on their level of Russian business activities. The results of this exercise indicated as of February 28, 2022, this sector held approximately $420Mn in deposits and $2.5Bn in custody or trust assets with ultimate beneficial owners from or connected to Russia. 
• The Attorney General’s Office, in a statement last week, listed 22 individuals including Roman Abramovich, owner of the UK’s Chelsea football club as well as 99 private and public Russian and Belarus entities now subject to sanctions. However, the Central Bank made clear that none of this near-$3bn sum was necessarily connected to the 121 sanctioned Russian individuals and entities it named last week. 
• The Bahamas, as a major international financial centre (IFC), has come under growing pressure from the US, its major trading partner, to act in imposing sanctions over the Ukraine invasion. The Davis administration had been hoping to act in unison with other CARICOM members but has now moved on its own after a common position among the region has failed to develop just yet.

 (Source: The Tribune)

• The Prime Ministers of Belize and Barbados, both stressed the importance of a unified response to the multiplicity of global economic challenges facing the region. The emphasis now, they suggested, must be on actions that result in self-reliance and resilience.
• CARICOM heads agreed that the region urgently needed to implement measures intended to create self-sufficiency in food production and energy, deliver an effective and viable CARICOM Single Market and Economy (CSME), and more aggressively seek out the funding required to drive regional economic recovery. 
• To coordinate this, a resuscitated and enlarged CARICOM Economic Recovery Committee is to meet to recommend how these and other overlapping strategic issues, including post-pandemic recovery, long-term indebtedness, the shameful absence of international resources to support climate change adaptation, and measures to offset the alarming global economic disruption caused by Russia's invasion of Ukraine. 
• Whether member states can rapidly achieve even a part of what is required is unclear, but as Prime Minister Mottley pointed out, without a unified response, the region's development trajectory will be derailed.

 (Source: MENAFN- Caribbean News Global)

• Federal Reserve officials are doing little to downplay rising market expectations the U.S. central bank will raise interest rates by half a percentage point in May to curb the surge in inflation, but they also are not dispelling fears the tightening cycle could blow a hole in the economy and labour market. 
• Louis Fed President James Bullard told Bloomberg TV on Tuesday that the Fed needs to move aggressively to keep inflation under control, repeating his call for the central bank to raise its benchmark overnight interest rate above 3% this year. 
• Bullard, who dissented on the Fed's decision last week to raise the federal funds rate by just a quarter of a percentage point from the near-zero level, has made this same point before. But his view appears to be gaining traction. 
• On Monday, Fed Chair Jerome Powell said the central bank must move expeditiously to raise rates and said that nothing would prevent the central bank from raising rates by half a percentage point at the May 3-4 policy meeting. 
• Those comments prompted a flood of bets in futures markets on half-point interest rate increases in May and June. Traders now see the federal funds rate rising to the 2.25%-2.50% range by the end of the year - short of Bullard's view but higher than the 1.9% suggested by Fed forecasts last week. 
• Powell said the economy is strong enough to withstand higher borrowing costs without damaging the labour market and argued the best thing the Fed could do to ensure continued labour market strength is to get inflation under control.

(Source: Reuters)

• Energy and commodity markets are in shock after Russia invaded Ukraine, the world's top trading firms said on Tuesday, warning of gas and diesel shortages in Europe and economic recession if Russian flows fall further. 
• Prices across gas, oil, metals and agricultural markets have soared since the invasion and become so volatile that companies have had to cut traded volumes owing to strained liquidity. The chief executives of four of the biggest energy traders - Vitol, Gunvor, Mercuria and Trafigura - said the gas market, in particular, had become dysfunctional owing to unmanageable margin calls. 
• Vitol CEO Russell Hardy told the FT Commodities Global Summit that the longer the war goes on, the greater the chance of an economic recession. Russia calls the biggest invasion in Europe since World War Two a "special military operation" to disarm Ukraine and protect it from "Nazis". The West says this is a false pretext for an unprovoked war against a democratic country. 
• Energy markets had little spare capacity even before Russia launched its invasion on Feb. 24. They will now struggle to absorb the potential loss of about 2.0Mn barrels per day (bpd) of oil from Russia, which competes with Saudi Arabia as the world's biggest oil exporters.

(Source: Reuters)

• Main Events Entertainment Group reported a net loss of $40.64Mn for its first three months ending January 31, 2022, as higher costs outpaced revenue growth. The emergence of the Omicron variant, which resulted in the re-imposition of restrictive measures brought an immediate and sharp decline in demand for its services and this curtailed topline growth. 
• The company realised a 14.7% year over year increase in revenues during the quarter. However, stronger growth was expected before the emergence of the Omicron variant. Management highlighted that it began the year with strong client interest for its core services. However, with the emergence of the Omicron variant by mid-December, it faced multiple requests to scale back or defer holiday season projects. 
• In some instances, planning and preparatory work had already begun, and certain costs had already been incurred. As such, these costs turned into sunk costs, which contributed to elevated direct and indirect costs of $57.61Mn (88.5%) and $20.63Mn (32.0%), respectively.
• The company's prospects for the remainder of its financial year have improved significantly primarily due to the full withdrawal of the COVID-19 restrictions on the entertainment industry. MEEG is expected to see increased demand for its services supported by pent-up demand from the general public for entertainment services, which should positively impact its financial performance. 
• MEEG’s stock price has increased by 107.7% since the start of the calendar year and closed Monday’s trading session at $9.35.

(Source: Company Financials)

• The physical landscape of Eccles, East Bank Demerara, is set to be transformed with the construction of a US$25 million wharf facility to service Guyana’s fast-growing oil-and-gas sector. 
• Once completed, the wharf is expected to accommodate a total of three vessels measuring 75 meters. The project will create direct jobs for over 50 persons during and after the construction phase. 
• The timely development of such projects and simultaneous exploration success offshore will enable the steady advancement of human resource capabilities and enhanced economic growth. Additionally, outside of investments within the oil-and-gas sector, there have also been immense direct benefits as a result of the country’s oil resources. 
• The current oil boom is expected to catapult Guyana to the ranks of the wealthiest countries in the Western Hemisphere over the next two decades, which will increase the government’s fiscal space to invest in initiatives to expand the economy and improve the overall welfare of citizens.

 (Source: Guyana Chronicle)