On December 18, 2019, the Executive Board of the International Monetary Fund (IMF) completed first reviews of Honduras’ performance under an economic program supported by a two-year Stand-By Arrangement (SBA) and a two-year arrangement under the Standby Credit Facility (SCF).
The completion of the reviews enables the authorities to access resources in the total amount of about US$144.7 million (SDR 105 million). The authorities have expressed their intention to continue to treat the arrangements as precautionary.
The IMF noted that despite headwinds to growth and a challenging external environment, the Honduran authorities remain fully committed to the economic program supported by the IMF.
They have also, among other things, maintained prudent macroeconomic policies—the fiscal position is in line with the Fiscal Responsibility Law, inflation is within the central bank’s target band, and the current account deficit has narrowed despite adverse terms of trade—and have taken initial steps on structural reforms to promote sustained, inclusive growth.
The Bank of Jamaica (BOJ) is projecting a $2.4Bn increase in total currency in circulation during December to $152.4Bn, relative to the sum in November, in keeping with heightened activities associated with the festive Christmas season.
In a statement on Tuesday December 17, the Bank said the projection represents a 14.1% increase, compared to 20.4% for the corresponding period in 2018.
The BOJ noted that the forecast is generally consistent with the five-year average growth of 17.6% for the month of December.
According to the BOJ, net currency issued between December 1 and 13 this year stood at $1.2 billion (0.9%), which was $1Bn lower than the corresponding period last year.
The Bank further pointed out that the stock of currency in the hands of the public as also the vaults of financial institutions, as at December 13, totalled $131.2Bn.
Real GDP growth in Jamaica will continue to decelerate over the coming quarters as government consumption and net exports remain weak.
A slowdown in US economic activity poses downside risks to Jamaica’s growth outlook, particularly given that Jamaica has little room for fiscal or monetary stimulus.
Fitch Solutions has consequently revised the 2019 real GDP forecast from 2.1% to 1.6% and the 2020 forecast from 1.8% to 1.4%.
Minister of Tourism, Hon. Edmund Bartlett, says Jamaica is positioning itself to meet the demands of the global tourism market over the next 10 years.
He told JIS News that estimates are for global tourism to grow to 1.8Bn international visitors by 2030, with earnings of US$2Tn.
Some 40Mn new jobs will be created, and one out of every nine workers in the world will be employed in a tourism-related field.
“Additionally, tourism will represent 11% of global gross domestic product (GDP) and more than 15% of trade, along with nearly 20% of foreign direct investment (FDI),” Minister Bartlett said, noting that the industry is expected to grow twice the rate of global GDP at 4-6%.
Mayberry Investments Limited ( MIL) has advised that the Company has completed their reconciliation of all applications in respect of the Lumber Depot Limited Initial Public Offering and that the basis of allotment will be as follows:
Reserved Pool of Applications: the first 2,000 units were fully allocated, the balance > 2,000 units were allocated approximately 9.7992%.
General Pool Applications: the first 2,000 units were fully allocated, the balance > 2,000 units were allocated approximately 8.2660%.
On December 11, 2019, S&P Global Ratings upgrades Barbados’ long-term and short-term foreign currency ratings on the country to 'B-/B' from 'SD/SD', a 6-notch upgrade.
The successful restructuring of approximately $US531Mn in 2029 bonds and the issuance of US$32Mn in past-due interest bonds to holders of its U.S. dollar bonds that have been in default since 2018, was behind the upgrade.
The outlook is stable, reflecting the agency’s belief that the Government of Barbados’ commitment to a fiscal and institutional adjustment is balanced with the economic and political challenges of doing so.
The Bahamian tourism and aviation industries are set for a further boost through the nation formalizing its long-standing relationship with the US, a senior regulator revealed yesterday.
Juliea Brathwaite-Rolle, head of the Bahamas Civil Aviation Authority’s safety oversight department, confirmed to Tribune Business that this nation had last week signed an air services agreement with its northern neighbor as it continues to expand the industry’s growth platform.
Mrs. Brathwaite-Rolle said The Bahamas has now signed 24 air services agreements with nations such as China, Saudi Arabia, Jamaica, the UK, Canada and even Turkey and Qatar. The latter two had to-date been the most active in exploring the possibilities, and she added: “Services are coming to The Bahamas and we’re benefiting from it.”
Oil rose to its highest in nearly three months on Friday as progress in resolving the U.S.-China trade dispute and Britain’s general election result appeared to lift two clouds that have been hanging over investor risk appetite.
U.S sources said on Thursday that Washington has set its terms for a trade deal with Beijing, offering to suspend some tariffs on goods and cut others in exchange for Chinese purchases of more American farm goods.
Brent crude, the global benchmark LCOc1, climbed to $65.22 a barrel, the highest since Sept. 23, and as of 1135 GMT was up 99 cents at $65.19. U.S. West Texas Intermediate crude CLc1 gained 74 cents to $59.92.
The 18-month trade war has been a dampener for oil prices, while uncertainty around Brexit has also weighed. Britain’s ruling Conservative Party won a large majority in Thursday’s general election, giving it the power to take the country out of the European Union.
The dollar fell 0.6% on Friday, with global risk appetite boosted by the apparent clearing of two clouds that have been hanging over world markets: U.S.-China tariffs due on Dec. 15 and Britain’s election.
Currency traders expect the U.S.-China trade war to de-escalate after U.S. sources said Washington had set out its terms for a trade deal.
UK Prime Minister Boris Johnson’s pro-Brexit Conservative party won a majority, which markets expect will fulfill Johnson’s promises to end the uncertainty around the UK’s departure from the EU.
The Japanese yen, which fell when early indications of the UK election result were announced on Thursday evening, continued to slide on Friday. It was last down 0.3%, heading towards its lowest against the dollar in more than six months JPY=EBS.
The dollar index. DXY was down 0.6%, its biggest daily fall in six months.
Moody's Investors Service on December 11, 2019, upgraded the Government of Jamaica's long-term issuer and senior unsecured ratings to B2 from B3. The outlook has been changed to stable from positive.
The upgraded rating reflects Jamaica's strong commitment to fiscal consolidation and structural reforms that portend of continued decline in government debt and sustained improvements in economic resiliency. Additionally, its improving debt structure limits risks associated with high levels of government debt.
The stable outlook reflects Moody's expectations that the improvements in Jamaica's credit profile, which have improved macroeconomic stability and put the debt on a downward trend, will be sustained. The stable outlook also reflects the structural credit constraints due to the country's small size, sizeable economic concentration in the tourism industry, low economic growth and vulnerability to external shock.
The rating could be upgraded if it is concluded that the government is committed to institutional and economic reforms, combined with evidence of higher real GDP growth that will result in greater economic resiliency. Debt declines and increases in external buffers beyond current expectations would also be positive.
A sharp reversal in the decline in government debt would weigh on Jamaica's credit profile, particularly as Jamaica's B2 rating incorporates a steady decline in the debt-to-GDP ratio as well as adverse exchange rate developments. An increase in external vulnerability, as reflected in a decline in the country's international reserve buffer would also be negative. Severe weather-related events that materially affect government finances threatening the sovereign's ability to service debt could also trigger a negative rating action.
