• According to the Statistical Institute of Jamaica’s (STATIN) Labour Force Survey, the unemployment rate for July 2021 was 8.5%. This is 4.1 percentage points lower than the 12.6% out-turn for the same period last year. 
• The survey shows that the number of unemployed persons went down by 49,200 or 30.4% to 112,500. The number of unemployed males fell by 43.4%, while the number of unemployed females declined by 17.5%. The unemployment rate for youth, aged 14 to 24, was 23.9%, 6.4 percentage points lower than the July 2020 out-turn of 30.3%. 
• Meanwhile, the ‘Construction’ and “Real Estate and Other Business Services’ industry groups accounted for more than 50.0% of the increase in the employed labour force. Some 118,300 persons were employed in the construction industry, representing an increase of 26,100 or 28.3%, with males accounting for 25,900 of this figure. In the real estate and other business services industry, there were 115,100 persons employed, an increase of 23.0%(21,500). Females accounted for the largest increase – 11,900 or 25.4%. 
• Other industry groups recording notable increases were ‘Accommodation and Food Service Activities’ – up 17,800 persons; ‘Agriculture, Forestry and Fishing’ – up 6,200 persons; and ‘Wholesale and Retail Trade, Repair of Motor Vehicles and Motorcycles’ – up 5,500 persons.

(Source: JIS News)

• According to Fitch Solutions, the JLP’s large majority has facilitated policymaking in recent quarters, including the smooth passage of a supplementary budget on October 12 that boosted emergency spending on the COVID-19 pandemic by JMD33.0Bn, equivalent to 5.6% of current expenditures in FY2020/21. The supplementary budget included cash transfers to those unemployed due to the pandemic and to incentivize vaccinations, food support and a bonus for healthcare workers. 
• While the supplementary budget will increase spending in FY2021/22 by 4.0%, Fitch maintains its view that the government will pursue fiscal consolidation in the medium term for three reasons. Notably, it expects the public debt will rise to 108.6% of GDP by end-2021 and that with limited access to international capital markets, the government will have to curtail spending. Despite austerity being politically unpopular, Fitch sees the government initiating fiscal consolidation in the medium term for two reasons. Firstly, throughout Jamaica’s two IMF programmes from 2013 to 2019, there was cross-party buy-in for reducing government spending and public debt. Secondly, elections are not constitutionally mandated until September 2025, giving the government several years to rein in spending before it faces voters. 
• That said, Fitch is revising down Jamaica’s score in its Short-Term Political Risk Index (STPRI) to 72.3 out of 100, from 74.2 previously, as a slow vaccination programme, and elevated inflation, unemployment and crime are raising risks to social stability. With only 19.2% of Jamaicans having received at least one dose of a COVID-19 vaccine as of October 19, Jamaica’s vaccination programme significantly lags other major Caribbean markets due to a limited supply and persistent vaccine hesitancy. 
• In addition, Fitch sees rising risks to social stability amid elevated inflation, unemployment, and violent crime pose. Inflation reached 6.1% in August, above the upper bound of the Bank of Jamaica’s 4.0-6.0% inflation target. Fitch forecasts that inflation will remain high in the quarters ahead, averaging 6.0% in 2022, the high end of the BOJ’s target range. At the same time, unemployment averaged 9.0% in Q221, above the 7.3% seen before the pandemic in Q120. The combination of elevated unemployment and erosion of household purchasing power increases the possibility of widespread protests against economic conditions.

(Source: Fitch Solutions)

• The government of Barbados is pouring cold water on the notion that there have been mass cancellations heading into the winter tourism season. In fact, Minister of Tourism Senator Lisa Cummins said based on reports she has received, bookings have placed the majority of hotels above 70 per cent capacity. 
• This is contrary to the cries of the Barbados Hotel and Tourism Association (BHTA), which earlier reported there were several cancellations. 
• Cummins was responding to a question from the DAILY NATION following the pomp and ceremony to herald the inaugural service of Irish airline Aer Lingus from Manchester, England, to Bridgetown at Grantley Adams International Airport yesterday. 
• She said since the announcement in June that Barbados was on the United Kingdom’s (UK) green list, forward bookings went up fourfold and there had been no abatement to this trend.

(Source: NationNews Barbados)

• Central Government fiscal results through September 2021 show a primary surplus of 0.3% of GDP and an overall deficit of 3.9% of GDP. 
• The primary surplus achievement is said to indicate the fiscal adjustment is on the right track and is a clear sign of the government’s commitment to fiscal sustainability according to Finance Minister Elian Villegas. 
• Minister Villegas also stressed that such commitment must be complemented by the progress of the IMF legislative agenda. This week the Legislative Assembly’s Economic commission endorsed the Customs Reform bill, one of the eight legislative initiatives that make up the IMF legislative agenda. 
• It is only the second bill of the IMF agenda to advance to the general Legislative Assembly floor, following the Public Employment. The bill intends to combat smuggling and tax fraud.

