• The Ministry of Housing, Urban Renewal, Environment and Climate Change is currently working towards ensuring that Jamaica can begin to benefit from incentives under the Reducing Emissions from Deforestation and Forest Degradation (REDD+) programme by early next year. 
• REDD+ was created by the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) to incentivize developing countries to reduce or remove forest carbon emissions by awarding them carbon credits, which can be sold in carbon markets. 
• Principal Director of the Climate Change Division in the Ministry, UnaMay Gordon, has said that they are hopeful that by February 2022, they will have a structure for REDD+ in Jamaica. A complementary proposal has been put forward to the Green Climate Fund for some additional funding to advance further on the work being done. 
• The preparatory work includes collaboration with other areas of Government such as the Ministry of Culture, Gender, Entertainment and Sport on matters such as utilizing forest reserves that are a part of Jamaica’s cultural heritage or are located in Maroon communities, for example. After successful implementation of the framework for REDD+, Jamaica will qualify to earn from reducing emissions and removing carbon from the air through forest carbon sinks.

(Source: JIS News)

• The Office of the Auditor General, in a report tabled in the House of Assembly yesterday, revealed that the financial support from the International Monetary Fund (IMF) was critical in providing the Bahamian government with sufficient cash to make it to the end of the 2019-2020 fiscal year, following what it termed “a collision of catastrophes”. 
• “The collision of both catastrophes, Dorian and COVID-19, put the Budget in a crisis, tax receipts going down and government payments increasing,” the report said. “The required $250m funding assisted in addressing the supply and demand shock, and having provision for the economic downturn. 
• Most importantly, the funding was vital in facilitating the urgent measures taken by The Bahamas with respect to socio-economic impact and public health resiliency. The $250m was essential in providing budgetary support and sustaining the healthcare and mitigation measures in response to COVID-19.

(Source: The Tribune)

• The Panama Canal, which marks 107 years of operations on Sunday, August 15, has continued to work uninterruptedly to provide services as a transit route for world trade despite the pandemic. 
• For the first nine months of the fiscal year 2021, the canal and reported total revenues of $2.13 billion, with a growth of $322 million or 11% compared to the same period last fiscal year. 
• The budget for the interoceanic highway for fiscal year 2021, which will be completed on September 30, estimates total revenues of $3,308.9 billion and contributions to the National Treasury of $1,760.3 billion. 
• Sustained strong performance of the Canal will support the 12.2% rebound in GDP expected this year as well as the reduction in fiscal deficit as revenues rebound from a recent slump, supported by expanding canal activity.

(Source: Newsroom Panama & NCBCM Research)

• Global inflation seems to have stabilized at around 4.0% in July 2021, according to Fitch Solutions estimates. This suggests that inflation could be in the process of peaking, which would be in line with the easing of base effects as well as improving supply-side conditions as economies re-open. 
• Across the largest 24 economies that Fitch tracks on a monthly basis, inflation readings painted a mixed picture. Over the past month, 13 economies saw inflation come in higher than their reading in the previous month, eight economies saw slightly lower levels of inflation and three remained unchanged. Moreover, the number of above-target readings only inched higher by one count (Colombia). 
• It views this as a sign that its expectations that inflationary pressures are in the process of peaking and will most likely see a decline towards the end of Q3 and in Q4 seems to be echoed by financial markets. Indeed, inflation expectations, as proxied by the swaps market, point to inflationary pressures that remain somewhat elevated but anchored around pre-pandemic levels. 
• That being said, the agency does not expect a rapid decline in prices given that large supply-demand imbalances will persist for several months, and base effects will continue to flatter the inflation readings for several months yet. This means that even though inflation is peaking, it will remain elevated compared to pre-pandemic levels.

(Source: Fitch Solutions)

• Britain's economy grew by a faster-than-expected 1.0% in June, the first full month of indoor service for many hospitality firms, and also helped by the healthcare sector due to a rise in routine medical checkups after the pandemic. 
• But the official data showed British gross domestic product remained 2.2% smaller than it was immediately before the pandemic struck the country, a reminder of the damage done by Britain's long coronavirus lockdowns last year. 
• The month-on-month growth for the overall economy in June was stronger than an increase of 0.8% expected in a Reuters poll of economists. Britain's huge services sector led the way, growing by 1.5% in June. Healthcare contributed the most to growth, as family doctors saw more of their regular patients due to an easing of coronavirus precautions, the Office for National Statistics said. 
• The International Monetary Fund expects Britain's economy to grow by 7% in 2021, the same as the United States, as it bounces back from last year's slump.

