• The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with the Dominican Republic and considered and endorsed the staff appraisal without a meeting. 
• The Dominican Republic continued to show remarkable resilience to global shocks, supported by sound policies, monetary policy support, a nimble COVID vaccination campaign and a well-attuned reopening that allowed the economy to make the most of the global rebound last year. This resilience and strong signals of policy sustainability are placing the Dominican economy in a good position to face emerging global challenges going forward. 
• The outlook points to a continued recovery, though global developments pose risks. GDP growth would converge to its potential and inflation would return to the target range by next year as the impact of global shocks recedes, in the context of financial stability and a sound external position. 
• As for risks, the war in Ukraine may have a stronger-than-expected effect on global growth and inflation. The pandemic, while well-contained in the Dominican Republic, may downgrade growth in other regions, and monetary policy tightening in the United States may have a stronger-than-expected impact on capital flows. 
• The authorities have responded with temporary measures while maintaining budget discipline through expenditure control and executing proactive debt-management that reduced financing risks.

(Source: IMF)

• European Commission chief Ursula von der Leyen said that the 27-nation European Union needs to make emergency plans to prepare for a complete cut-off of Russian gas in the wake of the Kremlin’s war in Ukraine. 
• The EU has already imposed sanctions on Russia, including on some energy supplies, and is steering away from Kremlin-controlled deliveries. But the head of the EU’s executive branch said the bloc needed to be ready for shock disruptions coming from Moscow, and said the first plans would be presented by the middle of the month. 
• Energy, and the prospect of a winter without enough heating for homes or power to keep factories going, could now pose a similar challenge to EU solidarity and a source for populist-spawned division. 
• “It is very important to have a European overview and a coordinated approach to a potential complete cut off of Russian gas,” von der Leyen said. A dozen members have already been hit by reductions or full cuts in gas supplies as the political standoff with Moscow over the Ukraine invasion intensifies. 
• The EU has not included gas — a fuel used to power factories and generate electricity — in its own sanctions for fear of seriously harming the European economy. Before the war in Ukraine, it relied on Russia for 25% of its oil and 40% of its natural gas. In the meantime, the average monthly import of Russian pipeline gas is declining by 33% compared with last year, von der Leyen said as she called for a speedy transition toward renewable sources of energy.

(Source: AP News)

• The number of Americans filing new claims for unemployment benefits unexpectedly rose last week and there are growing signs that demand for labour is cooling, with layoffs surging to a 16-month high in June as the Federal Reserve's aggressive monetary policy tightening stokes recession fears. 
• But the weekly jobless claims data from the Labour Department on Thursday was likely distorted by Monday's Independence Day holiday, which resulted in several states, including California, submitting estimates. Nevertheless, the labor market is losing momentum. 
• "This is what the Fed wants, but it needs to be orderly to avoid an increase in recession risks," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania. 
• Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 235,000 for the week ended July 2, the highest level since January. Economists say claims need to rise above 250,000 on a sustained basis to raise concerns about the labour market's health. 
• Claims could become even more volatile in the weeks ahead. Automobile manufacturers typically close assembly plants for annual retooling after the Independence Day holiday, which is anticipated by the seasonal factors, the model that the government uses to strip out seasonal fluctuations from the data. However a global semiconductor shortage has forced manufacturers to adjust their schedules.

(Source: Reuters)

• The Ministry of Agriculture and Fisheries will be launching a wheat flour substitution programme to combat the global shortage of the commodity and promote healthier eating among Jamaicans. 
• Speaking at the handover ceremony for the ‘Jamaica Food Systems Profile’ by the Food and Agriculture Organization (FAO) of the United Nations, Portfolio Minister, Hon. Pearnel Charles Jr., said, “With the support of the Government of Cuba, [we will be] targeting breadfruit and cassava to create gluten-free flour as a healthy alternative to wheat.” 
• The global wheat shortage has resulted from several factors, including the Russia/Ukraine crisis, the COVID-19 pandemic and the effects of climate change. 
• Jamaica is one of 50 countries that were included in the assessment carried out under the leadership of governments and in collaboration with the European Union (EU) and the French Agricultural Research Centre for Development (CIRAD). 
• Minister Charles said the report will “guide us in determining the plans and policies to be implemented to ensure that the people of Jamaica, and all in our region, have safe, nutritious and adequate supply of food”. 
• FAO Representative for Jamaica, The Bahamas and Belize, Dr Crispim Moreira, said the assessment is a “gateway for national dialogue” and can be used to promote investment toward the sustainable transformation of food systems in the country.

(Source: JIS News)

• Fitch Solutions forecasts that Colombia’s Banco de la República (BanRep) will raise its policy rate by 250 basis points to 10.00% by end-2022, after hiking it by 150 basis points, to 7.50%, at its most recent meeting on June 30. 
• Rising commodity prices will drive 8.9% y-o-y average inflation in 2022, far above BanRep’s target range. 
• Along with a strong growth outlook and hikes from the US Federal Reserve, this underpins the view that BanRep will pursue a more hawkish monetary policy in the months ahead. 
• The incoming administration of President-elect Gustavo Petro poses downside risks to the country’s monetary policy outlook.

