• Food and Financial Services conglomerate, Grace Kennedy Group Limited (GK) reported a net profit of $2.22Bn for the three-month period ending March 2025 (3M 2025). The 3M 2025 profit represented a 3.0% year-over-year (YoY) growth, driven by its Food and Financial Services Segment.
• GK’s Revenues amounted to $44.22Bn, reflecting a 4.4% year-over-year increase from $42.35Bn.
• Notably, its food segment - GK Foods outperformed management’s expectations, with revenue and earnings before tax growing by 3.7% and 8.2%, respectively. This growth occurred despite a challenging economic environment marked by declining demand and escalating trade tensions and was supported by its local and international subsidiaries.
• Locally, GK Food’s earnings growth was driven by Grace Foods & Services, including its retail arm Hi-Lo Food Stores and its manufacturing operations, as strong consumer demand boosted product uptake. In international markets, GraceKennedy Foods (USA) LLC delivered strong quarterly results, supported by improved performance of the Grace and La Fe brands. Additionally, Grace Foods UK and Grace Foods Canada also contributed positively to overall growth.
• In the Financial Services segment, earnings before tax increased across all sub-segments, except money services, which saw a 31.1% decline. The Insurance segment posted a strong performance, growing by 22.9%, largely driven by expansion in its motor and property insurance portfolios. Meanwhile, the Banking and Investment segment's performance was fueled by the growth of First Global Bank’s loan portfolio.
• Conversely, Money Services' performance was impacted by reduced remittance flows and transaction volumes in Guyana and Trinidad and Tobago. However, this decline was partially offset by increased market share in Jamaica, its largest remittance market.
• The Money Services segment has been experiencing a decline, driven by reduced remittance volumes. The proposed 5.0% tax on remittance flows, currently under consideration by US House Republicans and President Donald Trump, presents an additional downside risk to the company’s remittance segment. In response, Group CEO Frank James has outlined a cost-reduction strategy aimed at improving transaction efficiency and affordability for Caribbean nationals in the US, particularly through the company’s GK One platform.
• GK’s stock price has declined by 9.3% year-to-date, closing at $71.61 as of Wednesday. At this price, the stock is trading at a price-to-earnings (P/E) ratio of 8.4x, which is lower than the Main Conglomerate Sector’s average of 11.4x.                                                                                                                                                                                                                                                                                        

(Sources: JSE & NCBCM Research)

• Jamaica has exported 4.5Mn barrels of petroleum products since the start of 2024, generating more than US$500Bn in export earnings, largely from sales to Trinidad and Tobago – Science, Energy, Telecommunications and Transport Minister, Hon. Daryl Vaz disclosed. He highlighted a major milestone: a new contract to supply Trinidad and Tobago with both high-sulphur and very-low-sulphur fuel oil, projected to generate J$14Bn (US$90Mn).
• Minister Vas also noted that the deal will further strengthen Jamaica’s energy trade position in the region. Between January and December 2024, the Government, through Petrojam, supplied 11.1Mn barrels of petroleum products to both domestic and export markets.
• “This volume was achieved through a combination of refining and importing finished petroleum products. Crude oil was sourced from key partners, including Barbados, Brazil, Colombia, and Ecuador, ensuring a diversified and stable supply chain,” Minister Vaz told the House.
• Looking ahead, Minister Vaz said Petrojam will focus on optimising operations while advancing cleaner energy solutions over the next three to five years. Plans include the production and supply of ultra-low sulphur diesel (ULSD), expanding access to environmentally friendly fuels, and strengthening the liquefied natural gas (LNG) supply to support energy diversification.
• The strategy supports Jamaica’s climate change agenda that emphasises greater use of solar energy, improved refinery efficiency, and increased production of sustainable biofuels.

(Source: Caribbean National Weekly)

