• On July 14, 2021 Moody's Investors Service ("Moody's") affirmed Government of Barbados’ Caa1 issuer ratings and withdrew the Caa3 senior unsecured bond rating. The outlook remains stable. 
• The key drivers behind the rating decision are: fiscal risks have not materially increased despite the severity of the pandemic shock; there are structural reforms to support medium-term growth prospects and fiscal sustainability; and an increased level of foreign exchange reserves supports Barbados' external position. 
• The stable outlook reflects Barbados' high level of indebtedness and subdued growth performance, balanced against strong reform efforts that have reduced fiscal vulnerabilities prior to the pandemic. 
• Despite the severe economic shock, reform efforts have continued and Moody’s expects the recovery in economic activity will support a path of fiscal consolidation similar to that observed in the fiscal accounts before the pandemic, which was associated with high primary surpluses and downward debt trajectory. 
• On the other hand, the speed of the recovery of the tourism sector remains uncertain, which poses risks to Barbados’ fiscal outlook.

(Source: Moody’s Investor Service)

• S. producer prices accelerated in June leading to the largest annual increase in more than 10.5 years. Based on the producer price index (PPI), prices increased by 7.3% YoY. This increase in inflation is attributed to two main factors. Firstly, it is due to a surge in demand fueled by the U.S economy’s recovery from the COVID-19 pandemic. Secondly, there have been supply-side issues such as increases in both commodity prices and labour costs. 
• Chris Low, chief economist at FHN Financial in New York stated that "Producers are still struggling to meet robust consumer demand in the face of supply chain bottlenecks and re-staffing difficulties." Further, it was highlighted that were very low inventory levels because of supply chain issues making it easier for producers to pass on the costs to consumers. 
• The Federal Reserve Chair Jerome Powell insisted in a congressional hearing that the high inflation is transitory, and this view is shared by most economists at the White House. However, given the high increase in producer price inflation coupled with the recent announcement of an increase in consumer prices, there is skepticism that inflation is temporary in the U.S.

(Source: Reuters)

• Canada’s real GDP growth is expected to rebound throughout the remainder of 2021 and into 2022. Fitch Solutions, has revised its growth forecasts to 6.1% for 2021 and 3.7% for 2022, from 5.3% and 3.4% respectively, due to its more upbeat outlook on the US economy that is expected to fuel Canadian exports and investment. 
• Elevated domestic savings and falling unemployment will drive private consumption in Canada. In Q121, national savings rose to 7.2% YoY, the highest increase in one quarter since 2014 and there is an expectation that consumers will spend more in the coming quarters to capitalize on their improving financial situation. 
• Sustained US demand is expected to drive real growth of 12.0% in Canadian exports in 2021 and 4.9% in 2022. The US economy, which purchases nearly 75.0% of Canadian exports, has been the fastest developed market to recover from the pandemic. In the year through May 2021, Canadian merchandise exports grew by 23.0% YoY, and given the enduring demand from the US for Canadian goods, it is expected that exports will continue to grow in the coming quarters.

(Source: Fitch Solutions)

• Prime Minister, the Most Hon. Andrew Holness, says the Government continues to position Jamaica as a regional country that is “growing significantly”. “I’m very proud of the fact that Jamaica has resolved issues related to the financial/fiscal management of its economic affairs. I believe we are on a very good course, having gone through several International Monetary Fund (IMF) programmes, to entrench this kind of fiscal stability, fiscal prudence and good fiscal management,” Mr. Holness said. “We are on a trajectory for growth, and I think that is another major achievement,” he added. 
• The Prime Minister was speaking on American TV network, WNYW-Fox 5’s morning programme, ‘Good Day New York’, with host Rosanna Scotto, on Tuesday (July 13). Mr. Holness advised that the Government was also tackling other institutional and development issues in Jamaica. These, he informed, include strengthening of the country’s bureaucracy to deal with matters such as corruption, while focusing on enhancing the efficiency of public service delivery. 
• He also noted that the Administration is investing heavily in bolstering the country’s national security framework, both in relation to the Jamaica Constabulary Force (JCF) and Jamaica Defense Force (JDF). 
• The Prime Minister pointed out that Government was also boosting resources for the education sector, adding that “in a few months, we will roll out some transformative policies. “These are long-term investments, which will have significant effects on the transformation of our country,” Mr. Holness underscored.

(Source: JIS)

• With the approval of amendments to the Casino Gaming Act in the Senate, the Government is aiming to attract investments in the country and increase economic activity as part of recovery efforts from the COVID-19 pandemic, particularly in the tourism sector. 
• Piloting the Casino Gaming (Amendment) Act, 2021 in the Senate on July 9, Minister of Foreign Affairs and Foreign Trade, Senator the Hon. Kamina Johnson Smith, said the amendments are aimed at strengthening the country’s competitiveness in the tourism industry. 
• “Tourism is one of the largest contributors to the country’s economy, 31% of Jamaica’s GDP in 2019, and it provides an estimated 350,000 direct and indirect jobs. Stimulating investments in integrated resorts development is expected to strengthen Jamaica’s competitiveness in the tourism industry and to bolster economic development through job creation, increased tax revenue and additional demand for locally produced goods,” she said. 
• Senator Johnson Smith explained that the proposed amendments are aimed at making changes to the requirement that a prospective investor must fulfil and of which the Minister with responsibility for Finance must be satisfied, in order to declare an integrated resort development to be an approved integrated resort development. 
• An integrated resort is a major resort property that includes a hotel with a casino, together with convention facilities, entertainment shows, theme parks, luxury retail and fine dining.

