• European Union countries approved a weakened emergency plan to curb their gas demand on Tuesday, after striking compromise deals to limit the cuts for some countries, as they brace for further Russian reductions in supply.
• Europe will face an increased gas squeeze from Wednesday, when Russian's Gazprom plans to cut flows through the Nord Stream 1 pipeline to Germany to a fifth of capacity
• With a dozen EU countries already facing lower Russian supplies, Brussels is urging member states to save gas and store it for winter for fear Russia will completely cut off flows in retaliation for Western sanctions over its war with Ukraine.
• Energy ministers approved a proposal for all EU countries to voluntarily cut gas use by 15% from August to March.
• The cuts could be made binding in a supply emergency, provided a majority of EU countries agree to this. But countries agreed to exempt numerous countries and industries from the binding 15% cut, after some governments opposed the EU's original proposal to apply it to every country.

(Source: Reuters)

• The import duty on electric vehicles has been reduced from 30% to 10%, and purchasers of those vehicles will not have to pay licence fees over the next five years. 
• The House of Representatives approved the Customs Tariff (Revision) (Amendment) (No. 2), Resolution, 2022, and the Road Traffic (Licence Duties) Order, 2022, and Resolution on Tuesday (July 19) to give effect to the measures.
• Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, advised that the lower duty rates and the elimination of the licence fee requirement apply to electric vehicles that are three years old or less at the time of importation.
• It was noted that duties on motor vehicles are a major source of government revenue, with earnings of about $30Bn to $40Bn, and so the reduction of duties for electric vehicles had to be considered very carefully, seeing the government could not afford to completely cannibalize all of that revenue.
• These measures support the country’s transition from a high dependence on petroleum for motor vehicles by making it more affordable for Jamaicans to acquire electric vehicles. This will also support the government’s aim to achieve 60% reduction in Jamaica’s carbon dioxide emissions by 2030.

(Source: JIS News)

• Panama’s continuing national protest movement is expected to pose substantial risks to social instability as well as growth in the coming months. Following headline inflation increasing to 5.2% y-o-y in June—the highest since October 2012, with price increases for cooking oil and gasoline reaching 12.7% and 64.7%, respectively, protests broke out sporadically in early July.
• Considering this along with undelivered promises of anti-corruption reforms, the country is expected to see an increased risk of public unrest in the months ahead. Consequently, the sustained protest movement will dampen economic activity for at least several weeks, with future risks of protest remaining high. 
• In response to the public outcry, President Cortizo will increase subsidies for gasoline and basic goods like bread and cooking oil as well as higher social spending for low-income households. As a result, this will delay the country’s goal of achieving its fiscal deficit target of 4.0% in 2022 as laid out in its Fiscal Social Responsibility Law.
• Following the social instability, Fitch Solutions revised its Short and Long-Term Political Risk Indices. In the Short-Term Political Risk Index (STPRI), the ‘social stability’ sub-component was slightly revised down from 42.5 to 40.0, having been already lowered in mid-May in anticipation of further protests, bringing the headline STPRI score to 62.9 from 63.5.
• For the Long-Term Political Risk Index (LTPRI), the ‘characteristics of society’ and sub-components were lowered from 67.8 to 67.5 to account for high levels of poverty, driven primarily by a labour force with 48.3% of workers in the informal sector, where pay is low, benefits are not guaranteed and are not protected by certain labour rights and protections.

(Source: Fitch Solutions)

• Turkish officials say a deal on a U.N. plan to unblock the exports of Ukrainian grain amid the war and to allow Russia to export grain and fertilizers will be signed on Friday, July 22, 2022, in Istanbul.
• This plan would enable Ukraine to export millions of tons of grain that have been stuck in its Black Sea ports — a move that could ease a global food crisis that has sent wheat and other grain prices soaring. At least 22Mn tons of grain are stuck there due to the war.
• Last week, the sides met in Istanbul, reaching a tentative agreement on the plan. It foresees joint controls of ships as they leave and arrive at Black Sea ports, and a mechanism to ensure the safety of the transfer routes, Turkish officials said. A coordination center for the shipping of exports would be established in Istanbul and would include U.N., Turkish, Russian, and Ukrainian officials.

(Source: AP News)

• As the World Health Organization’s emergency committee convened on July 21, 2022, to consider for the second time within weeks whether to declare monkeypox a global crisis, some scientists said the striking differences between the outbreaks in Africa and in developed countries will complicate any coordinated response.
• There are now more than 15,000 monkeypox cases worldwide. While the United States, Britain, Canada, and other countries have bought millions of vaccines, none have gone to Africa, where a more severe version of monkeypox has already killed more than 70 people. Rich countries haven’t yet reported any monkeypox deaths.
• This week, U.S. officials said more than 100,000 monkeypox vaccine doses were being sent to states in the next few days, with several million more on order for the months ahead. The U.S. has reported more than 2,000 cases so far, with hundreds more added every day.
• Some U.S. public health experts have begun to wonder if the outbreak is becoming widespread enough that monkeypox will become a new sexually transmitted disease. Declaring monkeypox to be a global emergency could also inadvertently worsen the rush for vaccines, despite the mildness of the disease being seen in most countries.