• In a significant boost to the local economy, regional carrier LIAT 2020 is set to double its workforce in Antigua and Barbuda by the end of this year. Tourism Minister Charles Fernandez made this announcement in Parliament on May 19, 2025, highlighting the airline’s plans to ramp up operations alongside the addition of new aircraft to its fleet.
• Currently, LIAT 2020 employs 95 staff at its Antigua base, and the airline projects that this number will increase to approximately 200 by early 2026. This expansion is expected to create new job opportunities and enhance the company's service capabilities in the region.
• Among the current workforce, 80 employees are Antiguan nationals, while the rest represent a diverse mix of talent from Dominica, Trinidad, St. Vincent, Grenada, Montserrat, St. Martin, Ethiopia, and the United Kingdom.
• Fernandez shared the update in response to a query from the Leader of the Opposition, Jamale Pringle, and highlighted the wider employment impact of the airline’s growth. “This number is expected to reach around 200 by the end of this year as more aircraft are added. By the way, this does not include indirect jobs locally. I think it’s about 300, right through the region,” he added.
• He also highlighted the progress being made in pilot training, noting that six Antiguans are currently training to fly LIAT's new jets, with four nearing completion. For the time being, the government plans for these jets to be piloted by Antiguan pilots as well as pilots from other OECS or Caribbean territories.
• Fernandez emphasised the significance of LIAT20 as a homegrown airline in strengthening Antigua and Barbuda's status as a regional aviation hub. The minister also reported strong tourism growth, observing that March 2025 experienced a record number of air arrivals, surpassing the previous high set in March 2024. Overall, arrivals in the first quarter of 2025 increased by 7.5% compared to 2019, which was the country’s best year before the pandemic.

(Source: Antigua Observer)

• Costa Rica’s tourism industry is sounding the alarm as visitor numbers keep sliding, even with a small uptick in April. The Costa Rican Tourism Institute (ICT) reported that 231,678 travellers arrived by air in April 2025, a 4.6% jump from last year’s 221,573. But folks in the business say this bump, tied to Easter Week’s timing, doesn’t tell the whole story. Tourism, which fuels 8% of the country’s economy and supports jobs in places like Guanacaste and Limón, is facing tough times.
• According to the ICT, the first three months of 2025 welcomed a total of 632,000 visitors, reaching 63% of the pre-pandemic visitor numbers from 2019. The increase in April can be attributed in part to Easter Week falling in April this year, unlike in March of 2024. This timing contributed to hotel bookings in beach towns nearly reaching 98%, as reported by the Costa Rican Hotels Chamber.
• However, Tadeo Morales from Movimiento Turismo por Costa Rica (Tourism Movement for Costa Rica) warns it’s not a real recovery. “We’re seeing seasonal spikes, not growth,” he said. Morales noted that the figures from April 2025 are nearly identical to those from April 2023, another month of Easter Week, indicating that the industry remains stagnant.
• Tourism is facing several challenges. The strong colón, which is currently at ₡500 per U.S. dollar, makes Costa Rica more expensive compared to neighbouring countries like Panama or Colombia. Additionally, a new tax on tourism services and a reduction in flights, with some airlines cutting seats by 15-41%, are contributing to the difficulties, according to the National Chamber of Tourism (CANATUR).
• Concerns about safety, such as a U.S. travel advisory warning about crime near San José’s airport, along with health alerts regarding histoplasmosis linked to caving¹, are deterring visitors. North American travellers, who represent Costa Rica’s largest market, experienced a 7.2% decline in February, with the U.S. seeing a drop of 7.3%.
• Additionally, industry reports indicate that fewer people are searching for trips to Costa Rica online, suggesting weaker demand in the future. The ICT’s “Only the Essentials” campaign aims to promote Costa Rica in the U.S. and Canada, but CANATUR’s Shirley Calvo emphasised that more needs to be done, including addressing the exchange rate. As May's low season approaches, businesses are worried about tougher months to come.

^{________________________________________
1}On March 18, 2025, The U.S Embassy alerted citizens of a recent spike in histoplasmosis risks associated with caving activities in Costa Rica. Histoplasmosis is a lung infection caused by a fungus which is primarily found in soil contaminated with bat or bird droppings. Histoplasmosis can lead to serious and potentially life-threatening complications if left untreated.

(Source: Tico Times)

• The outlook for the U.S. economy remains weak despite a temporary cooling of the U.S.-China trade war, a Reuters poll of economists showed, with a debate over the country's fiscal health hanging in the balance.
• A 90-day truce to temporarily slash steep U.S.-China import duties has marginally reduced U.S. recession risks, but the fiscal outlook is worsening ahead of an imminent vote in Congress on President Donald Trump's sweeping tax-cut bill following a sovereign credit rating downgrade from Moody's on Friday.
• Economists in a May 14-21 Reuters poll were unanimous the Trump administration's policies have hurt the economy, with over 55% saying "significantly hurt". However, after big downgrades to their growth and upgrades to inflation forecasts in April, economists kept these broadly unchanged in May.
• The US economy, which contracted 0.3% last quarter largely due to a record surge in imports, is forecast to grow 1.5% this quarter. It would grow just 1.4% this year, a sharp slowdown from last year's 2.8%. Next year, it was forecast to expand 1.5%. The median probability of a U.S. recession over the coming year did, however, decline to 35% from 45% in April.
• Economists barely changed their views on inflation, expected to average above the Fed's 2% target until at least 2027, echoing consumer expectations which are already at a multi-decade high.
• Fed officials have highlighted elevated risks of a resurgence in inflation, primarily due to U.S. tariff policies and appear to be in no hurry to cut rates anytime soon. The federal funds rate has stayed in a 4.25%-4.50% range since the start of this year.

