• On May 29, 2025, the United States (U.S.) Department of State moderated its travel advisory for Jamaica, reducing the advisory from “Level 3 – Reconsider Travel” to “Level 2 – Exercise Increased Caution”. This comes two months after U.S. Secretary of State Marco Rubio pledged to revisit the advisory during a joint press conference with Prime Minister Andrew Holness, citing “impressive progress” made in reducing violent crime.
• While the adjustment to Jamaica’s travel advisory will have only a limited impact on Jamaica’s tourism-heavy economy, it reflects positively on the ongoing strength of the bilateral U.S.-Jamaica relationship and Jamaica’s success in reducing crime.
• Jamaica noted a 43.3% decline in murders in the first quarter of 2025 (Q1 2025) compared to Q1 2024, with overall incidents of serious crime from January 1 to April 12 falling by 18.6% compared to 2024. While the advisory acknowledges this progress, it also stresses that Jamaica continues to see elevated crime rates, urging travellers to avoid certain areas of the country.
• The advisory revision also does not change Fitch’s growth forecast for the tourism-dependent economy. Tourist arrivals to Jamaica declined by 5.6% year-over-year (YoY) in Q1 2025, while the total number of visitors from the United States declined by 6.1% for the same period. However, this decline is likely driven primarily by economic factors, including subdued U.S. domestic demand and ongoing U.S. trade policy uncertainty.
• With visitors from the United States accounting for 71.2% of total stopover visitors in 2024, dampened U.S. demand will continue to pose headwinds to Jamaica’s tourism-dependent economy in 2025.
• That said, despite ongoing trade upheavals regarding the U.S., Prime Minister Andrew Holness reaffirmed Jamaica’s commitment to strong bilateral relations with the U.S., a sentiment shared by U.S. Secretary of State Marco Rubio. This healthy bilateral relationship will likely help mitigate external risks to Jamaica’s economy and political outlook, especially when faced with a volatile Trump administration.

(Source: Fitch Connect)

• Tax revenues as a share of GDP in Guyana fell in 2023, and the country now has the lowest tax-GDP ratio for the Latin America and Caribbean region, a new report by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) has said.
• This decline is primarily due to explosive GDP growth driven by offshore oil production, which surged, reaching over 645,000 barrels per day in 2024². However, this growth has not translated into proportional tax receipts, as much of the revenue is retained by foreign operators under Guyana’s production sharing agreement with the ExxonMobil-led consortium.
• According to the report, tax revenues in Latin America and the Caribbean (LAC) also decreased as a share of GDP in 2023 amid a slowdown in economic activity in the region and a decline in global commodity prices. The report titled, Revenue Statistics in Latin America and the Caribbean 2025, released two weeks ago, shows that the average tax-to-GDP ratio in the LAC region was 21.3% in 2023.
• This was 0.2 percentage points (p.p.) below 2022 levels and slightly below pre-COVID levels of 21.4% in 2019. Tax-to-GDP ratios in the LAC region, according to the report, ranged from 11.6% in Guyana to 32.0% in Brazil in 2023.

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² Reuters

(Source: Kaieteur News)

• Brazil's central bank governor said on Monday, that the monetary tightening cycle is still open and that policymakers want to preserve their flexibility to digest incoming data and calibrate the appropriate terminal interest rate.
• "We are still discussing the hiking cycle," Gabriel Galipolo said at an event in Sao Paulo. "Flexibility means we are open." The bank's monetary policy committee meets later this month for its next rate decision, after raising the benchmark Selic rate by 50 basis points in May to 14.75%, its highest level in nearly two decades.
• Following last week’s release of official data showing strong first-quarter growth in Latin America’s largest economy, he noted the economy’s unexpected resilience and stressed that policymakers are seeking additional data to confirm whether a sustained trend is emerging.

(Source: Reuters)

• Global economic growth is slowing more than expected only a few months ago as the fallout from the Trump administration's trade war takes a bigger toll on the U.S. economy, the Organisation for Economic Cooperation and Development (OECD) said on Tuesday, revising down its outlook.
• The global economy is on course to slow from 3.3% last year to 2.9% in 2025 and 2026, the OECD said, trimming its estimates from March for growth of 3.1% this year and 3.0% next year.
• But the growth outlook would likely be even weaker if protectionism increases, further fuelling inflation, disrupting supply chains and rattling financial markets, the Paris-based organisation said in its latest Economic Outlook. "Additional increases in trade barriers or prolonged policy uncertainty would further lower growth prospects and likely push inflation higher in countries imposing tariffs," OECD Secretary General Mathias Cormann said as he presented the report.
• If Washington raised bilateral tariffs by an additional 10 percentage points on all countries as compared with the rates in force as of mid-May, global economic output would be about 0.3% lower after two years, Cormann added.