(Source: AP News)

• Dolla Financial Services Limited (Dolla) advises that at a meeting of their Board of Directors held on July 15, 2022, approval was granted for the Company to raise up to J$1Bn in Bonds. 
• The Bonds are to be registered under the FSC Exempt Distribution Guidelines and are to be issued in favour of Accredited Investors as defined in the guidelines or to investors participating via the Minimum Purchase Amount exemption stated in the guidelines, with subscriptions amount of at least J$5Mn and J$10Mn, respectively.
• This follows the company raising J$500Mn through an Initial Public Offer (IPO) which was listed on the Junior market of the JSE on June 14, 2022. The IPO was oversubscribed by approximately 950% which indicates investor interest which the company is seeking to capitalize on. Dolla’s stock price has increased by 227.0% since the IPO and now trades at $3.27 at close of trading on Thursday July 21, 2022.

(Source: JSE News & NCBCM Research)

• The Development Bank of Jamaica (DBJ) is providing $1Bn to bolster the country’s agriculture sector through its new ‘AgriBiz’ facility.
• The programme, launched on Tuesday (July 19) at the Ministry of Agriculture and Fisheries in Kingston, will provide concessional loans for micro, small and medium-sized farmers. Farmers and agribusiness entrepreneurs will be able to access loans of up to $30Mn at 8.75% for up to 10 years.
• The agriculture sector, which currently employs more than 250,000 persons and accounts for 8.68% of gross domestic product (GDP) and foreign exchange, is contributing positively to the country’s recovery from external shocks and should continue on this trajectory through the AgriBiz programme.
• In addition to funding opportunities, the programme will also include technical assistance and financial training for farmers, which will be provided jointly with partners, Agro-Investment Corporation (AIC).
• The programme is intended to boost food security and the agriculture sector’s recovery from the shocks of the COVID-19 pandemic and the Russia-Ukraine war. This is expected to not only contribute to the country’s GDP but also reduce our dependence on other economies, especially in light of food shortages being experienced worldwide.   

(Source: JIS News)

• The Dominican Republic is expected to grow by 4.6% in 2022 and 4.8% in 2023, from 12.3% in 2021, on the back of a stronger than expected Q1 2022 (6.1% y-o-y) owing to the recovery of the tourism sector.
• The latter also supported a 32.2% expansion in exports, while fixed investments grew 8.4% benefitting from increased capital inflows into the tourism sector.
• However, it is expected that elevated inflation and a possible US recession will weigh on private consumption and weaker US growth could dampen investment inflows and external tourism demand. 

(Source: Fitch Solutions)

• The European Central Bank raised interest rates by more than expected on Thursday (July 21), confirming that concerns about runaway inflation now trump growth considerations, even as the euro zone economy reels from the impact of Russia's war in Ukraine.
• The ECB raised its benchmark deposit rate by 50 basis points to 0%, breaking its own guidance for a 25 basis point move as it joined global peers in jacking up borrowing costs. This was the euro zone central bank's first rate hike in 11 years.
• Ending an eight-year experiment with negative interest rates, the ECB also increased its main refinancing rate to 0.50% and promised further rate hikes possibly as soon as its next meeting on Sept. 8.
• With inflation already approaching double-digit territory, it is now at risk of getting entrenched above the ECB's 2% target and any gas shortage over the coming winter is likely to push prices even higher, perpetuating rapid price growth.

(Source: Reuters)

• China’s holdings of U.S. debt have fallen below $1Trn for the first time in 12 years amid rising interest rates that have made treasuries potentially less attractive. Japan is now the leading holder of U.S. debt with $1.2 trillion.
• Continuing a trend that began early in 2021, China’s portfolio of U.S. government debt in May dropped to $980.8Bn, according to Treasury Department data released July 18, 2022. That’s a decline of nearly $23Bn from April and down nearly $100Bn, or 9%, from the year earlier.
• The debt decline comes as the U.S. Federal Reserve has been raising rates to stop inflation from running at its fastest rate since 1981. When rates rise on bonds, prices drop, meaning a capital loss for investors who sell the bonds ahead of maturity. The decline in China’s share also has been attributed to Beijing working to diversify its foreign debt portfolio.

(Source: CNBC)