•  The Dominican Republic Consumer Price Index (CPI) in 2021 reached its highest level since 2008, at 8.50%, and everything seems to indicate that this year it will surpass double digits. 
• Inflation is expected to range between 12% and 13% by the end of 2022 assuming that the conflict between Russia and Ukraine will continue for at least four months, which will undoubtedly alter the macroeconomic framework of the country. 
• Antonio Ciriaco Cruz, an Economist, explained that the government must make a supplementary budget because, in the current one, the oil barrel is contemplated at US$62. 
• In this sense, he explained that if, in the best-case scenario, the average price of oil is at US$90, the oil bill would increase by some US$2.4Bn in addition to the US$4Bn paid last year. The bill could reach US$7 billion he noted. This is a difficult situation for countries like the Dominican Republic, which is a net importer of oil. 
• The current Russia-Ukraine crisis is likely to push oil and natural gas prices higher and drive up import costs for key commodities such as wheat and corn, thereby contributing to higher levels of inflation. The expected rise in inflation for the Dominican Republic will have implications for consumers, businesses and the overall economy.

 (Source: Dominican Today)

• U.S. motorists, already dealing with a steep rise in spending on fuel as the economy rebounded from the coronavirus-induced recession, are now dealing with surging gasoline prices after Russia invaded Ukraine. 
• However, coming into recent months, U.S. consumer spending on energy and gasoline had been near historically low levels - even in the years preceding the coronavirus pandemic. 
• Global energy market prices have skyrocketed since the invasion and subsequent sanctions on Russia from the United States and other countries. U.S. gasoline prices hit an all-time high, while global oil prices surged to a 14-year-high. 
• Americans allocated a record-low share of 1.3% of their total spending on gasoline and energy goods during lockdowns imposed by governments during the coronavirus pandemic in April 2020, according to the Bureau of Economic Analysis. 
• Since then, consumer spending on gasoline and energy has taken up a greater portion of total spending. By December 2021, consumers spent about 2.6% of their total spending on gasoline and energy goods, the most since 2015, according to BEA data. That number dropped to 2.5% in January, the most recent figure available - but is expected to keep rising.

(Source: Reuters)

• Canadian carriers are seeing a bounce in spring travel after a slump due to the spread of the Omicron coronavirus variant, with the country's largest airport bracing for its busiest travel day since the onset of the pandemic this Friday. 
• But just as COVID-19 shows signs of ebbing, surging oil prices due to the Russian-Ukraine crisis and high regulatory costs are casting shadows ahead of the busy summer vacation season. 
• Canadian air traffic is recovering more slowly than in the United States due to tougher virus restrictions. But after rules eased in February, flights to some sun destinations rebounded in March to levels similar to those seen before Omicron hit winter travel, data from airline data company Cirium suggest. 
• Toronto Pearson International Airport on Wednesday said it is expecting March 11 to be the busiest travel day since the start of the pandemic, with about 85,000 passengers set to arrive or depart ahead of spring break next week in the country's most populous province, Ontario.

(Source: Reuters)

• Despite a 20.4% reduction in revenues, Blue Power reported a 146.4% or $121.41Mn increase in earnings for the nine months ended January 31, 2021. The fall in the company’s revenues can be attributed to a reduction in exports as a result of the discontinuation of sales to CARICOM markets arising from a changed trade regime. In 2021, the Jamaican Government discontinued the issuance of Certificates of Origin for soap manufactured locally with imported soap noodles, as a result of a ruling made in 2020 by CARICOM’s Council for Trade and Economic Development (COTED). 
• However, the company’s bottom-line benefited from capital gains from the sale of real estate and investments during this period of $145.64Mn. Consequently, profit before tax totalled $215.12Mn for the nine months relative to $110.6Mn for the previous year, up 94.6%. 
• In the coming months, management has indicated that the company will be taking steps to adjust its prices in response to the rising commodity prices and freight rates. The increases in input cost no longer appear to be temporary, and as such, Blue Power will be adjusting prices to reflect the changes in the economic environment. As such the company may see an increase in its revenue as a result of charging higher prices for its products.
• Blue Power’s stock price has increased by 23.3% since the start of the calendar year. The stock closed Tuesday’s trading session at $3.88 and currently trades at a P/E of 9.7x earnings which is below the Junior Market Manufacturing Sector Average of 19.7x.

(Source: Company Financials)

• Fitch forecasts that the Brazilian economy will grow 0.7% in 2022, down from a 4.6% expansion in 2021, as higher inflation and rising interest rates limit private consumption and investment, and weaker sentiment restrains economic activity. 
• The 2021 outturn of 4.6% was in line with Fitch’s expectations, as robust consumption and private investment led Brazil out of the economic downturn in 2020 that was caused by the COVID-19 pandemic. However, higher inflation will cause private consumption to slow to 1.9% in 2022, from 3.6% in 2021 and will continue to undermine consumer confidence. 
• Inflation is expected to average 8.2% in 2022, compared to 8.3% in 2021 driven by higher food and fuel costs that will limit how much consumers can spend on other goods. Nevertheless, while inflation is expected to slow in H2 2022, it will likely happen gradually. 
• Fitch is slightly more constructive in the medium-to-long term as inflation and interest rates begin to moderate and policy uncertainty will partially abate following the October 2022 general election. As such, growth is forecasted to average 2.1% from 2023 to 2026.