(Source: Reuters)

• Bank of Japan Governor Kazuo Ueda said the country's economy can withstand the hit from U.S. tariffs and sustain a cycle of rising inflation accompanied by wage growth, signalling the bank's readiness to raise interest rates further.
• Uncertainty over U.S. trade policy and the range of tariffs imposed by President Donald Trump's administration could hurt Japan's exports, prod firms to delay capital expenditure plans, and discourage them from raising wages, Ueda said.
• While an agreement between the U.S. and China to scale back reciprocal tariff rates is perceived by markets as a positive development, uncertainty over the outlook remains high. He further highlighted that Japan's tight labour market means the economy will likely sustain a trend in which wages and prices rise in tandem—a key prerequisite for further rate hikes.
• While underlying consumer inflation will stagnate temporarily, there is no change to the BOJ's view that it will gradually rise toward its 2% target, Ueda said. "Although developments in trade policies since early spring have had a larger impact on Japan's economy than we had expected, progress towards achieving our price target continues to gain momentum," he added.
• Japan's economy contracted in the first quarter and export growth slowed in April, in an early sign of the toll steep U.S. tariffs could inflict on the fragile recovery. The darkening economic outlook forced the BOJ to cut its growth and inflation forecasts on May 1 sharply, and has complicated its decision around the timing of the next rate hike.
• While slowing growth could weigh on inflation, consumer price data for April showed that companies continued to pass on rising costs for a wide range of goods, Ueda said.

(Sources: Reuters)

• Fitch anticipates that the BOJ will reduce rates by another 25bps to 5.50% on June 20, 2025. It further expects that the BOJ will lower the policy rate by an additional 75bps to 5.00% by December 2025.
• These expectations are based on increased clarity on the impacts of trade policy for domestic price stability and a favourable inflationary outlook.
• While uncertainty continues to dominate the international economic landscape, the BOJ’s statement on the limited first-round impacts of tariffs is a strong indicator of the bank’s potentially dovish posture in the near term.
• With inflation anchored near the midpoint of its target range¹, private sector inflation expectations stable at 7.3% in March 2025, lower projected energy prices, and wage pressures moderating against a soft growth backdrop, inflation is expected to ease to 4.5% by the end of 2025 and average 5.0% for the calendar year 2025 – the midpoint of the BOJ’s target range.
• That said, risks to the inflation and interest rate forecasts are balanced, with the possibility of geopolitical tensions creating supply chain challenges and subsequent price pressures. Additionally, significant weather-related shocks could create supply-side inflationary pressures. Should these risks materialise, the BOJ may opt to pursue a tighter-than-expected monetary policy stance.
• Conversely, downside risk from sluggish growth numbers and flagging external demand could incentivise the BOJ to pursue more expansionary monetary policy through the end of 2025, should it feel confident that it could satisfy its price stability mandate.

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¹Headline inflation was at 5.3% year over year (YoY) in April, and core inflation has now held below the 6.0% threshold for 22 consecutive months.

(Source: Fitch Connect)

• Minister of Agriculture, Fisheries and Mining, Hon. Floyd Green, recently announced that the Government will intensify its focus on the bauxite and alumina sector to enhance efficiency and promote growth. This statement was made during the Bauxite/Alumina Industry Day at the Jamaica Bauxite Institute (JBI) in St. Andrew on May 30, 2025.
• Minister Green acknowledged the industry's decline over recent decades but emphasised its continued significance to the economy. He highlighted a 4% increase in aluminium output for 2024, which is estimated to have increased to 1.337Mn tonnes, up from 1.286Mn tonnes in 2023. Additionally, Jamaica collected approximately $623Mn from bauxite royalties in the 2024-2025 fiscal year, marking a considerable increase from the previous year.
• The Minister indicated that the Government aims to play a more proactive role in the sector's growth. He pointed to the need to assess the quality of bauxite reserves, address issues related to ageing infrastructure and invest in improvements to increase operational efficiency.
• Furthermore, Jamaica's red mud, which is believed to contain around 40Mn tons of iron oxides and rare earth elements, presents a potential source of revenue for the mining sector. This, therefore, increases the need for Jamaica to seek partnerships for investing in the extraction of these rare earth elements for the benefit of the population.
• Several companies are already taking steps to enhance their operations. For instance, JAMALCO is focusing on strategic investments to streamline processes related to bauxite and energy generation, while Windalco is working on improving its haul road.
• Further, Andre Lindsay, General Manager of the JBI, noted that the Institute is reorienting its efforts toward researching the extraction of rare earth elements from bauxite residue and aims to direct work in this area throughout the fiscal year.

