• Jamaica's total public debt burden is expected to fall relative to GDP over the coming years, as the government has managed to rein in spending and restructure large parts of its debts.
• After defaulting on its sovereign debt in 2010 and 2013, Jamaica has significantly improved its fiscal position via IMF-prescribed fiscal consolidation measures.
• After entering into a four-year Extended Facility Fund agreement with the IMF in 2013, the Jamaica government has significantly lowered its debt to GDP ratio, particularly its external debt stock, and placed it on a steady downward trajectory.
• In November 2016, the government renewed its commitment to the IMF's structural reform program through the September 2019, but Fitch expects the policy mix to remain unchanged following the conclusion of the agreement

(Source: Fitch)

• Barbados is expected to struggle with slow growth over the coming decade, as wide current account and fiscal deficits undermine the country's ability to invest in expanding capacity. This will be the result of weak international business activity and tourism sector performance a trend Fitch expects to play out across many Caribbean economies.
• While Barbados will benefit from politically independent institutions and stable price growth due to its currency peg to the US dollar, substantial macroeconomic headwinds will remain. A wide current account deficit is projected to persist over the next decade.
• Tourism will remain a primary driver of economic activity, though the sector's growth will be muted.

(Source: Fitch)

• It is expected that newly inaugurated Panamanian President Laurentino ‘Nito’ Cortizo will pursue reforms to improve transparency, mitigate corruption and bolster economic activity.
• It is expected that Cortizo will maintain business-friendly economic policies in line with those of his predecessor, Juan Carlos Varela.
• Although Cortizo won a closer-than-expected election in May 2019, his governing coalition will support policymaking, though it is unclear if it will be able to pass constitutional reforms to modernize Panama's political institutions.

(Source: Fitch)

• Any slim hope British Prime Minister Boris Johnson may have harbored on renegotiating the Brexit deal were quickly quashed by European Commission President Jean-Claude Juncker who told him that the current deal remains the best and only deal possible.
• For markets, the negotiation is not yet critical.
• What may be of more interest is who Johnson favors as the next governor of the Bank of England, with pro-Brexit economist Gerard Lyonsseen as the front-runner.

(Source: Bloomberg)

• U.S economic growth slowed in the second quarter by less than forecast as consumer spending topped estimates, though weaker business investment and exports underscored the risks spurring the Federal Reserve toward an interest-rate cut next week.
• Gross domestic product expanded at a 2.1% percent annualized rate, according to Commerce Department data Friday that topped forecasts for 1.8%. That follows an unrevised 3.1% advance in the first quarter and updated data showing growth last year was slower than previously reported.
• Consumer spending, the biggest part of the economy, increased 4.3%, while government spending climbed 5% and offered the biggest boost in a decade.
• Friday’s report showed fresh evidence that trade is weighing on the expansion as exports dropped 5.2% while imports rose just 0.1%. Overall growth on a year-over-year basis slowed to 2.3%, the weakest pace in two years.

(Source: Bloomberg)

• International Monetary Fund (IMF) Resident Representative, Dr. Constant Lonkeng Ngouana, says the reduction in Jamaica’s unemployment rate to 7.8% is a “tremendous achievement”.
• Noting that the rate was approximately 16.3% at the start of Jamaica’s current engagement with the organization in May 2013, Dr. Ngouana contends that “more than halving this in six years is very significant”.
• He was commenting on the results of the Statistical Institute of Jamaica (STATIN) April 2019 Labour Force Survey, which was outlined during the agency’s recent quarterly briefing at The Knutsford Court Hotel in New Kingston.
• Dr. Ngouana argues that the level of reduction in unemployment recorded thus far “is not something that happens very often” in countries experiencing the extent of economic challenges Jamaica faced.
• “The trend in the world has been that economies, after their crises, tend to have jobless recoveries,” he notes. The IMF Rep says in Jamaica’s case, the opposite has been occurring, where, while growth may not yet be at the desired level, a significant number of jobs are being created.

(Source: JIS)

• Fitch Solutions has stated that they expect that the outcome of Guatemala’s presidential election will have limited impact on the country’s infrastructure sector, leaving their construction industry forecasts for the market intact.
• It is expected that both candidates set to compete in the upcoming second-round vote to look to boost infrastructure investment above current levels, focusing on road investment in particular.
• Substantial challenges to infrastructure development in the market and the exit of a UN-backed investigative body will limit the ability of Guatemala’s next government to realize its infrastructure agenda.

(Source: Fitch Solutions)

• Just as U.S. and Chinese officials signal their first return to the negotiating table since trade talks collapsed in May, defense hawks in Beijing accused the U.S. of undermining global stability.
• A coincidence perhaps, but the sharp rhetoric is a vivid example of how fragile relations have become between the world’s two biggest economies.
• China’s military is also rapidly modernizing as it pushes to extend its influence in the East China Sea, South China Sea, and the Indian Ocean, spurring tensions in a region dominated by the U.S. military since the end of World War II.
• Further, Huawei, the Chinese tech giant on the U.S. blacklist, quickened revenue growth to roughly 30% in the first half after securing critical supplies to keep production going despite U.S. export restrictions.
• Taken together, the mood music hardly bodes well for a major breakthrough when senior U.S. trade officials meet their Chinese counterparts in Shanghai on Monday.

(Source: Bloomberg)

• The continuing decline in German manufacturing is starting to look increasingly worrying, with Purchasing Managers Index data for the sector this morning coming in at the lowest level in seven years.
• That 43.1 reading for July and a worse-than-expected reading for France dragged down Markit’s composite PMI reading for the euro area to 51.5 -- well below expectations.
• The data comes as the European Central Bank governing council meet to make their monetary policy decision, announced tomorrow. U.S. PMI data is due at 9:45 a.m. Eastern Time. 

(Source: Bloomberg)

• The Bank of Jamaica yesterday intervened in the foreign exchange market selling US$20Mn to authorized dealers and large cambios through its B-FXITT flash sale tool.
• The central bank noted that this move was warranted to address temporary demand and supply imbalances in the foreign exchange market.
• Last week the BOJ also intervened with a US$30Mn injection into the FX market under similar circumstances.

(Source: Bank of Jamaica)