• Fitch Solutions forecasts the Banco Central de Costa Rica (BCCR) will maintain its policy interest rate at 0.75% in 2021 and then hike by 50 basis points (bps), to 1.25%, in 2022 as global monetary policy tightens and unemployment falls closer to pre-pandemic levels.
• As the US Federal Reserve (Fed) begins to raise interest rates in 2022 and 2023, it will prompt the BCCR to also hike rates to maintain a competitive real interest rate differential.
• Costa Rican inflation will rise to 2.4% y-o-y by end-2021, from 1.0% at the start of the year, and average 2.9% in 2022, as rising oil prices drive up transport prices in the coming quarters. The projected rise in inflation is within the BCCR’s target range of 2.0% to 4.0%.

(Source: Fitch Solutions)

• Private equity dealmakers are descending on Berlin for their annual get-together, with their industry thriving and many of them wondering how long the good times will last.
• Armed with billions of dollars, buyout firms have already taken advantage of what has been a record year for mergers and acquisitions (M&A), selling some of their assets for top dollar.
• Private equity-backed M&A deals more than doubled to a record $818.4 billion in the first nine months of this year, up from $315.2 billion last year, according to Refinitiv.
• The S&P private equity index, meanwhile, is up 43% so far this year, compared with a 25% gain in the benchmark S&P 500. In addition, the private equity industry's median internal rate of return was 33% as of March 2021, the highest on record, according to data provider Pitchbook.
• Given the global trend, there exist opportunities locally for private investing, both from the fund and investor perspectives. There are opportunities for PE investors to acquire stakes in companies in growth sectors such as E-commerce, Information Technology, and Business Process Outsourcing, as well as in depressed sectors such as Entertainment and Tourism.
• Consequently, investors with a higher risk appetite looking to diversify their portfolio holdings may find value from private equity funds relative to traditional equity investments. Though private equity has its risks, as an investment asset it has the potential to provide strong returns, offer diversification, and could improve the resilience of investment portfolios.

(Sources: Reuters & NCBCM Research)

• Prices paid to U.S. producers accelerated in October, largely due to higher goods costs, fueling concerns about the persistence of inflationary pressures in the economy. 
• The producer price index for final demand increased 0.6% from the prior month and 8.6% from a year earlier, matching forecasts, Labour Department data showed Tuesday. Excluding the volatile food and energy components, the so-called core PPI rose 0.4% and was up 6.8% from a year ago.
• The report underscores how transportation bottlenecks, materials shortages and increasing labour costs have sent prices soaring across the economy in recent months. And with ongoing supply-chain challenges anticipated to linger into 2022, sustained price increases at the producer level presage additional consumer price increases in the coming months.

(Source: Bloomberg)

• The Bank of Jamaica’s Financial Policy Committee indicated that, notwithstanding the on-going effects of the COVID-19 pandemic, the Jamaican economy showed signs of improvement during the June and September 2021 quarters. In this context, the performance of the financial system improved during the review period. The financial system continued to be well-capitalised and reflected improvements in liquidity and profitability. This observation was made in the Committee’s review of the financial system’s performance and risks. 
• Credit growth during the June and the September 2021 quarters was generally muted. The financial system also did not demonstrate any significant change in institutions’ exposure to selected sectors. The sector continued to report good asset quality even as the stock of loans under moratoria provided by banks continued to fall as payment accommodations expired. Financial institutions remained largely resilient to simulated financial shocks and there were no notable changes in contagion risks. 
• Uncertainties remain about the duration of the COVID-19 pandemic and its impact on households and businesses. Consequently, the supervisors of the financial system will continue their enhanced monitoring to ensure that the system remains sound.

(Source: BOJ)

• Minister of and Health Wellness, Dr. the Hon. Christopher Tufton, on Sunday, November 7, announced that almost three weeks ahead of target, Jamaica has administered one million COVID-19 vaccine doses. 
• The Minister, who on Saturday was in Falmouth participating in a house-to-house vaccination tour, said he is heartened by the kind of response the Ministry has been getting from the vaccination blitzes, adding that this is certainly a step in the right direction. 
• Reaching one million doses is a psychologically significant development and it shows that more Jamaicans are coming on board. This milestone indicates that probably 23% to 24% of the targeted population has been fully vaccinated and the government is now moving ahead to get as many persons vaccinated as possible in coming weeks. 
• A key focus is the vaccination of children and the Ministry wants to appeal to parents and guardians to give as much support as possible, especially when the first dose of the Pfizer vaccine is administered to children, to try and get them back into the schools. 
• The Minister also reiterated that following directives from the World Health Organization, booster shots (third doses) will be available for persons with serious illnesses such as cancer, cardiovascular disease, diabetes and other pre-existing medical conditions. This he said will be given to those who have had the two doses of the Astra Zeneca or Pfizer and in the case of the singular Johnson and Johnson one additional shot.

