• Trinidad and Tobago's (T&T’s) economy is beginning to recover, the International Monetary Fund (IMF) said, citing stability, low inflation and renewed investor interest at the close of its 2026 Article IV review. The assessment followed a two-week official visit by an IMF staff team led by Ana Guscina, which concluded with a meeting on February 9, 2026, with Minister of Finance Davendranath Tancoo.
• According to the IMF, T&T’s economy is gradually recovering to pre-pandemic levels amid persistent headwinds. The non-energy sector, particularly manufacturing and services, has underpinned recent growth, but stagnant production in the mature energy sector has weighed on activity. Economic growth is therefore expected to remain subdued in the near term before gradually recovering over the medium term.
• The economy is estimated to have grown by 0.8% in 2025, driven by non-energy sectors. Furthermore, real GDP growth is projected to moderate to 0.7% in 2026, as stronger growth in the non-energy sector partly offsets an anticipated decline in energy production. That said, medium-term growth prospects are expected to improve as several new energy projects, most notably Manatee, come onstream, lifting growth to around 2.9% in 2027 and 3.5% in 2028. Inflation is also projected to remain low and hover around 2% in the near to medium term, broadly in line with international trends.
• The current account (CA) balance remains in surplus, though the external position has weakened, and foreign exchange (FX) shortages persist. Foreign reserves remain adequate, with coverage at 6.4 months of prospective imports. Furthermore, the Heritage and Stabilisation Fund (HSF) assets continue to provide an additional sizeable buffer (US$6.38Bn as of February 2026). Looking ahead, the CA surplus is expected to improve to 3.0% of GDP in 2025, reflecting a modest increase in energy exports and a decline in goods imports. Over the medium term, the CA surplus is projected to average about 4% of GDP. However, the CA is assessed as moderately weaker than fundamentals.
• In terms of fiscal performance, the FY2026 (fiscal year ending September 30, 2026) budget introduces important measures to strengthen fiscal revenues, fiscal management, social protection, and economic diversification. However, the IMF noted that stronger fiscal consolidation is needed to place public debt on a firmly declining trajectory, rebuild policy buffers, and safeguard market access. The agency projects an overall deficit of 5.0% of GDP for FY2026, a slight improvement compared to FY2025 (5.5%). Achieving the authorities’ 2.2% of GDP fiscal balance target will require additional fiscal measures amounting to 2.8% of GDP. 
• Assuming an unchanged exchange rate regime, the IMF suggests targeting a 3.5% of GDP fiscal deficit in FY2026, by implementing 1.5% of GDP in additional high-quality measures. Some of the suggested measures include broadening the tax base by phasing out extensive zero ratings and exemptions in the value-added tax (VAT), accelerating the removal of untargeted utility subsidies while protecting the vulnerable households, streamlining transfers to state owned enterprises (SOEs), and improving the efficiency and quality of public expenditure. Such still sizeable and frontloaded adjustment will put debt on a firmly downward path and reduce vulnerabilities, while the emphasis on base broadening, efficiency, and targeting would help mitigate the impact on near-term growth.

(Source: IMF)

