Caribbean outlook improves but challenges persist

2020 ◽  
Keyword(s):  
Economic Policy ◽  
Oil Production ◽  
Business Climate ◽  
Content Type ◽  
Hurricane Damage ◽  
Competing Interests ◽  
Us Economy ◽  
Revenue Streams ◽  
The Caribbean ◽  
Economic Outlook

Subject Improving Caribbean economic outlook. Significance There is growing evidence from across the Caribbean that the business climate is improving. Property and tourist markets are doing well, driven by a strong US economy and increased investments from Asia. Domestic economic policy has become more effective, perhaps seen most clearly in Jamaica; supported by rising revenue streams from citizenship by investment programmes and oil production (in Guyana). Many governments have also navigated successfully the impacts of recent hurricane damage and high rates of crime. Impacts Despite significant improvements, underlying problems and geopolitical tensions remain. Continued dependence on tourism renders the region vulnerable to concerns such as the spread of coronavirus. Balancing the competing interests of Washington, Beijing and Caracas will challenge investment-hungry Caribbean states.

Slower Chile growth will bring electoral challenges

2019 ◽  
Keyword(s):  
Economic Performance ◽  
Living Standards ◽  
Gdp Growth ◽  
Foreseeable Future ◽  
Content Type ◽  
Lower Middle Class ◽  
External Conditions ◽  
World Economic ◽  
The Caribbean ◽  
Economic Outlook

Subject Chile's economic outlook. Significance On July 23, in an update of its World Economic Outlook, the IMF slashed its forecast for economic growth this year in Latin America and the Caribbean from 1.4% to 0.6%, due principally to a sharp cut for Brazil. By contrast, the reduction for Chile, from 3.4% to 3.2%, was small but may err on the side of optimism. Impacts Dependence on copper remains a key challenge for Chile as regards both GDP growth and fiscal revenues. Slower growth particularly worries the new lower-middle class, eager for further gains in living standards. In the foreseeable future, Chile’s economic performance will likely be constrained by external conditions.

Prospects for Central America/Caribbean in 2018

2017 ◽  
Keyword(s):  
Natural Disasters ◽  
Central America ◽  
Latin American ◽  
Public Debt ◽  
Negative Impact ◽  
Oil Prices ◽  
Content Type ◽  
Us Economy ◽  
The Us ◽  
The Caribbean

Subject Prospects for Central America and the Caribbean in 2018. Significance Most countries in Central America and the Caribbean (CA/C) grew above the Latin American average in 2017, with low oil prices and the recuperation of the US economy helping to drive positive economic outcomes. Challenges still facing the sub-region include corruption, high public debt and the negative impact of natural disasters.

COVID-19 will hit US GDP but recovery may be V-shaped

2020 ◽  
Keyword(s):  
Market Liquidity ◽  
Economic Downturn ◽  
Content Type ◽  
The Public ◽  
Us Economy ◽  
The Us ◽  
Home Sales ◽  
The Government ◽  
National Emergency ◽  
Economic Outlook

Subject US economic outlook. Significance Before the COVID-19 outbreak, economic activity was growing at 2.0-2.5%, the stock market and employment were close to record highs, new home sales were rising and consumer spending had momentum. The immediate outlook for the US economy is now very unclear as the number of COVID-19 cases has surged above 3,800 and the virus is present in 49 states, prompting President Donald Trump to declare a national emergency on March 13. To bolster financial market liquidity and support businesses and households, the Federal Reserve (Fed) cut rates by 100 basis points to 0-0.25% on March 15. Impacts The public spending for the COVID-19 outbreak will add to the budget deficit as no party is willing to raise taxes in an election year. The Fed may cut rates more but will risk inflation if rates stay low too long; if recovery is rapid, rates may rise sooner than expected. Heavily indebted firms and individuals will seek assistance from the government, especially in the travel and entertainment industries. A sharper economic downturn will test Trump’s managerial skill as his voters expect him to be able to resolve their problems quickly.

Islamic State finances can withstand oil losses

2016 ◽  
Keyword(s):  
Oil Production ◽  
Living Conditions ◽  
Islamic State ◽  
Extensive Area ◽  
Content Type ◽  
Limited Impact ◽  
Post Conflict ◽  
Wide Range ◽  
The Us ◽  
Revenue Streams

Significance The US-led coalition operating in Iraq and Syria has stepped up efforts to disrupt ISG's financial operations in recent months, primarily through the bombing of oil production sites and tanker trucks. However, oil is only part of the group's revenue base, and the strikes have had limited impact on ISG's other revenue streams, which mainly arise from taxes levied on a wide range of transactions and assets within the extensive area under its control. Impacts ISG's continued territorial hold will increase the risk of fragmentation of the Iraqi state. It will also complicate the efforts of any post-conflict government in Syria to re-establish nationwide control. Coalition strikes on oil facilities could worsen living conditions in ISG areas and provoke a fresh refugee exodus.