(Source: Fitch Solutions)

• It is forecasted that growth in Brazil will slow from 4.6% in 2021 to 0.8% in 2022, weighed down by high inflation and tight monetary policy, political uncertainty and weaker external demand in H2. 
• This forecast is down from 1.0%, as the positive news of an upside growth surprise in Q122 was outweighed by revised forecasts for higher interest rates in Brazil and weaker growth in China. 
• In 2023 it is expected that growth will pick up to 1.5%, as inflation moderates, interest rates are cut, and political uncertainty eases after October 2022’s general election.

(Source: Fitch Solutions)

• Oil plummeted by nearly $12 a barrel on July 5, 2022, the biggest daily drop since March, and the decline spread to other energy sectors amid worries of a global recession. Benchmark Brent crude was down $11.88, or 10.4%, at $101.83 a barrel by 1:53 p.m. EDT. U.S. West Texas Intermediate (WTI) crude settled at $99.50 a barrel, falling 8.2%, or $8.93 a barrel. 
• Both benchmarks logged their biggest daily percentage decline since March 9 and hit share prices of major oil and gas companies. Prices hit the lowest since late April. 
• "We're getting creamed and the only way you can explain that away is fear of recession," said Robert Yawger, director of energy futures at Mizuho. Oil futures sank along with natural gas, gasoline, and equities which often serve as demand indicators for crude. 
• If a recession does hit and takes a significant bite out of energy demand, more wild swings to the downside could be in store. 
• Meanwhile, safe-haven demand for U.S. Treasuries boosted the dollar by about 1.3%, which in turn weighed on greenback-denominated oil as it becomes more expensive for buyers holding other currencies.

(Source: Reuters)

• Zimbabwe's central bank said it would start selling gold coins this month as a store of value to tame runaway inflation, which has considerably weakened the local currency. The central bank governor John Mangudya said in a statement on July 5^th,2022, that the coins will be available for sale from July 25 in local currency, U.S. dollars, and other foreign currencies at a price based on the prevailing international price of gold and the cost of production. 
• Last week, Zimbabwe more than doubled its policy rate to 200% from 80% and outlined plans to make the U.S. dollar legal tender for the next five years to boost confidence. Soaring inflation in the southern African country has been piling pressure on a population already struggling with shortages and stirring memories of economic chaos years ago under veteran leader Robert Mugabe’s near four-decade rule. 
• Annual inflation, which hit almost 192% in June, cast a shadow over President Emmerson Mnangagwa’s bid to revitalize the economy. Zimbabwe abandoned its inflation-ravaged dollar in 2009, opting instead to use foreign currencies, mostly the U.S. dollar. The government reintroduced the local currency in 2019, but it has rapidly lost value again.

(Source: Reuters )

• The Jamaica Customs Act, which is to be repealed and replaced, will provide a modern framework that further enhances the ease of doing business. The Act, which is currently before a Joint Select Committee of Parliament, will improve customs practices and procedures to facilitate trade effectively and efficiently. 
• Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill said that the modernization is expected to bring significant benefits to the trading community by improving customs clearance and revenue collection, simplifying procedures for businesses, and providing more efficient service delivery to the general public. 
• “With these changes, Jamaica will be in a better position to offer diversified export products within new markets, creating greater opportunities for stakeholders within the industry through the local business community,” he said. 
• While the Ministry is committed to ensuring that Jamaica takes advantage of growing near-shore opportunities, especially by expanding Special Economic Zones (SEZs), it has to be supported by the right governance and legislative frameworks. This is expected to increase access to wide international markets through accredited testing, inspection and certification services and reduced trade costs for exporters and manufacturers.
• In addition to improving legislation, the ministry is also updating the Automated System for Customs Data (ASYCUDA), a web based portal that supports paperless declaration processing through the use of electronic documents. The update will allow it to function in an even more customer-friendly manner and with ease and efficiency.

(Source: JIS News)

• Proven Investment Limited (Proven) reported an 8.7% increase in net profit attributable to shareholders to US$12.54Mn for the 12 months ended March 31, 2022. 
• Net Operating Revenue rose 58.1% to US$36.79Mn on the back of a 67.3% increase in net interest income driven by improvement in its core pillar- the Banking and Wealth Management Division. It was also influenced by the gross revenue of US$53.69Mn recorded from its newly acquired manufacturing arm through Roberts Manufacturing Company Limited (RMCL) in Barbados. The addition of the manufacturing arm provides diversification in the company’s portfolio which was mainly concentrated in financial services. 
• In spite of the increase in revenues, operating profit fell by 44.6% due to the incurrence of direct expenses amounting to US$37.90Mn from its manufacturing arm, and a 105.1% surge in operating expenses to $42.60Mn on the back of increases in staff costs and other expenses. This led to a decline in the operating profit margin from 26.5% to 9.3%. 
• Following the decline in operating profit, the company was still able to record higher net profit because of 47.5% rise in share of profits from associates. 
• In addition to the acquisition of RMCL (51%) in the last financial year, PROVEN also acquired Fidelity Bank (Cayman) Limited (100%), and Heritage Education Funds (100%) while completing new and existing real estate projects. It is expected that the company will create value from these recent acquisitions which should improve the company’s bottom line going forward. This positive impact will be tempered by the adverse impact of sustained inflationary pressures and the high-interest rate environment on the financial sector. 
• PROVEN’s stock price has increased by 13.1% since the start of the calendar year. The stock closed Tuesday’s trading session at $ 2376 and currently trades at a P/E of 14.4x which is below the USD Stock Market Average of 16.5x.

(Sources: JSE & NCBCM Research)