• Brazil is scrutinising a trade agreement announced by Washington on Friday, February 6, 2026, between the United States and Argentina due to concerns that it violates the rules of the South American trade bloc Mercosur^[1]. At first reading of the document released by Washington, it appears to go beyond the limits set for bilateral deals by Mercosur members, according to sources.
• To strengthen the negotiating power of the bloc, Mercosur restricts how far members can go in signing their own trade pacts with third countries. Last year, amid global trade tensions sparked by U.S. President Donald Trump, Argentina sought and obtained a temporary expansion of exemptions to the bloc's common external tariff. Brazil and Argentina were granted 150 exceptions each, while Uruguay and Paraguay received larger quotas.
• Asked about Brazilian scrutiny of the deal, an Argentine official said, "The tariff reductions announced for U.S. products fall within the list of 150 exceptions that Argentina is entitled to." But Brazilian officials told Reuters the new U.S.-Argentine agreement appears to cover closer to 200 items.
• The bilateral trade pact may also run into other non-tariff issues, such as Mercosur's rules of origin for goods, services and technical barriers. The move by Argentine President Javier Milei, one of Trump's closest allies in the region, to initiate unilateral talks with Washington would make it difficult to accommodate the deal within last year's exceptions.
• At a Friday press conference, when asked if Mercosur could obstruct the deal, Argentine Foreign Minister Pablo Quirno said the trade bloc does not stop members from such agreements. He noted that Milei could implement parts of the deal by decree, although the overall trade and investment pact would require congressional approval.
• Mercosur, founded 35 years ago, has faced repeated strains as members have sought to expand trade ties independently, though none has previously gone ahead with a side deal.
• Uruguay nearly signed a free trade agreement with the United States in 2006 before backing off over fears it could face expulsion from the bloc. The country has also pursued an FTA with China, generating friction with Argentina, Brazil and Paraguay. In 2019, under former Brazilian President Jair Bolsonaro, then Finance Minister Paulo Guedes threatened to leave the bloc, accusing it of holding back Brazil's trade ambitions. Neither Bolsonaro nor his leftist successor, Luiz Inacio Lula da Silva, has taken any formal steps to break with Mercosur.

(Source: Reuters)

^[1] Mercosur (Southern Common Market) is a South American economic and political bloc, established in 1991 to promote free trade and regional integration. The full member countries are Argentina, Brazil, Paraguay, Uruguay, and Bolivia. Venezuela is a member but has been suspended since 2016, while several other South American nations are associated members.

• The recent depreciation of the US dollar has coincided with a marked and widening divergence in consumer confidence dynamics across major developed market (DM) economies. Over 2025-26, US consumer confidence weakened sharply, falling well below its long-run average and deteriorating more severely than in both the Eurozone and the UK.
• US consumer sentiment, as measured by the Consumer Confidence Index (z-score), declined steadily from -0.42 in January 2025 to -1.91 by January 2026, interrupted only by brief and shallow mid-year improvements, the normalised readings show. The decline reflects rising household pessimism about business conditions, inflation pressures, and labour-market conditions, as the share of respondents reporting jobs as “plentiful” has continued to fall.
• What distinguishes the US from its peers is that the deterioration appears less attributable to conventional financial-conditions channels, and more to a combination of elevated political uncertainty, tariff-related concerns, and a clear softening in hiring momentum. Consistent with this interpretation, US job gains in 2025 were the weakest outside a recession since 2003.
• By contrast, Eurozone confidence has shown tentative but increasingly broad-based stabilisation. Although still negative, sentiment improved through late 2025 and into early 2026, reaching -12.4 in January 2026, the highest level in nearly a year and well above mid-2025 lows.
• The European Commission reports that confidence rose by 0.8 points in January 2026, supported by better household assessments of their financial situation and the outlook for major purchases, even as overall sentiment remains below long-run norms. Meanwhile, the UK follows a different trajectory. Data show sentiment gradually improving from -0.24 in January 2025 to +0.32 in January 2026, placing the UK clearly above both the US and the euro area in normalised terms. This suggests modest stabilisation in personal-finance expectations, even as views on the broader economic outlook remain cautious.

(Source: BMI, A Fitch Solutions Company)