Nigerian economic policy likely to stutter

2016 ◽  
Keyword(s):  
Economic Policy ◽  
Policy Formulation ◽  
Growth Potential ◽  
Content Type ◽  
National Assembly ◽  
Investor Confidence ◽  
Oil Sector ◽  
The Government ◽  
First Time ◽  
Economic Outlook

Subject Nigeria's economic outlook. Significance The economy contracted by 2.24% year-on-year in the third quarter, sharper than the 2.10% registered in second quarter, led by the oil sector’s continuing decline. The non-oil sector experienced a slight rebound, expanding for the first time this year. However, results here may prove fleeting as the policy environment becomes inimical to growth into 2017. Implementation of next year’s budget is already at risk from the ongoing stand-off between lawmakers and the presidency, while proposed new foreign exchange (forex) controls could further delay the return of crucial investments. Impacts The medium-term expenditure framework is unlikely to ease investor concerns over the government’s economic policy formulation capacity. Potential lenders may demand external policy assistance -- possibly from the IMF -- before considering extending credit to the government. Delays in the national assembly approving the 2017 budget could further undermine investor confidence and hamper growth potential.

Politics cloud positive Moroccan economic outlook

2018 ◽  
Keyword(s):  
Economic Policy ◽  
Prime Minister ◽  
Investor Sentiment ◽  
Balance Of Payments ◽  
The Political ◽  
Content Type ◽  
Protest Movements ◽  
Positive Indicators ◽  
Parliamentary Politics ◽  
Economic Outlook

Subject Effect of politics on the economy. Significance Morocco’s main sources of foreign exchange showed healthy increases across the board in 2017, according to the most recent balance of payments data released in January. However, these positive indicators have been overshadowed by a cloudy political outlook. An intervention by Abdelilah Benkirane, the charismatic former prime minister, has created ructions both within his Justice and Development Party (PJD) and it its governing coalition with five other parties. Impacts Political squabbling plays into the hands of the king: it presents the palace as the most stable and effective institution. However, the devaluation of parliamentary politics could further erode trust in the system, and swell the ranks of protest movements. The political wrangling undermines the government’s economic policy and could sabotage positive investor sentiment.

Latin America remittances will rise despite obstacles

2018 ◽  
Keyword(s):  
United States ◽  
Latin America ◽  
The United States ◽  
Developing Nations ◽  
Employment Opportunities ◽  
Content Type ◽  
Us Economy ◽  
The Us ◽  
The Caribbean

Subject Remittances to Latin America. Significance Family remittances to Latin America and the Caribbean (LAC) totalled 80 billion dollars in 2017, up from 74 billion in 2016. The record amount was mainly due to a robust economy and increasing employment opportunities in the United States. Impacts The US economy will again drive remittances growth this year, but immigration crackdowns could create downside risks. The slow reduction in sending costs will limit the development impact of remittances in LAC and other developing nations. So-called de-risking and regulatory burdens are high obstacles to remittances growth.

Plans for Mexico’s Pemex look increasingly unrealistic

2020 ◽  
Keyword(s):  
Economic Policy ◽  
Oil Prices ◽  
Oil Production ◽  
Private Investment ◽  
Compound A ◽  
Content Type ◽  
Oil Sector ◽  
Oil Company

Subject Pemex problems. Significance State-owned oil firm Pemex announced losses of 562.1 billion pesos (23.6 billion dollars) in the first quarter of 2020. The results compound a 34.9-billion-dollar loss recorded in 2019. Pemex is already the world’s most indebted oil company and with global oil prices at some of their lowest-ever levels, any potential recovery looks a distant prospect. President Andres Manuel Lopez Obrador (AMLO) has nevertheless reaffirmed his government’s determination to boost oil production and refining in an effort to return the company to its former glory. Impacts Mexican hopes of boosting oil output will raise tensions with the OPEC+ group, which agreed to limit production in April. AMLO’s aversion to private investment in the oil sector is unlikely to change but low prices will weigh on investor interest anyway. Oil hedges will compensate for the price fall to some degree, but not entirely. Low oil prices and an inadequate economic policy will keep the peso undervalued.

Brexit will accentuate global market distortions

2016 ◽  
Keyword(s):  
Interest Rates ◽  
Global Market ◽  
Bond Yields ◽  
Equity Prices ◽  
Content Type ◽  
Us Economy ◽  
The Us ◽  
The Uk ◽  
Economic Outlook ◽  
The Eu

Subject Outlook for post-Brexit markets. Significance The UK vote to leave the EU is exacerbating distortions in financial markets. Government bond and equity prices are rising, sending contradictory signals about the global economic outlook. Yields on US and German bonds partly retraced their steps last week as initial fears about the consequences of the Brexit vote diminished. However, the yield on ten-year Treasuries remains 20 basis points (bp) lower than on referendum day, June 23, and the S&P 500 index stands close to a record high. The expanding universe of negative bond yields is fuelling investor appetite for risk assets, including equities. Impacts Markets may be underestimating the likelihood of higher US interest rates given recent signals of improvement in the US economy. Demand for safe-haven assets could stay strong, with the price of gold rising 5.6% since the referendum. Heightened uncertainty may mean that the oil price rally is over; it could even reverse given the persistent supply glut.

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