(Source: Oppenheimer)

• From port congestion and price spikes to widespread shortages, the stress in US supply chains is intensifying and could slow the economy in the coming months, Moody's Analytics warns. 
• To measure the logistical strains impacting the economy, Moody's recently created a US supply chain stress index that is made up of various metrics for production, inventory and transportation. 
• That index climbed to 135.9 in August, compared with pre-pandemic levels of about 100. Moody's said early signs point to another increase in the supply chain stress index for September, driven by further price increases. 
• The logistics nightmare is posing a real obstacle to the economic recovery from COVID-19. Hurt by a shortage of materials and workers, US industrial production unexpectedly fell in September, according to the Federal Reserve. Industrial production measures everything from manufacturing and mining to electric and gas utilities

(Source: CNN Business)

• Energy prices are expected to inch up in 2022 after surging more than 80% in 2021, fueling significant near-term risks to global inflation in many developing countries, the World Bank said in its latest Commodity Markets Outlook on Thursday. 
• The multilateral development bank said energy prices should start to decline in the second half of 2022 as supply constraints ease, with non-energy prices such as agriculture and metals also expected to ease after strong gains in 2021. 
• "The surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries," said Ayhan Kose, chief economist and director of the World Bank's Prospects Group, which produces the Outlook report. 
• The World Bank noted that some commodity prices rose to or exceeded levels in 2021 not seen since a spike a decade earlier. Natural gas and coal prices, for instance, reached record highs amid supply constraints and rebounding electricity demand, although they are expected to decline in 2022 as demand eases and supply improves, the bank said.

(Source: Reuters)

• Energy prices are expected to inch up in 2022 after surging more than 80% in 2021, fueling significant near-term risks to global inflation in many developing countries, the World Bank said in its latest Commodity Markets Outlook on Thursday. 
• The multilateral development bank said energy prices should start to decline in the second half of 2022 as supply constraints ease, with non-energy prices such as agriculture and metals also expected to ease after strong gains in 2021. 
• "The surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries," said Ayhan Kose, chief economist and director of the World Bank's Prospects Group, which produces the Outlook report. 
• The World Bank noted that some commodity prices rose to or exceeded levels in 2021 not seen since a spike a decade earlier. Natural gas and coal prices, for instance, reached record highs amid supply constraints and rebounding electricity demand, although they are expected to decline in 2022 as demand eases and supply improves, the bank said.

(Source: Reuters)

• The All-Jamaica Consumer Price Index (CPI) was 114.9, reflecting a 2.3% rise in consumer prices for September 2021. With the September outturn, the 12-mth point-to-point inflation rate was 8.2%, a significant increase from the 6.1% reported in August 2021 and puts inflation firmly above the BOJ’s 4-6% target range. 
• A 3.0% increase in the heavily weighted index for the “Food and Non-Alcoholic Beverages” division was a major contributor due in part to a 9.9% increase in the index for the class ‘Vegetables, tubers, plantains, cooking bananas and pulses. 
• Increases in the index for the divisions ‘Housing, Water, Electricity, Gas and Other Fuels’ (0.8%), ‘Transport’ (8.1%) and ‘Education’ (2.4%) also contributed to the overall inflation rate. 
• A 15.0% increase in bus, route taxi and hackney carriage fares granted by the Government also contributed to the rise in the index for the ‘Transport’ division. This movement was however tempered by lower petrol prices. Additionally, the index for the ‘Housing, Water, Electricity Gas and Other Fuels’ division moved upwards as a result of higher prices for electricity, water and sewage rates. 
• According to the Bank of Jamaica, inflation is projected to average between 5.5% and 6.5% over the next two years, above the previous projection of 4.8%. The inflation projection is driven primarily by a gradual rise in core inflation, supported by the lagged impact of higher international grains and shipping prices, a recovery in domestic demand and a temporary jump in inflation expectations.

(Source: STATIN and BOJ)

• The Port Authority of Jamaica (PAJ) has expressed confidence in increased cruise shipping activities across all cruise ports islandwide, on the heels of receiving four World Travel Awards. Jamaica is the recipient of the Caribbean’s Leading Cruise Destination 2021; Caribbean’s Leading Cruise Port 2021: Historic Port of Falmouth; Caribbean’s Leading Home Port 2021: Port of Montego Bay, and Caribbean’s Leading Tourism Development Project 2021: Historic Naval Dockyard, Port Royal. 
• President and Chief Executive Officer of the PAJ, Professor the Hon. Gordon Shirley, OJ, reminded cruise enthusiasts that there is great value to be obtained from an award-winning cruise destination like Jamaica. 
• He also expressed optimism in the expected return on investment in the upcoming season. With the investments the organization has made in cruise infrastructure this year, optimism is high that the calls for next year’s season will surpass those slated for this year. 
• Vice President, Cruise Shipping & Marina Operations at the PAJ, William Tatham, indicated that he is pleased with the progress of the PAJ’s cruise restart activities. Mr. Tatham also noted that many of the regular ships will return to Jamaica this season, including vessels from Disney Cruise Lines. 
• He pointed out that the Disney Fantasy is scheduled to call at the historic Falmouth Port in December. Mr. Tatham attributed numerous calls from the Disney Cruise Lines to a successful meeting with the company’s executives at the recently concluded Seatrade Cruise Global Conference, held in Miami in the United States. Cruise shipping is one of the PAJ’s core business segments that contribute significantly to the Jamaican economy.

(Source: JIS News)

• Exuma’s Chamber of Commerce yesterday said it is aiming to engage the Government over the “devastating” impact the island has suffered from losing “two-thirds” of its bank branches. 
• Pedro Rolle, the Chamber’s president, told Tribune Business it was impossible for Exuma to present itself to Bahamian and international investors as a modern, open economy unless there was sufficient access to “basic, functional commercial banking”. 
• With both Scotiabank and Bank of The Bahamas exiting Exuma within two years, he added that the island is now down to just one remaining commercial bank branch - Royal Bank of Canada (RBC). 
• Speaking after John Rolle, the Central Bank’s governor, revealed last week that bank branches in Grand Bahama and the Family Islands have shrunk by almost 40% in the seven years to 2021, the Exuma Chamber chief voiced doubts over whether electronic payments providers or the Sand Dollar digital currency will be able to adequately fill the void.

(Source: The Tribune)