(Source: JIS)

• Weak tourism activity in H221 and a nationwide public health lockdown in February and March will drag down headline real GDP growth in Barbados in 2021. 
• Against this background, Fitch Solutions has revised its 2021 real GDP growth forecast to 1.8%, from 3.1% previously, given the expectations for underperformance in H221 activity. 
• The agency expects economic activity will remain sluggish into Q321.Tourism activity is highly seasonal, with Q1 and Q4 seeing the bulk of arrivals. Given that vaccines were not widely available until Q2 in key tourism source markets such as the US and UK, Fitch expects the 2021 headline growth figure to reflect the slow return of tourism activity. 
• Moreover, a spike in COVID-19 cases in July has prompted the government to re-impose overnight curfews starting July 13, which will limit commercial activity and weigh on employment.
• However, an eventual rebound of tourism and base effects is expected which will boost the 2022 headline growth figure. Considering this, the agency has revised its 2022 real GDP growth forecast upwards to 4.0%, from 3.5% previously.

(Source: Fitch Solutions)

• The 800,000 Sinopharm vaccines from China arrived in Trinidad and Tobago at approximately 12:21 pm on Tuesday. 
• In a post on his Facebook page, Foreign and Caricom Affairs Minister Dr. Amery Browne showed video of the plane landing as well as on the runway at the Piarco International Airport. 
• This is the third batch in less than 60 days, adding the total of donation and procurement of Chinese vaccines in TT to 1.1 million doses. China is committed to contributing to global vaccine accessibility. 
• The first shipment of 100,000 vaccines was a gift from the Chinese government which arrived on May 19. The second shipment of 200,000 vaccines was bought by the government and arrived in TT on June 14. These shipments have helped the government to partially and fully vaccinate 33.5% and 25.3% of the population, respectively, which is one of the highest rates in the  Caribbean. A continuous increase in the vaccination rate will support the country’s ability to foster the relaxation of restrictions, a faster return to normalcy and a rebound in activity in the non-energy sector.

(Source: T&T Newsday & NCBCM Research)

• S. Trade Representative Katherine Tai met her British counterpart Liz Truss in Washington on Tuesday, and the two agreed to continue working to strengthen bilateral ties, Tai's office said in a statement. 
• Tai and Truss agreed that their recent truce in a long-running trade dispute over aid for plane makers Airbus and Boeing (NYSE:BA) creates a platform for "future collaboration on shared challenges, including those posed by the anti-competitive practices of China and other non-market economies." 
• They also stressed the importance of fair competition in the global economy and agreed to work together both on a bilateral and multilateral basis to enhance the international trading system, and address forced labour issues.

(Source: Reuters)

• Oil was steady near the highest close since October 2018 after an industry report pointed to a further decline in U.S. crude stockpiles, adding to signs of a rapidly tightening global market. 
• Futures in New York traded near $75 a barrel after rising 1.6% on Tuesday. The American Petroleum Institute said crude inventories slid by more than 4 million barrels last week, according to people familiar with the data. That would be an eighth straight weekly draw, the longest run of declines since January 2018, if confirmed by government figures later on Wednesday. 
• Some uncertainty looms over the market, however. Indonesia posted a record number of new virus cases, while Sydney extended a lockdown as the delta variant continues to sweep the globe. The resurgence, as well as the OPEC+ impasse on raising crude production have clouded the short-term outlook. 
• Still, oil has rallied more than 50% this year as the vaccine rollout lifts demand in major economies such as the U.S., and the International Energy Agency is warning that the market will tighten significantly if OPEC+ doesn’t resolve its standoff and boost production. Talks broke down last week and it’s looking increasingly likely that the alliance won’t add more supply in August as members lock in supply volumes to customers next month.

(Source: Bloomberg)

• Canadian tourism has officially returned to Jamaica. The island welcomed back the first Air Canada flight following a six-month hiatus, with Air Canada’s first Dreamliner flight to the country.
• “Canada is the second-largest source market for Jamaica and the return of Canadian tourism in Jamaica is welcome news for our country’s hotel partners, attractions, transportation providers, hospitality workers, and the thousands of individuals employed in our tourism related industries,” said Edmund Bartlett. 
• “Air Canada is very pleased to resume our passenger service to Jamaica, which we have proudly served for more than 70 years,” said Luis Noriega Benet, General Manager, Latin America and the Caribbean for Air Canada. “There is no doubt many Canadians are looking to travel to Jamaica for a long-postponed sun holiday. As well, there are many people both in Jamaica and Canada who are eager to visit with friends and family members they have not been able to see since the pandemic began.” 
• The resumption of Canadian flights to Jamaica will support the expected H2 2021 recovery in the tourism sector. However, it is possible that Air Canada could cancel flights to Jamaica once more if cases continue to rise locally.

(Source: Carib Journal & NCBCM Research)