• Bank of Jamaica (BOJ) yesterday announced its decision to hold the policy interest rate (the rate offered on overnight balances with BOJ) unchanged at 0.75% p.a., effective June 28, 2019.
• The decision to hold the policy rate unchanged is based on the Bank’s current assessment that monetary conditions are appropriate to support the achievement of the inflation target of 4.0% to 6.0% over the medium term.
• This decision comes on the heels of Jamaica’s inflation rate coming in at 4.8% for May 2019, back into the target range of 4% to 6% after five consecutive months of annual inflation being below target. 
• The BOJ also assesses the risks to projected GDP growth to be balanced compared to being skewed to the downside at the May 2019 assessment. 
• Other macroeconomic indicators continue to be positive. 

 (Source: Bank of Jamaica)

• Economic growth in Jamaica will accelerate in the coming quarters as economic reforms pay dividends and accommodative monetary policy supports credit growth.
• The mining sector will be a key engine of growth as alumina and bauxite facilities ramp up production, supporting forecast for real GDP growth to accelerate to 2.1% in 2019, from 1.9% in 2018.
• Despite improvements, Fitch Solutions expects that structural weakness will limit real GDP growth over the coming decade.

 (Source: Fitch)

• On June 26, 2019, Amazon.com, Inc. announced the creation of 2,000 job openings. These positions will be based in Amazon’s dedicated centers in Costa Rica and will include specialist roles in areas such as customer service, technology, cloud services, finance, and accounting.
• These specialist roles will support Amazon’s customers around the world and provide 24/7 world-class customer service in North and South America, Europe and Asia; in English, Portuguese, Italian, French, and Mandarin.
• The 2,000 new jobs include virtual (work-from-home) positions to increases opportunities for those who live outside the Greater Metropolitan Area, President Alvarado said.
• Costa Rica’s President, Carlos Alvarado, said he, along with the private sector, “continues working to reactivate the economy.”

 (Source: The Costa Rica Star)

• Barbados will run wide current account deficits over the coming years as machinery and food imports outweigh service exports, principally from tourism.
• Fitch expects stable foreign direct investment inflows and support from multilateral lenders to provide stability to support Barbados' external account.
• Fitch Solutions forecasts that Barbados will maintain a significant current account deficit of 3.4% of GDP in 2019 and 3.5% of GDP in 2020, following a deficit of 3.5% in 2018.

 (Source: Fitch)

• In conversations with other leaders ahead of his sit down with the U.S. president on the sidelines of the G20 summit in Japan, Xi spared no opportunity to paint the U.S. as the bad guy in China’s spiraling trade conflict, while avoiding the provocative step of naming Trump personally.
• Xi took a not-so-subtle swipe at Trump’s policy slogan, "America first." Warning against "bullying practices," Xi said that “any attempt to put one’s own interests first and undermine others’ will not win any popularity.”
• Xi then used remarks on the digital economy to call for a "fair and equitable market environment" and the "completeness and vitality of global supply chains."
• It comes as Trump singles out Chinese tech giant Huawei, arguing its connections to the government mean it could allow Beijing to spy through its equipment, and urging countries to avoid the company while developing 5G networks.
• Xi stated that he is opposed to protectionism as well as any "external” influence on the two countries’ relationship.

 (Source: Bloomberg)

• Conservative Party leadership candidate Boris Johnson has kept open the option of suspending or proroguing, the U.K.’s Parliament in order to force through a no-deal Brexit.
• The move would be highly controversial but Johnson says it would be “absolute folly” to tell the European Union that no-deal is completely off the agenda.
• The woman he’s attempting to replace, Theresa May, has warned she may well vote to stop a hard Brexit scenario, so the opposition to such a move is strong.
• All this in the face of slumping consumer confidence in Britain.

 (Source: Bloomberg)

• Engendering greater stakeholder trust across the public and private sectors to drive efficient service delivery is deemed pivotal in any thrust to secure higher levels of sustainable economic growth.
• This is the view of American bestselling author, Stephen Covey, who was speaking during the 37th Annual Caribbean Conference of Accountants, held recently at The Jamaica Pegasus hotel in New Kingston.
• Mr. Covey noted data from a study of 41 countries which he said shows that territories with the greatest levels of trust had the highest gross domestic product (GDP) per-capita incomes, and better economic performances.                                                                       

• He also pointed out that in a “high-trust” culture, “persons are 32 times more likely to take a responsible risk, leading to innovation”.

 (Source: JIS

• On June 26, 2019, Moody's Investor Service affirmed the Government of Trinidad & Tobago's Ba1 long-term issuer and senior unsecured debt rating while maintaining a stable outlook.
• The affirmation of this Ba1 rating is supported by the sovereign’s sizeable fiscal buffers that were balanced against an elevated debt ratio relative to peers; its economic recovery which has been driven by the energy sector; and the low susceptibility to external financing risks given its high reserve coverage of external debt payments.
• Moody’s stable outlook for the country has been maintained as a result of the expected balanced risks to the rating: on the upside, prospects of a sustained increase in oil and gas production would materially improve medium-term growth prospects, on the downside, institutional constraints continue to limit policy execution and the country's fiscal profile remains vulnerable to future commodity price shocks.
• Moody’s could adjust the rating upwards if there is a reduction in government debt ratios; improved fiscal performance (particularly if supported by non-energy-related government revenue); and improved tax collection. Progress in institutional and economic reforms that increase competitiveness and the economy's shock-absorption capacity would also likely result in a higher rating.
• However, the rating could be downgraded if government debt ratios deteriorate, or if a weakening of the balance-of-payments position increases external vulnerability risks.

(Source: Moody’s Investors Services)

• Trinidad and Tobago-based oil company, Trinidad Petroleum Holdings (TPH), has secured the funds to meet the upcoming principal payment on its $850Mn notes due August 25th and reduced its concentration of maturities for the next 12 months.
• The company raised the funds with a combination of a $570Mn bond exchange due 2026 and a $603Mn bank loan.
• As a result, on June 26, 2019, S&P Global Ratings affirmed its 'BB' ratings on the company. S&P will also be removing the ratings from CreditWatch with negative implications. S&P assigned a stable outlook, due to the new debt structure and it is expected that the company will repay or refinance upcoming financial liabilities.

 (Source: S&P Global Ratings)

• Economists now expect the Fed to cut interest rates multiple times this year -- coming round to the view held by investors, though they haven’t gotten all the way there yet.
• Respondents to a June 20-24 survey said they expected Fed officials will cut rates by a quarter-percentage point in September, and again in December.
• Before last week’s meeting of the Federal Open Markets Committee, a similar survey found the economists expecting just one quarter-point cut.
• Economists remain more cautious in their assessments of what the Fed will do than investors, who are betting that the easing cycle will start in July and amount to about three-quarters of a percentage point by year-end.
• Based on median responses, the economists saw a 50% probability of the U.S. and China agreeing at this week’s G-20 meeting in Osaka to resume trade talks. The odds of a more positive or more negative outcome were almost evenly split.

 (Source: Bloomberg)