• Finance Minister Dr. Nigel Clarke says Jamaica only has three more steps to complete before meeting the Financial Action Task Force (FATF) requirements for removal from the grey list. Speaking during a radio interview on Wednesday, Dr. Clarke said progress is being made to meet the October deadline. 
• He highlighted that the three outstanding matters are to operationalise risk-based supervision of beneficial ownership by the Companies Act; of lawyers by the General Legal Counsel; and of trust and corporate service providers by the Financial Services Commission.
• He noted that once that risk-based supervision is demonstrably operationalised by those three regulatory bodies, Jamaica will then be able to apply for an on-site examination where FATF will come to Jamaica and verify for themselves that these actions have indeed been taken, the operationalization is indeed in effect, and then if that on-site is successful, Jamaica will be able to be removed from this grey list.
• Countries which fall on the grey list are subject to increased monitoring, as the entity deems them as needing to address certain gaps in their terrorist financing and money laundering regimes.
• If Jamaica does not meet the October deadline, further enhanced restrictions could be put in place for financial transactions and business relations being conducted on the island.

(Source: RJR News)

• The International Monetary Fund (IMF) says the Caribbean needs more than US$100Bn in investments for climate resilience and adaptation. The sum is equal to about one-third of the region's annual economic output.
• The Caribbean is the most exposed region to climate-related natural disasters. Moreover, with electricity largely generated using fossil fuels, energy prices in the Caribbean are among the highest in the world, highlighting the need for investment in lower-cost and lower-carbon energy production.
• In a publication this week, the multi-lateral agency ranked the Caribbean region as the most vulnerable to natural disasters.
• The region is estimated to have realized an average cost of loss and damage due to natural disasters, at about 2.5% of gross domestic product for the period 1980 to 2020, and is ranked just ahead of the Pacific region, with the average estimate of losses being just above 2% of GDP for the same period.
• The IMF says the Caribbean continues to experience a shortfall in climate financing, with the current level of private climate funding being woefully inadequate. It says there is progress, however, with several initiatives, including the issuance of blue bonds, combined with debt-nature swaps for debt service reduction, which opens fiscal space for nature conservation investments.
• With Caribbean countries having only been approved for about US$800Mn from climate funds such as the Green Climate Fund, Global Environment Fund, and Adaptation Fund, the IMF says much more support is needed.

(Sources: IMF & RJR News)

• Brazil's central bank joined on Thursday, June 29, a wave of recent upward revisions for the country's economic growth this year, guided by a solid first quarter boosted by the agriculture sector.
• In its quarterly inflation report, the central bank forecasts a 2.0% expansion in gross domestic product (GDP) for 2023, up from the 1.2% estimate in March.
• The figure came slightly below the 2.18% growth expected by private economists in a weekly survey conducted by the bank and remains weaker than last year's 2.9% GDP expansion.
• "The revision mainly reflects positive surprises in some industrial and service sector activities in the first quarter, in addition to improved forecasts for agriculture," said the report.
• The central bank emphasized that the outlook ahead points to an economic slowdown as the cumulative effects of domestic monetary policy and the influence of global growth deceleration take hold.
• Following last week's decision to maintain interest rates at a cycle-high of 13.75% for the seventh consecutive policy meeting, the central bank reinforced in the report that its future actions would be data-dependent, focusing on inflation dynamics and expectations.
• The minutes from the decision indicated that most policymakers see the possibility of a "parsimonious" rate cut at the next meeting in August, contingent upon consolidating a more benign inflation scenario.

(Source: Reuters)

