DOMESTIC ECONOMIC INDICATORS

Inflation Rate

The 12-month point-to-point inflation rate has declined by 41 basis-points to 5.81% within the BOJ’s inflation target of 4%-6%. This is the lowest point to point inflation rate since July 2021.The year-over-year movement was primarily driven by a 16.85% point-topoint increase in the ‘Restaurant and Accommodation Services’ division, along with a 10.31% and increase in the ‘Food and Non-Alcoholic Beverages’ division. These increases were however tempered by a 3.09% point-to-point decrease in the ‘Housing, Water, Electricity, Gas and Other Fuels’ division. The reduction in ‘Housing,

Water, Electricity, Gas and Other Fuels’ was driven by the 13.42% year over year decline in ‘Electricity, Gas and Other Fuels’ Month-over-month inflation decreased by 0.47%. This was driven mainly by a 4.21% and 0.08% monthly decreases in ‘Housing, Water, Electricity, Gas and Other Fuels’ and ‘Transport’ respectively. The decrease in ‘Housing Water, Electricity, Gas and Other Fuels was driven by the reduced electricity rates which resulted in a 12.47% decline in the ‘Electricity, Gas and Other Fuels’ division. The monthly declines were tempered by a 0.65% monthly increase in ‘Food and Non-Alcoholic Beverages’ as a result of higher prices in agricultural ground provisions such as sweet potato, yam, lettuce and tomato.

Interest Rates

Inflation has trended below the overnight policy rate two consecutive months

The BOJ’s overnight policy rate was held at 7.00%, after the Monetary Policy Committee (MPC) meeting on May 19, 2023. The rate was maintained even though positive inflation results for April now sees inflation within the target range of 4%-6%. The rate is likely to be maintained until Q4 of 2023 as the interest rates offered on deposits and loans have continued to see small increases in line with the policy.

Exchange Rate

At the end of April 2023, the JMD weakened month-over-month, with a depreciation of 1.57% against the US Greenback. According to the BOJ’s Weighted Average Selling Rate (WASR), the local dollar gained $0.54, to end the month at $153.3126. There were four BFXITT interventions in April to stabilize the exchange rate.

Net International Reserves

The stock of net reserves experienced a US$19.47 million increase month-overmonth in April to close at US$4.17 billion. Foreign assets increased by US$20.39 million, mainly due to a US$25.93 million increase in securities and US$5.67 million decrease in currency deposits. Foreign liabilities decreased by US$0.91 million with liabilities to the IMF accounting for 100% of total foreign liabilities which amounted to US$533.12million.

OVERSEAS United States

The Institute of Supply Management (ISM) Purchasing Manufacturing Index (PMI) ended April at 47.10%, 80 bps higher than its March figure of 46.30%. This was the fifth month of contraction after 30 months of continuous growth. The slight month over month improvement shows that the manufacturing sector is contracting at a slower rate. This reflects companies managing outputs to better match demand for the first half of 2023 and prepare for the expected growth in the late summer/fall period. The increase in the PMI was supported by a 140-basis point increase in the New Orders Index and a 220-basis point growth in the New Exports Order Index. Similarly, the ISM Services Index registered a marginal 70 bps increase from 51.20% in March to 51.90% in April.

The release from the US National Association of Realtors (NAR) on pending home sales indicated an decreased by 5.20% to 78.90 in March, the first contraction since November 2022. Year-over-year pending sales fell by 23.2% when compared to March 2022. Chief economist at the NAR, Lawrence Yun, stated that the lack of housing inventory coupled with 28% of homes selling above list price have been constraints to rising sales. Scarcity exists as the limited housing supply is not meeting the national demand.

The Consumer Price Index for all Urban Consumers (CPI-U) increased by 4.90% in April on a point-to-point seasonally unadjusted basis and 0.40% on a monthover-month seasonally adjusted basis. On a point-to-point basis, the increase was due to a 5.50% increase in the All items Less Food Index, while the energy index has decreased 5.10% on a point-to-point basis. The 4.90% seasonally unadjusted increase is the lowest 12 month increase since April 2021, proof that the pass-through effects of the Fed’s monetary tightening’s are being realized. The Producer Price Index (PPI) for final demand decreased by 0.50% month-overmonth on a seasonally adjusted basis in March 2023 and increased by 2.70% on a point-to-point unadjusted basis. The 0.50% decline in the final demand index was led by a 1.00% decrease in the prices for final demand goods.