• U.S. tariffs are weighing on eurozone growth and inflation, but the most affected sectors are also sensitive to interest rates, so cutting borrowing costs could offset the downward price pressures.
• The U.S. imposed tariffs on most trading partners last year, and European Central Bank (ECB) officials have been studying their likely impact, often coming to opposing conclusions as trade barriers affect the economy on multiple levels. However, a study done by ECB economists concluded that the drop in demand due to tariffs outweighs any inflation-boosting supply effects, creating a drag on prices.
• Notably, trade data has been volatile over the past year as firms frontloaded purchases to avoid tariffs, which stand at 15% as a baseline for EU goods entering the U.S., then ran down stocks. However, in the latest three months for which data is available, eurozone exports to the U.S. are down about 6.5% from the same period a year earlier.
• These findings are significant since eurozone inflation fell to 1.7% in January 2026, below the ECB's 2% target, and some policymakers fear that inflation could fall further. The good news for the ECB is that sectors hit hardest by the tariff shock also respond most strongly to interest rate changes. These sectors include machinery, autos, and chemicals.
• Output may drop sharply due to tariffs but expands strongly in response to lower borrowing costs. "We find that this pattern holds for about 60% of the sectors we study – representing roughly 50% of total average euro zone industrial output and of total goods exports to the United States," the economists said.

 (Source: Reuters)

• Despite the effects of Hurricane Melissa on the broader economy, local manufacturers Wisynco Group Ltd. (WISYNCO) and LASCO Manufacturing Ltd. (LASM) both reported year-on-year earnings growth in earnings for the quarter ended December 31, 2025. Buoyed by robust revenue growth that outpaced its direct costs, Wysinco’s earnings jumped 49.1% to $1.48Bn, while LASM profits grew by a more modest and 5.4% to $698.19Mn.
• Wisynco generated revenues of $16.19Bn, reflecting the benefits of capacity expansion, the rollout of new product lines, including its brewed products at the start of the quarter, and a 14.0% growth in exports. In contrast, LASM experienced a 3.6% decline in revenues, primarily due to a one-week suspension of manufacturing operations following the passage of Hurricane Melissa.
• Notwithstanding the divergence in revenue trends, both companies recorded an expansion in gross margins, with Wisynco’s margin improving by 368 basis points (bps) and LASM’s by 68 bps. The introduction of higher-margin products, which enabled more effective absorption of overhead costs, drove wider margins at Wisynco. Meanwhile, LASM’s margin expansion was mainly driven by reductions in the cost of sales, which offset weaker topline performance.
• Operating expenses for Wisynco increased 16.3% to $4.09Bn, broadly consistent with its scale-up in activity. In contrast, LASM recorded lower operating expenses over the period, reinforcing the cost discipline that supported its earnings growth.
• Looking ahead, both companies remain well-established players locally and regionally and have contributed meaningfully to post-hurricane normalisation in supply chains. That said, Wisynco’s recent commissioning of its brewery is expected to be a key growth driver, complemented by sustained demand across its other product lines as the country rebounds. For its part, LASM is expected to continue to pursue efficiency initiatives aimed at strengthening margins and see modest growth in revenues, given that most of its products are consumer staples. As a result, both companies are likely to continue experiencing earnings growth in the near term.
• Wisynco’s stock has advanced 25.7% year-to-date, while LASM has edged down 1.2%, closing at J$23.42 and J$6.46, respectively on Monday. At its current price, Wisynco trades at a price-to-earnings (P/E) ratio of 18.0x, slightly above the Main Market Manufacturing & Distribution sector average of 17.6x, whereas LASM trades below the sector average at 10.0x

(Sources: JSE & NCBCM Research)