• Q1 real GDP growth was revised up from 1.4% to 2.0% on stronger consumer spending and net exports. Q2 growth is also tracking close to 2%. The Fed is attempting to slow an economy with considerable momentum and recent data (including lower jobless claims released simultaneously with GDP revisions) suggest policy may not yet be sufficiently restrictive to do so.
• The revision was largely due to stronger services spending which was revised up from 2.5% to 3.2%. Also contributing to the upward revisions were stronger exports and weaker imports. Real final private domestic demand is now up a remarkable 3.2% QoQ annualized in Q1, the strongest reading since the immediate reopening period in early 2022.
• Consistent at around 2%, real GDP growth together with a pace of job gains around 300k/mth and a resurgent housing sector does not point toward a near-term recession. Consumer spending is proving to be much more consistently robust than contemplated in most forecasts, including Citi’s. Services spending in particular continues to run at a very strong rate and that does not seem to be slowing over the summer.
• The strength in consumer spending is particularly notable, given that consumers have run through roughly half of the estimated ~10% of nominal GDP in “excess savings.” Higher interest rates seem to be having little moderating effect on consumer spending. Even housing activity has picked back up despite mortgage rates that moved up from 3% to between 6% and 7%.

(Source: Citi Research)

• Kingston Properties has said it is looking to monetize more assets in a bid to streamline operations. CEO Kevin Richards said in addition to other projects already exited, the company is looking to sell property in New Kingston, a deal it hopes will be concluded shortly.
• He noted that the company has already monetized condos it had in Florida and is looking to do the same with others.
• It was further highlighted that the company will be shifting its strategy towards a more dynamic one which would mean a reduction in its holding period. Typically, the company holds property for 5 to 7 years, however, there are some that the company will hold for a shorter period.
• The company is also considering more construction opportunities based on current market trends. Currently, demand mainly exists in the warehousing and flex space (a combination of warehouse and office spaces), and as such the company is looking for those opportunities in Jamaica, the Cayman Islands, and as far away as Europe.

(Source: RJR News)

• With 42% of the expenditure of a visitor being on food, Tourism Minister, Hon Edmund Bartlett, is inviting local investors to build the capacity of Jamaica for it to become “a real strong foodie destination”.
• The Minister made the call in an interview with JIS News at an event dubbed ‘Come Back to Craving’, held at the Devon House Mansion in Kingston on June 21, where a group of local and international journalists were treated to a unique gastronomy experience.
• He noted that Devon House was designated as the Gastronomy Centre of Jamaica and the Caribbean, and as a result, the Ministry of Tourism has been developing a Gastronomy Policy.
• Currently, gastronomy is a huge driver of the Jamaican tourism experience and the country has the potential to bring a new element of tourism demography into the destination.
• Minister Bartlett highlighted that the Jamaican story is strong and compelling, and as more people are brought to the destination, they will create consumption patterns that are new and varied, and Jamaica has the capabilities to present the food types that will respond to these different consumption patterns. This would allow the country to appeal to a new tourist demography and ultimately increase arrivals.  

(Source: JIS)

• An index evaluating Latin American countries' ability to weed out corruption showed most countries moving backwards, according to the ranking released on Tuesday, June 27.
• The 2023 Capacity to Combat Corruption (CCC) Index, published jointly by Americas Society/Council of the Americas (AS/COA)) and Control Risks, covers 15 countries, which together represent 96% of Latin America’s GDP, pointed to a decline in the region's average score for the first time since 2020.
• Looking at 14 variables, including the independence of judicial institutions and the strength of investigative journalism, the CCC Index "relies on extensive data and a proprietary survey conducted among leading anti-corruption experts" to score and rank countries on a 0-10 scale.
• Notably, two of the 15 countries, Guatemala (2.86) and Venezuela (1.46), saw significant declines in their scores in 2023, and one country, Panama (5.39), saw a material improvement. Guatemala and Mexico (5.39) are the only two countries whose overall scores have decreased every year since the Index was released in 2019.
• Latin America's largest economy, Brazil (4.83), ranked 8th, with its score improving by 1.5% from 2022. The region's second-largest economy, Mexico, ranked 12th, showing "pronounced downgrades" in the civil society and media categories as Mexican journalists face "the world's highest rate of violence against reporters outside Ukraine," the report said.
• Uruguay (6.99) ranked first again, but registered a consecutive year of decline, a sign "that no country is immune from either stagnation or regression in the fight against corruption," the index said.

