News Release
06 May 2002
JAMAICA: BALANCE OF PAYMENTS DEVELOPMENTS
January 2002 & April to January 2002
January 2002
The current account of the balance of payments recorded a deficit of US$38.9MN in January 2002, relative to the
deficit of US$77.6MN recorded for January 2001. The improvement in the January 2002 balance reflected
respective reductions of US$30.5MN and US$14.6MN in the deficits on the merchandise trade and income subaccounts. These improvements were partially offset by respective declines of US$4.0MN and US$2.4MN in the
services and current transfers balances, relative to January 2001.
Merchandise Trade
The improvement in the merchandise trade deficit reflected a decline of US$48.1MN in payments for imports
(f.o.b.), which was partly countered by a US$17.6MN reduction in earnings from exports. The decline in imports
was attributed to reductions of US$56.2MN and US$4.4MN in the c.i.f. values of raw materials and capital goods,
respectively, partly offset by respective increases of US$4.6MN and US$3.9MN in consumer goods and free zone
imports. The sharp decline in raw material imports stemmed mainly from a reduction in the value of fuel imports,
due to a fall in oil prices in January 2002, relative to January 2001. Accounting for the decline in exports were
respective contractions of US$10.8MN and US$6.1MN in major traditional and non-traditional exports. The major
traditional category was influenced by a decline in the value of alumina exports, due to lower price, and the nonshipment of sugar in January 2002, stemming from the late start in reaping. The continued downturn in apparel
exports was responsible for the fall-off in non-traditional exports.
Services
The reduction in the services account stemmed primarily from a fall of US$5.7MN in net travel receipts, the result
of an 11.6 percent decline in total stopover visitor arrivals for the month, relative to January 2001.
Income
Accounting for the improvement in the income balance was reduced net investment income payments of
US$14.7MN, largely associated with lower interest payments on Government of Jamaica external debt.
Current Transfers
The out-turn for current transfers reflected a contraction of US$9.7MN in net inflows to the official sector,
stemming from lower grant flows in the month, as net private transfers (remittances) increased.
Capital and Financial Accounts
Within the financial account, net official inflows of U$20.2MN and net private investment inflows amounting to
US$27.7MN were more than sufficient to finance the deficits on the current and capital accounts, thereby
facilitating a build-up of US$7.9MN in the net international reserves of the Bank of Jamaica.
April to January 2002
The current account deficit expanded by US$205.6MN to US$535.7MN over the period April to January 2002,
relative to the deficit for the corresponding period of 2001. With the exception of current transfers, all the subaccounts contributed to the deterioration in the review period.
Merchandise Trade
The deficit on the merchandise trade account widened by US$96.0MN for the fiscal period, stemming from a
US$14.4MN increase in payments for imports (f.o.b.) and a contraction of US$81.6MN in receipts from exports.
The growth in imports was influenced by higher spending of US$42.7MN and US$11.1MN on imported capital
and consumer goods, respectively, which was countered by a decline of US$28.3MN in raw material imports.
Increased expenditure on communication equipment accounted for the growth in capital goods imports, while the
expansion in consumer goods imports was due to higher spending on food items and cellular telephones. Within
the raw material category, lower fuel imports in the context of reduced oil prices were partly offset by increased
spending on other raw materials, inclusive of food and industrial supplies. The lower value of exports was
influenced by reductions of US$36.7MN, US$35.4MN, US$16.7MN and US$11.9MN in alumina exports, nontraditional exports, free zone exports and re-exports, respectively. The contraction in the value of alumina exports
largely reflected a fall in its price, while the decline in non-traditional and freezone exports reflected the continued
downturn in the garment industry during the review period.
Services
The surplus on the services account declined by US$69.2MN for the review period, relative to the surplus in the
comparable period of 2001. This out-turn primarily reflected a contraction of US$69.0MN in net travel receipts,
which was associated with the social disturbances in July and the events of 11 September.
Income
The deficit on the income account widened by US$79.1MN for the review period, attributable to higher interest
payments on Government of Jamaica external debt, as well as increased imputed profit remittances of the
foreign direct investment companies.
Current Transfers
For the review period, net receipts from current transfers increased by US$38.7MN, relative to April to January
2001. Growth of US$120.2MN in net inflows (remittances) to the private sector more than offset the decline of
US$81.5MN in net official transfers. The decline in net official transfers was due to the non-repetition of flows
associated with the sale of cellular licenses in the corresponding period of FY2000/01.
Capital & Financial Accounts
Within the financial account, net official inflows of US$558.6MN and net private investment inflows of
US$550.3MN were more than sufficient to finance the deficits on the current and capital accounts. Consequently,
there was a build-up of US$562.4MN in the net international reserves of the Bank of Jamaica. At the end of
January 2002, the Bank’s gross reserves were US$1910.8 million, representing approximately 33.8 weeks of
goods imports or 22.8 weeks of imports of goods and services.
The following table shows the balance of payments for January 2001, January 2002 and for the fiscal periods
April to January 2001 and April to January 2002.
BALANCE OF PAYMENTS SUMMARY US$M
1/
Jan
2001
Jan
2002
2/ 1/
Apr-Jan
2000/01
1. CURRENT ACCOUNT
A. GOODS and SERVICES
a. GOODS BALANCE
Exports (f.o.b.)
Imports (f.o.b.)
-77.6
-110.4
-158.8
122.3
281.1
-38.9
-83.9
-128.3
104.7
233.0
-330.1
-723.0
-1194.7
1278.6
2473.3
-535.7
-888.2
-1290.7
1197.0
2487.7
b. SERVICES BALANCE
Transportation
Travel
Other Services
48.4
-22.5
90.8
-19.9
44.4
-21.8
85.1
-18.9
471.7
-215.9
921.8
-234.2
402.5
-232.3
852.8
-218.0
B. INCOME
Compensation of employees
Investment Income
-47.4
2.3
-49.7
-32.8
2.2
-35.0
-303.3
65.5
-368.8
-382.4
75.9
-458.3
C. CURRENT TRANSFERS
Official
Private
80.2
13.3
66.9
77.8
3.6
74.2
696.2
126.4
569.8
734.9
44.9
690.0
2. CAPITAL & FINANCIAL ACCOUNT
A. CAPITAL ACCOUNT
a. Capital Transfers
Official
Private
77.6
-1.5
-1.5
0.0
-1.5
38.9
-1.1
-1.1
0.1
-1.2
330.1
-3.2
-3.2
8.3
-11.5
535.7
-10.8
-10.8
1.8
-12.6
b. Acq./disposal of non-prod. non-fin'l assets
0.0
0.0
0.0
B. FINANCIAL ACCOUNT
79.1
40.0
333.3
546.5
Other official investment
Other private investment 3/
Reserves
-21.4
62.2
38.3
20.2
27.7
-7.9
205.6
355.4
-227.7
558.6
550.3
-562.4
1/ Revised
2/ Provisional
3/ Includes errors & omissions
BANK OF JAMAICA
2/
Apr-Jan
2001/02
0.0