• On February 5, 2026, Fitch Ratings affirmed Jamaica's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook.
• The rating affirmation and Stable Outlook reflect expectation that although the economic damages and recovery costs from Hurricane Melissa will be large, leading to an economic contraction in 2025-2026 and a deterioration in fiscal metrics, the government will return to its fiscal consolidation efforts beginning in 2027.
• Despite considerable uncertainty regarding the impact of Hurricane Melissa, Fitch sees headroom at the current rating to accommodate the hurricane's expected short-term negative economic growth and fiscal metric implications.
• As a result of the economic damages, Fitch estimates an economic contraction of 1.5% in 2025, followed by a further 2.6% in 2026. Large hotels were largely insured and have been able to rebuild relatively rapidly, although much of the 2025-26 tourism season has been lost. The industry is expected to recover 85% of its capacity by May 2026 and 95% by year-end 2026, according to the Tourism Ministry.
• Tourism receipts, representing roughly 20% of GDP in 2024, are estimated to have declined by nearly 15% yoy in 2025, and are projected to fall by a similar level in 2026. However, Fitch expects remittances, which represented 16% of GDP in 2024, to rise substantially, partially offsetting tourism losses.
• Despite a projected $8.8 billion economic hit and a temporary rise in debt-to-GDP toward 70% by end 2026, Jamaica’s "BB-" rating is anchored by strong governance indicators, and a proven bipartisan commitment to returning to fiscal surpluses. Of note, Fitch projects that the government will run primary surpluses again in FY2027 to bring debt/ GDP back toward the target of 60%.
• Negative Rating Triggers include external shocks (e.g., natural disasters or a sharp fall in tourism) or medium-term fiscal loosening, such as spending pressures or revenue shortfalls, leading to a sustained rise in the debt-to-GDP ratio. While a positive rating action would necessitate improved public finances, including a decline in the debt-to-GDP ratio and interest burden, or a faster-than-expected economic recovery that accelerates debt reduction.

(Source: Fitch Ratings)

• The Dominican Republic’s current account is expected to remain largely stable in 2026 and narrower than historical run rates. BMI forecasts a current account deficit of 2.5% of GDP in 2026, edging up slightly from an estimated 2.2% of GDP in 2025. Still, this would represent an improvement over both pre- and post-pandemic averages of 3.5% of GDP in 2010–2019 and 3.9% of GDP in 2021–2024, respectively.
• The current account balance remained stable in the third quarter of 2025 (Q3 2025) compared with the previous quarter, while showing marked improvement from a year earlier. The deficit narrowed by 37.8% from US$3Bn to US$1.8Bn. Furthermore, preliminary Q4 2025 data from the Banco Central de la República Dominicana (BCRD) support the view that the current account deficit will remain relatively narrow through the end of 2025 and into 2026.
• While U.S. trade policy remains volatile and unpredictable, there remains little risk that the sovereign will be the subject of increased tariffs in 2026, given broadly stable relations between Washington and Santo Domingo and the U.S.’s ongoing trade surplus with the country. This, along with an upbeat precious metals price outlook in 2026, should support exports and the current account through terms-of-trade tailwinds.
• While risks to the overall sustainability of the Dominican Republic’s external sector are mitigated by buffers, including adequate levels of foreign-exchange reserves, the current account outlook is potentially more volatile. Although tourism ended 2025 on a strong footing, the outlook for Caribbean tourism is more muted, with the potential for storms, geopolitical tensions, and other headwinds to curb gains seen in 2025 and weigh on the services trade balance.
• Moreover, while higher gold prices provided a terms-of-trade boost in 2025, a correction in gold prices could lead to a deterioration in the current account in 2026. Finally, with growth set to accelerate in 2026, from 2.3% to 3.8%, expectations are for import demand to pick up, which should see the current account deficit expand modestly.

(Source: BMI, A Fitch Solutions Company)

• The Government of Guyana has set aside some GY$10.7Bn in its 2026 budget to finance its Gas-to-Energy (GTE) project. This year’s allocation comprises both local and foreign financing, according to budget documents laid in the National Assembly.
• According to the fiscal plan, GY$8.1Bn will be supplied through loan financing by the United States Export Import Bank (EXIM) while GY$2.6Bn will come from the national treasury. The 2026 Budget states that GY$258Bn has already been spent so far on the gas project, which, when completed, is expected to reduce the cost of electricity by 50%.
• After missing several deadlines, the government anticipates that the GTE project will be ready by the end of 2026. The project comprises a Natural Gas Liquids (NGL) facility, a 300-megawatt power plant and pipeline to transport the gas from the Liza Fields in the Stabroek Block to the Wales Development site, West Bank Demerara. Exxon completed the pipeline component of the project more than a year ago and is currently awaiting the other two elements to complete construction.
• The rising cost and lack of transparency in the project has been the subject of debate over the years with the government failing to produce a feasibility study to justify the country’s single largest investment to date.
• Nevertheless, the commissioning of the flagship GTE project by the end of 2026 is expected to reduce fuel import needs and improve electricity reliability, thereby supporting non-oil sectors, and adds to Guyana’s robust 2026 economic outlook. The project will also produce cooking gas at a cheaper rate, which the government says will aid in the reduction of the cost of living.
• Overall, real GDP growth in Guyana is expected to accelerate again in 2026 and to average 17.3% annually between 2026 and 2028. This will be driven by higher exports, with the impulse from the Yellowtail project lifting growth in 2026 and then continuing this trend, as the Uaru and Whiptail projects are due to come online over 2026 and 2027. That said, further delays to the GTE project, which was originally slated for completion in 2025, would keep fuel imports high and reduce the contribution of net exports to real GDP growth.

