• Jamaica’s current accounts surplus is expected to grow to 0.8% of GDP in 2021 and 0.6% of GDP in 2022, from a 0.1% deficit in 2020. In Q121, remittance inflows brought in USD742.0mn, which was enough to offset most of the goods trade deficit of USD770.1mn. It is expected that this trend will continue throughout 2021, resulting in Jamaica’s first current account surplus since 1994. However, moving into 2022, sustained import demand will begin outweighing the impact of service exports and remittances, narrowing the current account surplus. 
• The goods trade deficit is expected to continue to widen in 2022 as rebounding economic activity leads to import growth of 8.5%. Real GDP growth of 4.1% is expected in 2022, with a rebound in private consumption boosting goods import demand. In the year through May 2021, goods imports have grown 24.0%. Import growth should decelerate in the coming months as base effects fade, though Fitch still expects it to outweigh the 5.5% growth that it forecasts for goods exports. 
• Overall, the goods trade deficit will widen to USD3.6bn in 2022, up from USD3.2bn in 2020 and USD2.9bn in 2021, and will be the largest contributor to the narrowing of the current account surplus in the coming quarters.

(Source: Fitch Solutions)

• If sea level rise over the next 29 years goes unmitigated, Antigua and Barbuda’s coastline could be unrecognisable, causing a major blow to the country’s bread and butter industry – tourism, coastal settlements and other coastal developments, according to a recent report. 
• The report titled ‘360° Resilience: A Guide to Prepare the Caribbean for a New Generation of Shocks’ explained that the region has a history of dealing with major shocks from both economic and natural hazards, adding that the region’s specialisation in tourism and commodity exports disproportionately exposes islands to economic cycles due to changes in demand in the tourism industry and commodity prices. 
• “In the absence of adaptation, by 2050, countries like Trinidad and Tobago, Antigua and Barbuda, St Lucia, and the Bahamas will see a large proportion of hotels unable to profit from proximity to a sandy beach,” the report said. 
• The World Bank report explained that erosion to the sandy beaches that many countries in the region like Antigua and Barbuda are renowned for, “directly affects” the tourism sector’s profitability, adding that “even under a moderate CO2 emissions pathway, 13 percent of nearshore hotels will experience beach loss resulting in a 17 percent decrease in tourism revenue for the region by 2050”.

(Source: World Bank)

• Value-added tax (VAT) and excise tax collections grew by $8.9 billion, or 21.5 percent, when compared with the level at the end of June 2020. This is according to the Ministry of Finance Mid-Year Report. 
• The growth reflected in this area was primarily due to a $1.8 billion increase in VAT collections from imported goods and services, outweighing the $0.6 billion contraction in VAT collections from domestic supplies. 
• The figures undermine government’s stated commitment to reduce taxes and ease the cost of living during their elections campaigns. Moreover, the Guyana Revenue Authority (GRA) mere weeks ago complained about the “drastic reduction in filing of VAT returns by VAT Registrants”. 
• Earlier this year, a host of tax reductions were announced by Finance Minister, Dr. Ashni Singh. These included lowered water rates and removal of VAT on residential and individual data usage, as well as on certain food and household items. The Government had also promised no new taxes.

(Source: Kaieteur News)

• Britain's economic recovery from the coronavirus pandemic lagged behind that of other rich nations in the July-September period, according to official data on Thursday, which underscored the interest rate dilemma facing the Bank of England. 
• Gross domestic product grew by 1.3%, the weakest three-month growth since Britain was under lockdown in early 2021.The Bank of England and a Reuters poll of economists had forecast an expansion of 1.5%. 
• The Office for National Statistics said Britain's economy remained 2.1% smaller than it was at the end of 2019, a bigger shortfall than in fellow Group of Seven countries Germany, Italy and France. 
• The United States has already surpassed its pre-crisis size. Canada and Japan, the other G7 members, have yet to report third quarter growth data but had already regained more ground by the second quarter than Britain had achieved by the third quarter.

(Source: Reuters)

• OPEC on Thursday cut its world oil demand forecast for the last quarter of 2021 as high energy prices curb the recovery from COVID-19, delaying the timeline for a return to pre-pandemic levels of oil use until later in 2022. 
• The Organization of the Petroleum Exporting Countries in a monthly report also raised its supply forecast from U.S. shale producers next year, a potential headwind to the efforts of the group and its allies, known as OPEC+, to balance the market. 
• OPEC said it expects oil demand to average 99.49 million barrels per day (bpd) in the fourth quarter of 2021, down 330,000 bpd from last month's forecast. The year's demand growth forecast was trimmed by 160,000 bpd to 5.65 million bpd. 
• "A slowdown in the pace of recovery in the fourth quarter of 2021 is now assumed due to elevated energy prices," OPEC said in the report. OPEC also cited slower-than-expected demand in China and India for the downward revision.