(Source: JIS News)

• The Central Bank of the Bahamas (CBOB) says inflation has risen to 0.90 percent up from 0.88 percent within the period of June 2020 to June 2021. 
• The bank recently reported that crude oil prices continued to rise this year, following unprecedented lows in 2020, with prices of goods and services rising in most categories to date. 
• According to the central bank's monthly economic and financial developments in September there was a 42.3 percent increase in crude oil prices from January to September this year to B$72.94 a barrel. 
• Consequently, average clothing and shoe prices rose 12.7 percent, despite falling to 8.4 percent last year.  Additionally, miscellaneous goods and services (2.7 percent), food and non-alcoholic beverages (2.3 percent), and housing, water, gas, electricity and other fuels (1.3 percent) recorded an increase in average costs following a year-on-year decline.

(Source: The Central Bank of the Bahamas)

• Remittances and the tourism sector have generated income to the Dominican Republic Government of US$11.9 billion in the first nine months of 2021. 
• According to data from the Central Bank of the Dominican Republic (BCRD), tourism revenues stood at US$3.8 billion, 90.2% above the January-September 2020 record. 
• Likewise, during the first nine months of the year, remittances reached US$7.9 billion, 34.4% more than in January-September 2020 and 48.5% above the same period of 2019. 
• 85% of the remittances received in the country come from United States, 6.7% Spain, 1.0% Haiti, among others. Official data indicate that since 2010, citizens in the Dominican Republic received a total of US$66.3 billion, 2020 was the year that more remittances were issued to the country. However, 2021 is on pace to exceed it. 
• This strong performance will support IMF’s 9.5% projected growth for 2021. Further, tourism inflows will bolster government revenues and help to narrow the fiscal deficit to 4.4% in 2021 from 8.0% in 2020.

(Source: Dominican Today & NCBCM Research)

• Fitch Solutions’ forecast for global growth in 2021 edged lower in November to 5.5% from 5.6% in October, largely on the back of several downward growth revisions to the US (6.0% to 5.6%), Germany (3.7% to 2.8%), Spain (6.8% to 5.0%), Mexico (6.0% to 5.7%) and Saudi Arabia (3.0% to 2.8%). 
• These downward revisions were partially offset by upward revisions to several large economies, including France (5.9% to 6.8%), Italy (4.6% to 6.2%), Malaysia (0.0% to 1.5%), Russia (3.4% to 3.8%) and Turkey (6.3% to 8.3%). Fitch’s global growth forecasts for 2021 (5.5%) and 2022 (4.2%) remain slightly below consensus estimates of 5.9% and 4.5% respectively. 
• The latest high frequency and GDP data pointed to a slowdown in economic activity in Q321 due to a combination of less favourable base effects, supply chain-related challenges and new COVID-19 outbreaks, which forced several economies to re-impose partial restrictions. 
• Moreover, the recent increase in energy prices has weighed on output in a number of economies, further curbing growth momentum. The good news is that the latest purchasing managers' index (PMI) readings show that activity started Q421 on a stronger footing, pointing to a still-strong global economic performance in the last quarter of 2021.

(Source: Fitch Solutions)

• Banks largely eased credit standards for businesses, commercial real estate investors and households in the third quarter of the year, as the U.S. economy weathered the latest wave of the coronavirus pandemic, a Federal Reserve survey reported on Monday. 
• The Fed's Senior Loan Officer Survey, offering evidence of continued momentum for the economy, said banks "generally reported having eased standards" for business loans by lowering rates, expanding credit lines or imposing less restrictive terms. 
• The banks "cited a more favourable or less uncertain economic outlook" as well as more competition among lenders and "an increased tolerance for risk" amid general improvement in markets and the economic outlook, the Fed reported. Demand for loans was also up, particularly among middle-sized and larger firms.

(Source: Reuters)

• Jamaica has been removed by the United States Centers for Disease Control and Prevention (CDC) from its level-four “Avoid Travel to this Destination” risk assessment, which is a very positive development for our tourism sector. 
• The Minister of Tourism commended the health authorities and the people of Jamaica for working to bring down the rates of COVID-19 infections and hospitalisations, which augurs well for Jamaica’s risk assessment rankings. He noted that beyond that, the Resilient Corridor remains a very safe space for visitors and workers alike with comparatively high vaccination rates and extremely low infection rates. 
• Jamaica is now ranked at level three, which urges US travelers to be fully vaccinated before travelling. Despite CDC risk assessments, Americans by and large continue to travel to destinations they want to visit. 
• Bartlett said there is no room for complacency. Jamaica will continue to follow and be guided by international standards relating to the COVID-19 protocols, ensuring that its economy and tourism sector can get back to normal as quickly as possible. 
• This development will certainly complement the efforts being made to boost tourist arrivals including the increase in air traffic by airline companies such as Frontier. It will also aid in the overall recovery of the tourism sector and the wider economy. Currently, Jamaica is projected to welcome 1.57Mn and 3.2Mn tourists in 2021 and 2022, respectively and will be “well on its way to recovery” in 2023 with an anticipated 3.7 million visitor arrivals and inflows of US$3.7 billion.

(Source: JIS News & NCBCM Research)