Source: Reuters)

• Buoyant credit and stock markets appear "out of sync" with a world gripped by geopolitical and trade uncertainty, the European Central Bank said on Wednesday.
• The warning came as part of the ECB's twice-yearly Financial Stability Review, a litany of old and new risks ranging from funds depleting their cash buffers to overvalued property markets and high government debt.
• In the latest edition, the ECB said investors might be underestimating the risk that the economy performs worse than expected, trade tensions escalate or an expected easing of monetary policy fails to materialise. "Despite the drawdowns, equity valuations remain high while credit spreads still appear out of sync with underlying credit risk," ECB vice-president Luis de Guindos said in his foreword.
• The ECB also described tariffs as "major downside risk", estimating that an increase of one standard deviation in an index measuring trade policy uncertainty lowered the median growth forecast by 0.15 percentage points after four quarters. Such a surge in uncertainty also pushed down banks' share prices by 10.4% after six months and increased their cost of borrowing on the bond market by 7 basis points, the ECB said.
• Among other risks, the ECB listed cyber attacks, concentrated investments in private markets and growing - if still tenuous - linkages between cryptocurrencies and traditional finance.

(Source: Reuters)

• Following its Monetary Policy Committee (MPC) meetings on May 16 and 19, 2025, the Bank of Jamaica (BOJ) announced a 25 basis points cut to the policy rate to 5.75%. This cut follows two rate pauses at 6.0% in February and March of 2025. The BOJ’s rate cut decision was influenced by a favourable inflation outlook and expectations of moderate improvements in the economy.
• The BOJ’s decision incorporated the fact that annual headline inflation for April 2025 of 5.3%¹ was in line with the outturn for April 2024. The stable and relatively low inflation primarily reflected the non-recurrence of price increases for regulated items (such as bus and taxi fares), which offset higher food inflation. Importantly, core inflation, which excludes the volatile prices of agricultural food products and fuel, was 4.4%, remaining below the upper limit of the 4.0% to 6.0% target since July 2023.  Moreover, the exchange rate, imported inflation, and the private sector’s expectations of future inflation have been fairly stable.
• On the economic front, the BOJ forecasted moderate improvements to the real economy “following the effects of recent shocks”. Real gross domestic product (GDP) is projected to recover in 2025, largely due to normalisation in the mining, tourism, and construction sectors. In this context, employment levels remain high, even as anecdotal data suggest that wage pressures are moderating. The central bank also noted that the current account of Jamaica’s balance of payments is projected to remain in surplus over the near term, and that international reserves are healthy and projected to improve further.
• Notwithstanding the positive inflation and economic signs, the central bank noted that inflation could exceed projections if geopolitical tensions escalate further, potentially disrupting international supply chains. Conversely, inflation may fall below expectations if international commodity prices decline more than anticipated or if demand conditions weaken. At the same time, the central bank highlighted uncertainty from the fast-evolving policies in the United States (US) and the global economy, and their potential implications for the domestic economic outlook.
• That said, the MPC communicated that it would be prepared to adjust the stance of monetary policy if the above-noted risks crystallise and result in an upward deviation from the inflation target.