Following the US Federal Reserve Federal Open Market Committee (FOMC) meeting on May 2, 2023, the Fed Funds Rate was raised for a tenth time by 25 bps bringing the target range to 5.00% - 5.25%. This sees the feds fund rate at its highest since August 2007, though the committee has hinted that the tightening cycle has approached the end. The FOMC has chosen to remain strict on its efforts to reduce inflation to its 2% target range. The next Fed Open Market

Committee meeting is scheduled to take place on June 13-14, 2023.

For the month of April 2023, the unemployment rate decreased marginally to 3.40% from the 3.50% rate recorded in March. Total non-farm payroll rose by 253,000. Professional and business services, health care, social assistance, leisure and hospitality, contributed the most to the increase in employed persons. The labour force participation and the employment-to-population ratio remained at 62.60% and 60.40% respectively.

China

In April 2023, China’s national Consumer Price Index (CPI) increased by 0.1 percent year-on-year. The urban CPI increased by 0.2 percent while the rural CPI increased by 0.1 percent On the other hand, food prices increased by 0.4 percent, while nonfood prices increased by 0.1 percent. Additionally, consumer goods prices decreased by 0.4 percent and service prices increased by 1.0 percent. For the period January to April, on average, the national consumer price increased by 1.0 percent over the same period last year.

In March, China's manufacturing industry had a Purchasing Manager Index (PMI) of 9.2 percent, which was 2.7 percentage points lower than the previous month. The PMI fell below the threshold indicating that prosperity level of the manufacturing industry fell.

In April 2023, the total value of imports and exports of goods in China was 3,434.7 billion yuan, indicating a 8.9 percent year-on-year increase. The total value of exports was 2026.5 billion yuan, which was up by 16.8 percent. The total value of imports was 1408.1 billion yuan, showing a slight decrease of 0.8 percent. The trade balance was 618.4 billion yuan in surplus.

REGIONAL Barbados

Central Bank Governor, Dr Kevin Greenidge, has stated that the Barbados economy is now fully recovered following the slump caused by the COVID-19 pandemic. He reported this today during his first quarterly press conference since being appointed in March. The economy experienced its eight consecutive quarter of expansion, as it grew by 6.4 per cent in the first quarter. Tourism drove the expansion during the quarter with improved performance in all the major source markets. Arrivals more than doubled those of the corresponding period of 2022, reaching 78 per cent of 2019 or the preCOVID levels. The growth in tourism spilled over into the other sectors of the economy, resulting in the unemployment rate falling by 3.7 percentage points to 7.2 percent at the end of 2022, relative to 2021. This unemployment rate is the lowest on record since September 2007.The Central Bank is predicting that the economy will grow by between four and five per cent this year. Continued expansion in tourism and private sector investments are key to driving this performance for the rest of 2023, while the Government’s ongoing public investment program should provide further impetus to the economy.

Dominican Republic

The Dominican Republic's GDP decreased to 4.9 percent for the period of January to December 2022, compared to the 12.3 percent GDP achieved during the same period in 2021. In April, the monthly variation of the consumer price index (CPI) was 0.24%, leading to a decrease in general inflation from 5.90% in March 2023 to 5.15%. The Central Bank of the Dominican Republic (BCRD) attributes this continuous decline in inflation to the monetary restriction program and government subsidies, as well as the moderation of domestic demand.

Taking into account the inflation rate, the Central Bank of the Dominican Republic (BCRD) decided to maintain its monetary policy interest rate (TPM) at 8.50% per year during its monetary policy meeting in April 2023. The rate of the permanent liquidity expansion facility (1-day Repos) remains at 9.00% per year, and the rate of interestbearing deposits (Overnight) continues at 8.00% per year.

Sources: Statistical Institute of Jamaica (STATIN), Bank of Jamaica (BOJ), Planning Institute of Jamaica (PIOJ), Bloomberg, International

Monetary Fund (IMF), Observer, Gleaner, US Bureau of Labour Statistics, US Census Bureau, Institute for Supply Management, National Association of Realtors, Central Bank of Barbados, National Bureau of Statistics of China, Central Bank of the Dominican Republic (BCRD)

*Projections/Budget

^Actual

~Actual as at April 25, 2023

* Projections are taken from Bloomberg survey of economists as of April 25, 2023