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Jamaica (Latin America Monitor - Caribbean)

Tue, 07 Feb 2012 00:00 GMT

In mid-January, Police Commissioner Owen Ellington announced that the Jamaica Constabulary Force is aiming to cut the murder rate by two thirds by 2030, (bringing it to 12 out of every 100,000 people), an initiative which is in line with the government's Vision 2030 development plan. Jamaica has struggled to shore up its security situation in recent years, with 1,125 murders committed in 2011. Though this is a step in the right direction, a strong government effort will be necessary to make substantial improvements in the country's homicide and crime rates, one of the highest in the region.

US Signals Portend Better 2012 (Latin America Monitor - Caribbean)

Tue, 07 Feb 2012 00:00 GMT

BMI View: While we have downgraded our real GDP growth outlook for Antigua and Barbuda for 2011 and 2012, we believe that 2012 will be a better year for the islands' flailing economy. While the eurozone's growth prospects remain weak, signs that a US economic recovery continues to take shape provides some moderate cause for optimism. That said, we believe that it will be a long time before the islands' return to pre-crisis growth levels.

Macroeconomic Forecast Trinidad & Tobago (Latin America Monitor - Caribbean)

Mon, 06 Feb 2012 00:00 GMT

BMI View: Inflation ticked down from 5.7% y-o-y in November 2011 to come in at 5.3% in December. The slight decline in headline inflation was impacted by a slowdown in food price inflation, which ended the year at 10.9%. We see a modest improvement in supply-side inflationary pressures in 2012, as our Commodities team forecasts a slowdown in food prices, informing our end-2012 inflation rate forecast of 4.0%.

Guyana (Latin America Monitor - Caribbean)

Tue, 07 Feb 2012 00:00 GMT

Though President Donald Ramotar has yet to name a tourism minister following his December 2011 inauguration, he emphasized the sector's importance and his government's strong support for it at an industry event in late January. He noted that the country's physical attributes create potential for Guyana to become one of the most popular tourist destinations in the Caribbean. The president also stated that the government would step up to provide support, including financing, in the face of upcoming challenges for the

Macroeconomic Forecast Jamaica (Latin America Monitor - Caribbean)

Tue, 07 Feb 2012 00:00 GMT

BMI View: Jamaica's foreign reserves fell to US$2.82bn in December 2011, representing a decline of 5.3% y-o-y. Given the volatility of the country's external account dynamics, we do not rule out a brief dip again in reserves in 2012. That said, given that we do not anticipate a balance of payments crisis in 2012, we forecast that overall, foreign reserves will rise to US$3.0bn by the end of the year.

Macroeconomic Forecast Barbados (Latin America Monitor - Caribbean)

Tue, 07 Feb 2012 00:00 GMT

BMI View: Inflation came in at 11.2% y-o-y in October 2011, rising for the seventh consecutive month. The country is highly susceptible to imported inflationary pressures, and inflation was driven in part by historically high oil prices in 2011 (oil imports account for about 25% of total imports). However, given that our Commodities team forecasts a slight moderation in commodities prices in 2012, we believe supply side inflationary pressures and headline inflation should cool somewhat this year, informing our 8.0% year-end inflation forecast.

Reform Agenda Needs External Support (Latin America Monitor - Caribbean)

Mon, 06 Feb 2012 00:00 GMT

We reiterate our belief that Cuban President Raúl Castro's reform agenda is likely to boost the Cuban economy in the long-term, as the economy moves further along its capitalist transition. That said, we do not believe that a substantial change can occur in the coming years, unless Cuba is supported by foreign capital and expertise, and a more accommodative US policy.

Trinidad & Tobago (Latin America Monitor - Caribbean)

Mon, 06 Feb 2012 00:00 GMT

Errol McLeod, Minister of Labour, resigned from his post at the helm of the Movement for Social Justice (MSJ), a member of T&T's five party ruling coalition. This move also followed reports that MSJ members are unhappy with the government for its treatment of the working class and the suggestion of placing a wage cap on continuing negotiations with public sector workers. McLeod said the move would allow him to focus more on his ministerial portfolio and his duties as member of parliament. McLeod's resignation comes only months after Finance Minister Winston Dookeran resigned from the leadership of his party.

Barbados (Latin America Monitor - Caribbean)

Tue, 07 Feb 2012 00:00 GMT

The beleaguered Four Seasons luxury resort project hit another roadblock recently, as Tullow Oil chief executive officer, Aiden Heavey, is reported to have filed a lawsuit against the project in Barbados's supreme court in early February. Heavey is one of many high profile investors in the project, and is not the only one seeking to get a return of his investment. Construction on the project halted in 2010, as financing dried up following the global financial crisis and sales of villas slowed. The project has struggled to restart since then, with several investors looking to exit the project.

Macroeconomic Forecast Costa Rica (Latin America Monitor - Central America)

Mon, 06 Feb 2012 00:00 GMT

BMI View: Inflation continued to moderate in January 2012, coming in at 4.2% y-o-y, down from 4.7% in December 2011. We believe inflation will remain relatively stable in 2012, in line with our end-year forecast of 4.8%, as demand side pressures will remain modest, though further weakness in Costa Rican colón could keep inflation closer to the upper limit of the central bank's target band of 3%-5% for 2012.

Macroeconomic Forecast Guyana (Latin America Monitor - Caribbean)

Tue, 07 Feb 2012 00:00 GMT

BMI View: Guyana's total public external debt rose by 13.1% y-o-y in Q311 to US$1.1bn, in line with our full year estimate for 2011. We believe the country's external debt will continue to grow in 2012, on the back of rising public financing needs, and in line with our forecast for it to end the year at US$1.2bn, representing 5.4% growth from 2011 levels.

Costa Rica (Latin America Monitor - Central America)

Mon, 06 Feb 2012 00:00 GMT

President Laura Chinchilla's approval ratings continued to slip in early January, with only 23% of citizens approving of her performance (down from 29% in September 2011), according to news reports. Furthermore, 75% of people disapproved of the proposal to replace the 13% national sales tax with a 14% value added tax, a centrepiece of her government's tax reform package. The president's approval ratings, as well as her legislative agenda, have struggled in recent months on the back of the stalled tax reform package.

Tough Choices Ahead (Latin America Monitor - Caribbean)

Tue, 07 Feb 2012 00:00 GMT

BMI View: Barbados President Freundel Stuart will walk a rough path in 2012, as his administration is caught between the need to shrink the country's fiscal deficit and the risk of choking off an already anaemic economic growth story. We expect political tensions to heighten ahead of the January 2013 parliamentary elections, with the possibility of an uptick in social unrest if the government is forced to implement harsh austerity measures.

ECCU Banking Sector A Source Of Weakness (Latin America Monitor - Caribbean)

Tue, 07 Feb 2012 00:00 GMT

BMI View: The best case scenario for the East Caribbean Currency Union (ECCU)'s banking sector is one of very weak growth over the next few years. Although the sector faces limited systemic risks, given its size as a proportion of the regional economy, this weak outlook spells bad news for ECCU growth.

Macroeconomic Forecast Puerto Rico (Latin America Monitor - Caribbean)

Mon, 06 Feb 2012 00:00 GMT

Consumer price inflation in Puerto Rico ended the calendar year at 3.3% y-o-y, just below our end-2011 forecast of 3.5%. As global commodity prices continue to moderate, easing imported inflationary pressure, and our expectations of a weaker domestic demand story in the coming quarters, we are sticking to our end-2012 inflation forecast of 3.0% y-o-y for the time being. We note however, that a weaker global economic outlook and a further consolidation in global commodity prices (not our core scenario) poses modest downside risk to this view.