• The German government on Wednesday slashed its growth forecast for Europe's largest economy to 3% this year, a sharp revision from last autumn's estimate of 4.4%, caused by a second coronavirus lockdown.
• Chancellor Angela Merkel and state leaders agreed last week to extend the lockdown until mid-February as Germany, once a role model for fighting the pandemic, struggles with a second wave and record daily numbers of COVID-19 deaths.
• The economy shrank by a smaller-than-expected 5% last year. That still marked the second-biggest economic plunge in post-war history, surpassed only by the record -5.7% in 2009, during the financial crisis.

(Source: Reuters)

• China will likely avoid setting a 2021 growth target, dropping the closely watched measure for a second straight year on concerns that maintaining one could encourage provincial economies to ramp up debt, policy sources told Reuters. 
• The world's second-biggest economy eked out 2.3% growth last year despite the ravages of the pandemic that emerged in the central city of Wuhan and will rebound by a sharp 8.4% this year thanks to Beijing's aggressive COVID-19 response and global recovery, according to a Reuters poll of economists.
• Government advisers who call for scrapping the gross domestic product (GDP) target again this year appear to be gaining the upper hand, while policymakers may again signal a goal implicitly by targeting employment and other indicators, said the sources, who asked not to be identified because the discussions are confidential.

(Source: Reuters)

• The Unemployment Rate for October 2020 was 10.7% which was 3.5 percentage points higher than the rate of 7.2% for October 2019.
• The unemployment rate for males increased by 2.7 percentage points to 8.6% and for females, it increased by 4.4 percentage points, to 13.0%.
• The Employed Labour Force for October 2020 was 1,155,800 persons, which was 92,600 (7.4%) fewer persons compared with the 1,248,400, recorded in October 2019.
• In October 2020, the largest declines in the number of persons employed by industry groups were in ‘Arts, Entertainment, Recreation, and Other Services’ (36,900 or 27.9%), ‘Accommodation and Food Service Activities’ (23,400 or 22.1 %), and ‘Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles’ (15,800 or 6.6 %) compared to October 2019.

(Source: STATIN)

• Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, says the prospects of Jamaica rebounding from the economic fallout of the coronavirus to record growth within the range of 3-8% for the 2021-22FY are “very realistic”.
• He believes this will be possible if we can roll out our vaccine program in April 2021, and our markets to the north continue with their vaccine roll-out.
• The Bank of Jamaica (BOJ) and International Monetary Fund (IMF) are among the institutions forecasting the turnaround from the 10-12% economic contraction projected for the fiscal year 2020-21.
• Clarke stressed that the nature of the decline in 2020, which was as much as 18% during the April to June quarter “is not a result of any structural deficiencies in Jamaica, or elsewhere that we have imported,” but rather COVID-19.

(Source: JIS News)

• Puerto Rico will continue to run wide current account surpluses in the years ahead, as exports recover from the COVID-19 shock and federal aid inflows remain high.
• Fitch Solutions forecasts Puerto Rico’s surplus will widen to 11.0% of GNP in the Fiscal Year 2021 (FY21; July 2020-June 2021), from an estimated 8.6% in FY20.
• Risks to the agency’s view have diminished, as the transition to the Biden administration and a Democrat-controlled Congress should remove obstacles to aid disbursement.

(Source: Fitch Solutions)

• Fitch Solutions expects the Argentine government will continue to rely on currency and capital controls to manage external accounts pressures due to a crisis of confidence in the peso, limited access to external credit, and diminishing reserves.
• However, the current account deficit will widen in 2021 as stabilising economic activity drives an uptick in imports.
• It forecasts a current account deficit of 1.5% of GDP in 2021, from a surplus of 0.9% in 2020, a revision of its prior forecast for a deficit of 0.5% in 2020 and 2.0% in 2021.

(Source: Fitch Solutions

• U.S President Joe Biden’s team has shown early signs that it agrees with the previous administration on several “extremely touchy” issues concerning China, said Lanhee Chen from Stanford University.
• The “early signals” show that the Biden administration “may change the tone and tenor of the conversation with Beijing — but they’re not really gonna change the policy,” said Lanhee Chen, director of domestic policy studies and lecturer at Stanford University.
• Washington has no formal diplomatic ties with Taiwan — which China claims as a runaway province that must eventually be reunited with the mainland. Still, the U.S. is Taiwan’s most powerful international backer and largest arms supplier.

(Source: CNBC)

• Britain's scheme for compensating consumers hit by financial company failures has set itself a billion-pound ($1.37 billion) budget for the coming year to cope with a likely surge in collapses due to COVID-19.
• The Financial Services Compensation Scheme's (FSCS) budget of 1.04 billion pounds for the 2021/22 financial year that starts in April is its highest in six years.
• The FSCS also said it would add 78 million pounds to the current year's budget - a lower than expected increase - due to more firms failing, pushing the total for 2020/21 to 700 million pounds.
• The body is responsible for compensation arrangements for the Financial Conduct Authority, which warned this month that around 4,000 financial firms in Britain were at "heightened risk" of collapsing due to fallout from the pandemic.

(Source: Reuters)

• The Government is expected to spend $3Bn to implement phase one of the coronavirus vaccine program.
• Tufton said that the sum covers, among other things, the purchase of the vaccine(s), supply chain and cold storage items, personal protective equipment (PPE), transportation, staff costs including training, and public education and sensitization.
• Jamaica has committed to vaccinating 16% of the population in phase one and will receive 935,676 doses of the approved vaccine through the World Health Organization’s (WHO) Vaccine Global Access (COVAX) Facility.
• Jamaica is to receive 292,399 doses starting in April, based on the COVAX vaccine delivery schedule.

(Source: JIS News)

• In STATIN’s recent December 2020 inflation report, it was noted that, for the calendar year 2020, the inflation rate was 6.4%. The same release also noted that the point-to-point inflation rate as of December 2020 was 5.2%.
• The difference between the two numbers reflected the timing of shocks that affected the CPI during 2020. In addition, these differences have resulted in some confusion as to whether the Bank of Jamaica (BOJ) was successful in meeting its inflation target of 4.0% to 6.0% in December 2020.
• The inflation measure by which BOJ’s performance should be judged is the annual point-to-point as of December and not the calendar year or any other measure.
• This measure is stated in the soon-to-be gazetted law amending the Bank of Jamaica Act, which was passed by the both Houses of Parliament in December 2020.

(Source: JIS News)