(Source: Reuters & AS/COA)

• The National Energy Corporation of Trinidad and Tobago Ltd has launched a pilot project with the Bermudez Biscuit Company Ltd aimed at improving energy efficiency in this country's local manufacturing sector.
• “If successful on a national level, the Super Energy Service Companies (ESCOs) initiative would be a self-sufficient and profitable enterprise that can help reduce Trinidad and Tobago's energy consumption substantially over a five-year period”, National Energy stated in a release.
• Both companies signed a Letter of Interest at Bermudez's Offices, taking the lead as the first manufacturing entity to participate in the pilot project.
• During the first phase of the Project, National Energy will conduct a Level One walk-through energy audit of Bermudez to 1) define the project scope and 2) estimate potential energy savings that will assist with the preparation of an Energy Feasibility Study and Concept Report.
• 'Following this stage, both companies will finalise the implementation of energy efficiency (EE) and renewable energy (RE) measures at Bermudez,' the release stated.
• Commenting on the launch of the Super ESCO initiative, National Energy President, Dr Vernon Paltoo, stated that 'the Project signifies yet another exemplary collaboration between the public and private sector, working together towards the common goal of achieving a sustainable energy future for Trinidad and Tobago. This project also plays a pivotal role in facilitating this country's transition towards a low-carbon future.'

(Source: CariCris)

• Federal Reserve Chairman Jerome Powell talked tough on inflation Wednesday, saying at a forum that he expects multiple interest rate increases ahead and possibly at an aggressive pace.
• “We believe there’s more restriction coming,” Powell said during a monetary policy session in Sintra, Portugal. “What’s really driving it is a very strong labour market.” The comments reiterate a position taken by Powell’s fellow policymakers at their June meeting, during which they indicated the likelihood of another half percentage point of increases through the end of 2023.
• Assuming a quarter point per meeting, that would mean two more hikes. Previous comments from Powell pointed to a possibility of the rises coming at alternate meetings, though he said Wednesday that might not be the case depending on how the data comes in.
• “I wouldn’t take, you know, moving at consecutive meetings off the table,” he said during an exchange moderated by CNBC’s Sara Eisen. The question-and-answer session took place at a forum sponsored by the European Central Bank.
• Central to the Fed’s current thinking is the belief that the 10 straight rate hikes haven’t had time to work their way through the economy. Therefore, officials can’t be sure whether the policy meets the “sufficiently restrictive” standard to bring inflation down to the Fed’s 2% target.
• “There’s a significant possibility that there will be a downturn,” Powell said, adding that it’s not “the most likely case, but it’s certainly possible.”
• Asked about banking stresses, Powell said the issues in March that led to the closure of Silicon Valley Bank and two other institutions did weigh into this thinking at the last meeting. Though Powell repeatedly has stressed that he considers the general state of the U.S. banking industry to be solid, he said the Fed needs to be mindful that there could be some issues with credit availability. Recent surveys have shown a general tightening in standards and declining demand for loans.

(Source: CNBC)

• Nearly 2.5 million households in Britain are at a "high risk" of financial vulnerability or other problems and may need support to pay their bills, according to a new study tracking the impact of the cost-of-living crisis. The analysis is based on the number of households that are registered with the Vulnerability Registration Service (VRS) - which notifies companies of financial problems affecting their clients - and extrapolated across the country's population.
• Produced by the VRS and data firm Outra, the study predicted that in addition to the 2.4 million households at "high risk," 6.3 million were at an "elevated" risk of vulnerability, meaning they may need some support to pay their bills. There were an estimated 28 million households in the United Kingdom in 2022.
• Britain is undergoing the biggest squeeze on living standards since records began in the 1950s as wages fail to keep up with soaring inflation, which will intensify as mortgages and rents increase on higher borrowing costs.
• So far, corporate results and official data suggest most consumers have managed to keep up their pace of spending, with savings built up during the COVID pandemic above their 2019 levels and the unemployment rate close to its lowest since 1974.
• However, the extent of inflation's toll on consumers was laid bare in official retail figures last week which showed spending in value terms in May was 17% higher than in February 2020, shortly before the pandemic hit.
• Finance Minister Jeremy Hunt met regulators on Wednesday to discuss what they were doing to prevent profiteering by companies. A new Consumer Duty comes into force on July 31, setting new standards of consumer protections, including for those deemed to be vulnerable.

(Source: Reuters)