(Source: Reuters)

• To reach the total number of formal and informal jobs that existed in the Dominican Republic before the pandemic, only 10,000 would be missing, according to data presented by the Minister of Economy, Planning, and Development (MEPYD), Miguel Ceara Hatton. 
• In the first quarter of 2020, formally and informally employed persons stood at 4,605.9Mn, and in the third quarter of 2021, employed persons reached 4,595.0Mn, down 0.24%. 
• Through a document issued, the MEPYD explains that the number of employed workers has increased. As of October 2021, formal contract workers exceed the employment level of February 2020. As a result, workers employed in the private sector recovered what was lost in 2020 and compensated for the reduction in formal public employment.

(Source: Dominican Today)

• A Cabinet minister yesterday conceded that Bahamians are becoming increasingly “alarmed” over the $10Bn-plus national debt and “systematic” action is needed to address it.
• Michael Halkitis, Minister of Economic Affairs, told the Senate in leading-off debate on the Speech from the Throne that the newly-elected Davis administration is “setting the foundation for sweeping fiscal reform”.
• Placing much emphasis on committees, namely the newly-established Debt Advisory Committee and Revenue Policy Committee, he indicated plans to change the fiscal culture within government, while acknowledging growing concern that the weak public finances could drag down the wider economy and entire country if not addressed.
• “Many Bahamians are alarmed by the level of our national debt,” Mr Halkitis said. “It’s something that must be addressed in a systematic manner and we are going about that.” Tribune Business revealed earlier this year that the $10.356bn national debt at end-June 2021 was larger than the size of the Bahamian economy, producing a 100.4% debt-to-GDP ratio.

(Source: The Tribune)

• Inflation across a broad swath of products that consumers buy every day was even worse than expected in October, hitting its highest point in more than 30 years, the Labour Department reported Wednesday. 
• The consumer price index, which is a basket of products ranging from gasoline and health care to groceries and rents, rose 6.2% from a year ago, the most since December 1990. On a monthly basis, the CPI increased 0.9% against the 0.6% estimate. 
• The data comes as policymakers such as Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen maintain that the current price pressures are temporary and related to Covid pandemic-specific issues. While they have conceded that inflation has been more persistent than they expected, they see conditions returning to normal over the next year or so. 
• Escalating inflation could cause the Fed to tighten policy more quickly than it has signaled. The central bank has indicated that it will within the next few weeks start reducing the amount of bonds it buys each month, though officials have indicated that interest rate hikes are still off into the future.

(Source: CNBC)

• China launched a sale of euro-denominated sovereign bonds on Wednesday aimed at raising 4 billion euros ($4.62 billion), three weeks after the country raised $4 billion via a U.S. dollar bond sale that drew robust demand. 
• China's Ministry of Finance is issuing the euro bond in three, seven, and twelve year tranches, according to a term sheet seen by Reuters on Wednesday. The Ministry said on Oct. 29 it will issue the debt in Hong Kong to raise 4 billion euros. 
• Beijing has been issuing sovereign bonds offshore regularly, in a bid to integrate China more closely into the global financial system, and build a price benchmark for overseas issuance of Chinese corporate bonds. It conducted similar euro bond sales last year and in 2019, when Beijing sold its first euro-denominated government debt in 15 years. 
• The euro bond sale comes as China's economy is slowing amid a power crunch and surging raw material prices, while China's dollar bond market has tumbled due to fears of contagion from China Evergrande Group's debt problems.

(Source: Reuters)

• As at the end of October 2021, Net International Reserves (NIR) stood at US$3,868.07Mn, a 4% (US$96.15Mn) decrease relative to September 2021.
• A 2.0% (or US$94.47Mn) decrease in total foreign assets and a 0.2% increase in foreign liabilities were behind the reduction.
• The NIR for October translated to 45.70 weeks of goods imports, which is lower than the 46.62 weeks reported at the end of September. It also translated to 32.62 weeks of goods & services imports at the end of October (33.27 weeks: September 2021). The drop in NIR and the slight decline in import coverage could likely be influenced by a rise in the estimated cost of imports as energy prices, input and freight costs have been rising.
• At the current level, Jamaica’s NIR remains well-above the international benchmark of 12-weeks of imports.

(Sources: Bank of Jamaica & NCBCM Research)