• The Inter-American Development Bank (IDB) has approved Guyana’s request to tap US$83.3Mn from the Norway fund to develop solar power projects to aid in the diversification of the country’s energy matrix. 
• The US$83.3Mn forms part of the revenues Guyana earned from Norway over the years for the preservation of its forests. According to the agreement Guyana has with the Kingdom of Norway, the money is to be overseen by the IDB to ensure they are invested in projects that propel the social and economic well-being of the Guyanese. As the custodian of those funds, Guyana was therefore obligated to get the IDB’s blessings for its plans to spend the said money. 
• The main objective of the Program is to support the diversification of Guyana’s energy matrix towards the use of climate-resilient renewable energy sources in the electricity generation matrix.

(Source: Kaieteur News)

• The euro slid to a 20-year low and came closer to parity against the dollar on July 11 on concerns that an energy crisis will tip the region into a recession, while the U.S. currency was boosted by expectations that the Federal Reserve will hike rates faster and further than peers. 
• The most proximate concern for markets is whether or not Nord Stream 1 (a major Russian gas pipeline) is going to come back online,” said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto, adding that “the markets will likely price in a recession” for the region if it doesn't. 
• The euro tumbled as low as $1.0051 against the U.S. dollar, the weakest since December 2002. The dollar index reached 108.19, the highest since October 2002. 
• “The Fed is going to raise rates more aggressively than most other developed market central banks and we don’t think other developed market central banks really have the bandwidth to keep up,” Rai said. The Fed is expected to lift rates by 75 basis points at its July 26-27 meeting. Fed funds futures traders are pricing for its benchmark rates to rise to 3.50% by March, from 1.58% now. 

(Source: Reuters)

• The quickly changing coronavirus has spawned yet another super contagious omicron mutant that’s worrying scientists as it gains ground in India and pops up in numerous other countries, including the United States. 
• Scientists say the variant – called BA.2.75 – may be able to spread rapidly and get around immunity from vaccines and previous infection. It’s unclear whether it could cause more serious disease than other omicron variants, including the globally prominent BA.5. 
• “The latest mutant has been spotted in several distant states in India, and appears to be spreading faster than other variants there,” said Lipi Thukral, a scientist at the Council of Scientific and Industrial Research Institute of Genomics and Integrative Biology in New Delhi. It’s also been detected in about 10 other countries, including Australia, Germany, the United Kingdom, and Canada. Two cases were recently identified on the West Coast of the U.S., and Helix identified a third U.S. case last week. 
• It may take several weeks to get a sense of whether the latest omicron mutant may affect the trajectory of the pandemic. Meanwhile, Dr. Gagandeep Kang, who studies viruses at India’s Christian Medical College in Vellore, said the growing concern over the variant underlines the need for more sustained efforts to track and trace viruses that combine genetic efforts with real-world information about who is getting sick and how badly. “It is important that surveillance isn’t a start-stop strategy,” she said.

(Source: AP News)

• GraceKennedy Limited (GK) has advised that the merger of two of its local manufacturing divisions, National Processors (Nalpro) & Grace Food Processors Canning (Canning) is near completion. The combined operation has been named Grace Food Processors NALCAN. 
• The strategic decision to merge the operations of Nalpro and Canning was in keeping with GraceKennedy’s objectives to increase exports from 30% to 50% of their manufactured output by 2025, and also significantly increase domestic production.  
• The merger will see the relocation of Nalpro’s operations, which was situated in Temple Hall in St Andrew, to Canning at Twickenham Close in Kingston. Nalpro manufactures drink crystals, cereals, and dry mixes for soups; while Canning produces canned vegetables, sauces, and beverages, including Grace Tomato Ketchup and Tropical Rhythms. 
• Considerable transportation savings, reduced export consolidation expenses, and improved administrative efficiencies are expected to be realized with Nalpro’s relocation to Canning, which was determined to be the best place to house the merged operations because of its proximity to the ports. 
• The merger will be beneficial as the company continues to drive growth, reduce costs and remain internationally competitive to improve future shareholder value.

(Source: JSE)

• Several private investors have submitted proposals for renewable energy projects in Jamaica for Government consideration. Among them is an integrated solar and hydro energy project, which was announced by Prime Minister, the Most Hon. Andrew Holness. 
• These investments follow the House of Representatives’ recent approval of the exemption of GCT on Lithium-Ion Batteries. Renewable energy continues to be a major talking point as an alternative source of energy in light of the high energy prices experienced as a result of geopolitical tensions. 
• These investments are expected to assist in realizing the Government’s goal of increasing the ratio of energy generated from renewable options from the national power grid to 50% by 2030. 
• This could also contribute to a 60% reduction in Jamaica’s carbon dioxide emissions, also being targeted for 2030, in keeping with the country’s Nationally Determined Contributions (NDCs) under the Paris Agreement. The NDCs embody countries’ efforts to reduce carbon dioxide emissions and adapt to the impacts of climate change.