(Sources: Kaieteur News & BMI, A Fitch Solutions Company)

• India is in talks with Brazil, Canada, France and the Netherlands over deals to jointly explore, extract, process and recycle critical minerals as it broadens its global outreach to secure supplies of key raw materials. The focus would be on lithium and rare earths, and India would also seek access to mineral-processing technologies.
• Heavy reliance on archrival China, which dominates global supplies of many minerals and has advanced mining and processing technology, underscores the need for India to reach out to a range of countries as it accelerates its energy transition to cut emissions, mining experts said. However, from discovery to production, mining can take years, as exploration alone spans five to seven years and often ends without a viable mine.
• India aims to replicate elements of a critical minerals agreement it signed with Germany in January 2026, which covers exploration, processing and recycling, as well as the acquisition and development of mineral assets in both countries and in third countries. India has been scouting globally for critical minerals and has signed pacts with Argentina, Australia, and Japan, and is in discussions with Peru and Chile on broader bilateral agreements that also cover critical minerals.
• Canada's Prime Minister Mark Carney is expected to visit India in early March 2026 and sign deals on uranium, energy, minerals, and artificial intelligence. Canada's Natural Resources Department noted in a January 2026 statement that both sides had agreed to formalise cooperation on critical minerals in the coming weeks.
• India's expanding international engagement comes at a time when finance ministers from the G7 and other major economies met in Washington last month to discuss ways to cut dependence on rare earths from China.

(Source: Reuters)

• Japanese Prime Minister Sanae Takaichi renewed a pledge on Monday, February 9, 2026, to cut sales tax on food, after a historic election win brightened chances for stimulus measures that have rattled financial markets.
• Takaichi romped to victory in Sunday's poll, aided by a pledge to ease household living costs by suspending for two years the tax of 8% on food. "We must pull Japan out of excessively tight fiscal policy and a lack of investment," Takaichi told a news conference.
• In an apparent vote of confidence in Takaichi's fiscal policy, stocks swept to all-time peaks, while super-long bonds reversed early weakness. However, earlier, investors wary of uncertainty about how Japan, labouring under the developed world's highest debt burden, would fund the proposal, had triggered a selloff in government bonds, pushing the yen towards historic lows against other currencies.
• Takaichi's challenge is to find revenue to offset the tax suspension, which would cost about 5 trillion yen ($32 Bn) a year, or roughly Japan's entire annual budget for education. Her past hints at tapping non‑tax revenues have drawn attention to Japan's foreign exchange reserves of $1.4 trillion, held largely as ammunition for yen intervention. However, dipping into them too deeply could fuel fears that Japan might sell part of its U.S. Treasury holdings, a prospect in turn likely to unsettle markets and raise concern in Washington.
• Prolonged uncertainty over funding risks another bond market sell‑off, analysts warn, with investors already sensitive to Japan's deteriorating fiscal outlook. A sharp rise in government bond yields would increase the cost of servicing public debt that is roughly twice the size of Japan's economy. Additionally, worries over fiscal sustainability could also trigger further yen weakness, inflating import prices and broader inflation, which would dilute benefits to households from tax cuts.

(Source: Reuters)