________________________________
¹According to the Statistical Institute of Jamaica (STATIN)

(Sources: BOJ & NCBCM Research)

• Kingston Properties Limited (KPREIT) reported a net profit of US$1.00Mn for the three-months ending March 2025 (Q1 2025), representing a 5.8% increase compared to the same period last year. This performance reflected strong revenue growth, which was largely muted by rising costs. 
• The expansion of KPREIT’s property portfolio and effective property management led to higher rental income and increased property values. Rental income for Q1 2025 totalled US$1.38Mn, reflecting a 24.4% increase compared to Q1 2024. This growth was primarily driven by the addition of the 2530 Aztec West Business Park, a fully tenanted 20,000-square-foot office building in the UK and the Duke Street buildings in Jamaica, as well as improved rental rates across several properties in the portfolio.
• The growing rental income was met by a 50.0% increase in operating expenses to US$0.58Mn, driven by higher staff costs, increased professional fees related to the expansion of the UK portfolio, as well as broker fees and legal costs associated with leasing vacant spaces in Jamaica and the Cayman Islands. On the balance of faster growth in operating expenses, operating profits increased by 10.6%, which is lower than revenue growth.
• Lower fair value gains and higher net finance costs also contributed to the muted profits. The company’s fair value gains of US$0.37Mn for Q1 2025 were 37.3% lower than in Q1 2024 despite recognised gains after reclassifying an asset for disposal. Meanwhile, net finance costs increased by 18.1% to US$0.39Mn due to the growth in its debt portfolio, which funded the increase in its real estate assets under management. Notably, the company’s entrance into the UK via Aztec was financed by a US$21Mn senior secured term facility from CIBC Caribbean that also refinanced existing debt¹.
• KPEIT’s stock price has declined by 0.2% year-to-date, closing at JMD$9.41 as of Tuesday. At this price, the stock is trading at a price-to-earnings (P/E) ratio of 9.9x, which is lower than the Main Market Real Estate Sector’s average of 11.2x.

________________________________
¹The move aligns with KPREIT’s growth strategy to diversify geographically and optimise funding.

(Sources: JSE & NCBCM Research)

• Capital raised for startups in Latin America grew 26% in 2024 from 2023, more than in Europe, which was up 7%, and Southeast Asia, which shrank 34%, according to a study published on Tuesday, May 20, 2025.
• Funding for Latin American startups is also expected to increase in 2025 thanks to a young population, accelerated digitalisation and increasingly sophisticated capital, said the report from Mexican entrepreneurship network Endeavour and private equity firm Glisco Partners.
• Still, the industry faces challenges from low participation of local investment funds in later-stage investments and global volatility, the study said. "2024 was a year for redefinition. Startups that managed to adapt to changes in the market now have more solid and sustainable models," said Alfredo Castellanos, managing partner at Glisco Partners.
• The report noted domestic investors tended to invest early, while foreign ones did so after companies were more established and scalable. Capital injections in mature companies, rather than brand new ones, are increasingly dominant. Such investments made up 65% of all capital raised in 2024, compared to 46% in 2023. "There are fewer rounds, but more capital," the report said.
• Through 2025, the report identified three main trends, including the use of venture debt and mixed rounds, which combine risk capital and debt, as alternative ways of investing. Additionally, annual growth in secondary markets, where investors can buy and sell shares from each other rather than directly from the company, was projected to rise 60%, as a way for early-stage investors to secure liquidity.
• Finally, it found employee stock ownership plans were an increasingly relevant way of attracting and retaining talent, though less than 20% of Latin American startups offered them to employees due to uncertainty surrounding the financial implications.

(Source: Reuters)

• Brazil, the world's largest poultry exporter and main poultry meat importer into the European Union (EU), is no longer allowed to ship poultry and meat products to the EU due to the outbreak of bird flu, the European Commission said.
• This comes after Brazil confirmed its first outbreak of bird flu on a poultry farm last Friday, triggering protocols for a country-wide trade ban from top buyer China and state-wide restrictions for other major consumers such as Japan.
• "EU import conditions require that the country of export (Brazil) is free of Highly Pathogenic Avian Influenza," a European Commission spokesperson said in an email. "Brazilian authorities can no longer sign such animal health certificates for export into the EU, and such certificates cannot be issued. No poultry/meat products can be exported to the EU from any part of the Brazilian territory."
• Brazilian Agriculture Minister Carlos Favaro said that under existing protocols, countries including China, the European Union and South Korea would ban poultry imports from Brazil for 60 days. However, the Commission did not give any timeframe.
• In 2024, Brazil exported more than 5 million tons of poultry meat. Of these, approximately 4.4% headed to the EU, the Brazilian Animal Protein Association (ABPA) said. Of total EU poultry imports, Brazil is the main origin, with a share of 32% last year, according to official EU data. However, the volume remained rather thin, with most of the EU consumption supplied locally. Still, despite the small volumes, the cheaper, high-added-value Brazilian imports have pressured EU prices. A halt in imports is therefore likely to come as a relief for the local poultry industry.

(Source: Reuters)