(Source: JIS)

• Test results for a suspected bird flu outbreak on a commercial farm in the town of Anta Gorda in Rio Grande do Sul state came back negative, according to an analysis of samples released by the Brazilian Agriculture Ministry on Monday. This was the only potential case currently under investigation on a commercial farm in Brazil, the world's largest chicken meat exporter.
• The results were negative for both bird flu and Newcastle disease, the document showed. Both these diseases may trigger trade bans.
• On May 22, Brazilian authorities declared a 28-day bird flu observation period following the full disinfection of the farm where the first outbreak was detected. In the days following the first case in Brazil, 1.7 million eggs were destroyed in Rio Grande do Sul, according to the state's department of agriculture.
• Teams that run the farm where bird flu was detected buried waste that had first been incinerated to prevent the spread of the virus. The virus killed around 15,000 birds and the farm culled an additional 2,000.
• Brazil hopes that by the end of the observation period, the country's chicken farms can be free of bird flu disease, provided no new cases are confirmed.
• Controlling the outbreak would allow Brazil to resume trade with partners that have suspended chicken imports from the country, such as China and the European Union, after the first and only outbreak was confirmed.

(Source: Reuters)

• Difficulties in accessing foreign exchange have forced AS Bryden and Sons Holdings Ltd (ASBH) to increase its United States dollar borrowing, resulting in higher interest costs, chairman Paul B Scott has said.
• “ASBH has significant operations in Trinidad where access to the US$ has been a challenge in the last year. This has led to increased borrowing of US$ and thus, higher interest costs, as we pay our payables,” Scott said.
• “As we grow our business outside of Trinidad, these US liabilities will be matched by earnings in US$ or convertible currencies. We are confident that we will be able to continue and support the growth of the company and our commitment to our principals in growing their business,” he said.
• ASBH faced challenges in accessing foreign exchange in Trinidad and Tobago, prompting the company to engage in costly hard currency swaps. CEO Richard Pandohie noted that while this has become part of the cost of doing business there, ASBH is working to mitigate its impact through increased exports and strategic acquisitions.
• ASBH is building a state-of-the-art, US$25Mn regional distribution centre in central Trinidad, expected to be completed by February 2026. The facility will consolidate seven warehouses, improve operational efficiency, reduce lead times, and strengthen supply chain responsiveness across the Caribbean.
• Additionally, ASBH is advancing its digital transformation strategy that incorporates automation, AI, and advanced analytics to enhance decision-making, productivity, and service delivery. This initiative is also well underway at its subsidiary Caribbean Producers Jamaica Limited (CPJ) and is expected to be completed in 2025.

(Source: Trinidad Express)

• The Bank of Canada will hold interest rates at 2.75% on Wednesday as policymakers await further news on an economy that grew faster than expected last quarter, with at least two more cuts likely this year, according to a majority of economists in a Reuters poll.
• That strong consensus around the upcoming decision came after data on Friday showed the economy grew quicker than predicted last quarter, at 2.2%. The surprising growth was primarily driven by exports as U.S. companies rushed to stockpile Canadian goods before U.S. President Donald Trump's tariffs took effect.
• Lower household spending and weak domestic demand, however, suggest a downturn is coming. Also, Trump's recent announcement that he would double tariffs on imported steel and aluminum to 50% could further worsen the outlook. Still, solid economic growth in Q1 and core inflation flirting with the upper end of the BoC's 1-3% target range will provide ample reason for the central bank to hold rates this week for a second straight meeting.
• Prior to the release, economists were unsure about the decision. Among top Canadian banks, BMO, CIBC, and TD shifted their call to a pause from a cut, while Scotiabank stood pat on their earlier view of no change. The BoC has already cut the rate by a cumulative 225 basis points since June 2024.
• Although there was no clear consensus on where rates would be by end-2025, nearly 75% of economists - 17 of 23 - said the BoC would cut rates at least twice more this year, including eight forecasting another two reductions, seven saying a further three cuts, and two a further four.

(Source: Reuters)