(Source: Reuters News)

• Influenced by an increase in revenue, Stationary & Office Supplies’ net profit grew by 167.6% for H1 2021 to $58.43Mn (EPS: $0.23). 
• Revenues improved by 16.7% ($78.76Mn), which was more than sufficient to cover the 6.7% ($16.39Mn), 15.6% ($22.01Mn) and 13.5% ($5.11Mn) increases in direct costs, admin expenses and selling and promotional costs. 
• Managements believes this improvement in performance is a good indicator that Jamaica’s economy is continuing to rebound and expects that as it progresses through the summer months, it will see the return of children to school, which will also help improve the sales of SEEK back to school products in the market. That being said, the rise in COVID-19 cases in recent weeks could delay the reopening of schools and a further rebound in revenues. 
• SOS’s stock price has appreciated by 61.2% since the start of the year and closed Wednesday’s trading session at $7.32 per share. At this price, the stock trades at a P/E of 27.1x earnings, which is above the Junior Market distribution sector average of 21.4x.

Source: (SOS Financials)

• In its recent country report, Fitch Solutions estimated that Jamaica’s real GDP growth will rebound to 4.4% growth in 2021, from an estimated 9.9% contraction in 2020, driven by increased tourist arrivals. Recovery will be concentrated in H221, as the continued spread of COVID-19 restrained tourism activity in H121, undermining both exports and private consumption growth. 
• Jamaica’s current account deficit is anticipated to flip to a surplus of 1.0% of GDP in 2021, from a deficit of 0.1% in 2020, on the back of strong remittance inflows and services exports. 
• The Bank of Jamaica will keep its monetary policy rate at 0.50% through to the end of 2021 in order to boost lending amid the economic fallout from the pandemic. The Jamaican dollar is also expected to continue to depreciate in the short term as the domestic tourism industry continues to operate below pre-pandemic levels, limiting the supply of US dollars in Jamaica as inflation climbs. 
• However, there are downside risks in Jamaica's slow vaccination programme and rising crime. Jamaica's violent crime rate was the highest in Latin America and the Caribbean in 2020. A lack of economic opportunities could push the crime rate higher in H221 and 2022, weakening foreign investment inflows. Any delays to the recovery of the tourism industry would severely curtail Jamaica's economic growth outlook.

Source: (Fitch Solutions)

• Officials in Barbados are continuing to ramp up efforts to woo investors to the island from several regions across the world. 
• Declaring that Barbados was open for business, Director of Investment and Marketing at Invest Barbados Renatta Mohammed said the country was ideal for investments out of Scotland, given the political, social and economic stability and healthcare system. 
• Speaking during a recent pre-information session in preparation for the hosting of a mission from Scotland in November this year, she urged potential investors to consider Barbados for their investment in a range of traditional and emerging sectors, pointing to the island’s regulations and highly-skilled workforce. 
• In unrelated news, Virgin Atlantic airline announced that it will run direct return flights between Edinburgh (the capital of Scotland) and Barbados from December. This will be Scotland's only direct service to the Caribbean.

(Source: Barbados Today & BBC News)

• Puerto Rico is set for a major update to its travel requirements — requiring vaccinations for all guests of hotels, guest houses and short-term rentals on the island. Beginning Aug. 16, vaccinations will be required for both employees and guests of all such properties.  
• Those not vaccinated must present a negative PCR or antigen test taken within 72 hours of the beginning of their visit. For unvaccinated travelers staying longer than one week, they must continue to present negative tests on a weekly basis.  
• Unvaccinated travelers who arrive without a test must upload a PCR or antigen test taken within 48 hours after arriving on the island — or they will receive a $300 fine. 
• This could deter some tourists from visiting slowing down the recovery in the sector and the economy, which Fitch Solutions expects to contract further by 1.0%. A failure by the US federal government to provide timely and sufficient funds for ongoing hurricane reconstruction and COVID-19 response efforts could push back the timeline for a recovery in growth in Puerto Rico. The federal government has delayed aid in the past due to concerns about corruption, though this risk has diminished under the US President Joe Biden administration.

(Source: Caribbean Journal & NCBCM Research)

• Fitch Solutions maintains a positive outlook over the medium term for global equities, but expects developed market (DM) equities to continue outperforming emerging market (EM) equities. This outlook is underpinned by the strong global economic recovery and still accommodative fiscal and monetary policy. 
• In the US in particular, Fitch expects that equity markets will be supported by strong economic and earnings data as well as the improving attractiveness of equities relative to bonds. However, the divergence in performance between most DM equities and most EM equities is likely to continue on the back of the two-speed economic recovery caused by uneven vaccination progress across the globe. 
• From a regional perspective, Asian equities look set to remain under pressure in the short term due to the continued spread of Covid-19 and slow vaccine rollouts.  Chinese equities will also continue to underperform in the short term due to Beijing’s crackdown on several sectors and downside risks to growth.

(Source: Fitch Solutions)