(Source: JIS News)

• Mexico's annual inflation accelerated in June to a level not seen since early 2001, suggesting the central bank will have little choice but continue its monetary tightening to tame spiraling consumer prices. Mexican consumer prices rose 7.99% in the year through June, this is slightly above the 7.95% consensus forecast of economists polled by Reuters. 
• This was also far above the central bank's target of 3%, plus or minus a percentage point, and marked the highest level since January 2001, when Mexico's 12-month inflation stood at 8.11%. The latest inflation figures are expected to lead Banxico, as the central bank is known, to keep raising rates after a record 75-basis points hike last month, when it warned it would hike rates again and by as much to curb inflation.  
• Chief emerging markets economist at Capital Economics is projecting a 75bps hike in the policy rate in August to 8.5%, which places his policy rate forecast for 2022 at 9.5%.

(Source: Reuters)

• Sri Lanka’s Central Bank has raised its key interest rates to their highest levels in more than 20 years to try to contain inflation that has added to the country’s economic woes. The central bank raised its Standing Deposit Facility Rate by 100 basis points to 14.50%. The move is expected to help draw more funds into the banking sector. It also raised the Standing Lending Facility Rate that it charges commercial banks by 100 basis points, to 15.50%. The bank said it expects to tighten its monetary policy further to fully curb inflation, which rose to nearly 55% in June, while food inflation topped 80%. 
• Recent price hikes have been a severe blow, especially for the South Asian country’s poor and vulnerable groups as they endure their country’s worst economic crisis in memory, struggling with acute shortages of essentials such as food, fuel, and cooking gas, and medicines. 
• Two weeks ago, Prime Minister Ranil Wickremesinghe told lawmakers the economy had “collapsed.” On July 6, 2022, he announced he had called Russian leader Vladimir Putin to request credit support to help the country import fuel. 
• Fitch Solutions Country Risk & Industry Research forecast that it would push the Standing Deposit Facility Rate to 16.50% and the Standing Lending Facility Rate to 17.50% by the year’s end.

(Source: AP News)

• Boris Johnson announced on July 7^th, 2022 he would quit as British prime minister after he dramatically lost the support of his ministers and most Conservative lawmakers, but said he would stay on until his successor was chosen. 
• Bowing to the inevitable as more than 50 government ministers and aides quit and lawmakers said he must go, an isolated and powerless Johnson said it was clear his party wanted someone else in charge, but that his forced departure was "eccentric" and the result of "herd instinct" in parliament. 
• A snap YouGov poll found that defence minister Ben Wallace was the favourite among Conservative Party members to replace Johnson, followed by junior trade minister Penny Mordaunt and former finance minister Rishi Sunak. 
• Johnson's office said he made clear at a meeting of his new cabinet on Thursday that the government would not seek to implement new policies or make major changes of direction, and major fiscal decisions should be left for the next leader.

(Source: Reuters)                                                              

• Jamaica has welcomed 1,117,137 stopover visitors since the start of the year, and has generated over US$1.5Bn in earnings as the industry continues to show very strong recovery from the fallout caused by the COVID-19 pandemic. 
• Tourism Minister, Hon. Edmund Bartlett said the industry’s gradual recovery has remained on track because the ministry continues to expand its market footprints. 
• Critical to this, he informed, has been the move to explore and tap into emerging markets “where the economies are growing and doing better and where the affordability levels are higher” rather than relying on traditional locations, such as the United States, United Kingdom, and Canada. Among the emerging markets, are the Middle East and several countries in Africa. 
• There are also consultations taking place with the Saudia (formerly Saudia Arabian Airlines), Qatar Airways, Etihad Airways, the Emirates Airlines, and the Royal Jordanian Airlines as well as the prospect for collaborations with South African Airways and airlines in Nigeria with hopes of enabling connectivity to Jamaica’s airspace. 
• The ministry is projecting 3.3Mn visitor arrivals and earnings of approximately US$4Bn by the end of the 2022/23 fiscal year. This will continue to support real GDP growth in 2022 with the sector already reporting a 107% increase in Q1 2022, which contributed to the 6.4% overall growth in the economy.

(Source: JIS News)

• The government of Jamaica has announced it will be spending an additional $2.7Bn to provide targeted support to Jamaicans who are most adversely affected by the high cost of living. This totals $3.8Bn in social intervention expenditure, of which $1.1Bn is already accounted for in the 2022/2023 Budget. 
• The support will go towards independence clean up, trucking of water to areas experiencing water challenges, support for PATH beneficiaries, pensioners, back-to-school one-off grants, welfare and economic enablement activities and Poor Relief through Ministry of Local Government & Rural Development. 
• The incremental $2.7Bn expenditure will initially be funded by advances from existing budgeted resources. These advances will be cleared following regularization of the expenditure in the First Supplementary Estimates 2022/23. 
• However, if revenues do not outperform expectations ($770.93Bn), the additional social expenditure could negatively impact the government’s ability to achieve its fiscal surplus of 0.3% of GDP for the 2022/23 fiscal year.

(Sources: JIS News & Ministry of Finance and the Public Service)