 (Source: Fitch Solutions)

• Fitch anticipates that Prime Minister Philip Davis will prioritise short-term spending measures to bolster the Bahamian national vaccination campaign, which has lagged behind other Caribbean markets. As of February 23, 38.8% of the Bahamian population had been fully vaccinated, and an additional 3.3% had been partially vaccinated. This is well below vaccination rates in the Dominican Republic and many other major tourist destinations in the Caribbean.  
• Additionally, Davis and the Progressive Liberal Party (PLP) will likely advance expansionary fiscal measures in the near term to support the economic recovery from the COVID-19 pandemic. However, In the longer term, the PLP government will likely shift fiscal policy towards consolidation due to wider deficits caused by the pandemic and a rising debt load.  
• Bahamas’ real GDP contracted 14.5% in 2020; however, Fitch forecasts that growth will accelerate to 10.9% in 2022, from an estimated 1.5% in 2021. These forecasts suggest that the Bahamian economy will not fully regain its 2019 level of output until 2024. Notably, Davis said his government will take measures to contain rising prices caused by global inflationary pressures, such as supporting domestic agricultural production. 
• The country’s fiscal deficit widened to 11.4% of GDP in 2020, then modestly narrowed to 10.3% in 2021. Consequently, Fitch expects that the PLP government will likely pursue debt renegotiations with the IMF and other international creditors, though the fiscal adjustment would not likely begin until the Bahamas is nearing its pre-pandemic level of output. 

 (Source: Fitch Solutions)

• U.S. President Joe Biden announced a ban on Russian oil and other energy imports on Tuesday in retaliation for the invasion of Ukraine, underscoring strong bipartisan support for a move that he acknowledged would drive up U.S. energy prices. That means Russian oil will no longer be acceptable in U.S. ports and the American people will deal another powerful blow to Putin's war machine. 
• Oil prices jumped on the news, with Benchmark Brent crude LCOc1 (ICE Brent Crude Energy Future c1) for May climbing by 5.4% to $129.91 a barrel by 1345 GMT. 
• Biden has been working with allies in Europe, who are far more dependent on Russian oil, to isolate Russia's energy-heavy economy and Putin. Britain announced shortly before Biden's remarks that it would phase out the import of Russian oil and oil products by the end of 2022. Biden said sanctions imposed by the United States and its allies had already caused the Russian economy to "crater". He said the latest moves had been made in close consultation with allies and partners around the world. 
• The United States imported more than 20.4Mn barrels of crude and refined products a month on average from Russia in 2021, about 8% of U.S. liquid fuel imports, according to the Energy Information Administration, and the ban is expected to send already high gasoline prices and inflation soaring. The United States also imports a negligible amount of coal from Russia. 
• Biden predicted prices would rise further as a result of "Putin's war," but pledged to do all he could to minimize the impact on the American people. He also warned U.S. gas companies against exploiting the situation to engage in profiteering or price gouging.

(Source: Reuters)

• Gold extended its rally towards a record high on Tuesday, after investors made a beeline for the traditional safe-haven metal on mounting fears around the Russia-Ukraine crisis, with the U.S. and Britain saying they would ban oil from Moscow. 
• Meanwhile, worries over a palladium supply shortfall due to sanctions on Russia, the top producer of the auto-catalyst metal, kept its price near all-time highs. 
• Spot gold was up 2.4% to $2,046.49 per ounce as of 01:36 p.m. ET (1836 GMT), after rising to $2,069.89 earlier in the session, a whisker away from a peak of $2,072.50 touched in August 2020. U.S. gold futures settled 2.4% higher to $2,043.30. 
• David Meger, director of metals trading at High Ridge Futures has said that the combination of soaring energy prices, grain prices, base metal prices have culminated in dramatic inflationary pressures that continue to be the major underlying support behind gold moving higher.

(Source: Reuters)

• Fontana reported a net profit of $309.96Mn for its six months ending December 31, 2021, a 5.5% or $16.17Mn increase relative to the prior period.   
• Much of FTNA’s growth can be attributed to the improvement in its top line as revenues grew by 19.0% but were partially eroded by a 22.2% rise in direct costs. The company’s Waterloo store continued to show very positive year-over-year growth. Additionally, its strategy of building inventory early enabled it to remain fully stocked during the busy holiday season. However, the rise in container freight charges caused by worldwide supply chain challenges translated into a significant expansion in costs and resulted in a slower pace of net profit growth. 
• Going forward, Fontana is expected to see increased demand supported by the recovery and reopening of the economy as well as its new store opening in the Portmore Community. 
• Fontana’s stock price has increased by 32.96% since the start of the calendar year. The stock closed Monday’s trading session at $9.93 and currently trades at a P/E of 23.6x earnings, which is below the Junior Market Distribution Sector Average of 25.8x

(Source: Company Financials)

• Brazil, Chile, and Mexico will release their consumer price inflation this week, and Fitch forecasts that price growth in February will likely remain well above their respective central banks’ target range, potentially accelerating to new multi-year highs, from 10.4% y-o-y, 7.7%, and 7.1%, respectively in January. 
• The recent Russian invasion of Ukraine will likely exacerbate inflationary pressures in H1 2022 in Latin America, as the region continues to face surging global commodity prices and modest domestic production, which have caused food and fuel prices to soar. 
• The agency expects that the Banco Central do Brasil, Banco Central de Chile, and Banco de México will remain hawkish and hike during their next rate-setting meetings in March. 
• Nonetheless, if inflation continues to surprise to the upside, Fitch will likely consider upward revisions to their 2022-year end interest rate forecasts if the central banks view their recent series of rate hikes to be insufficient in containing inflation.

 (Source: Fitch Solutions)