News Release
31 January 2002
JAMAICA: BALANCE OF PAYMENTS DEVELOPMENTS
October 2001 & April to October 2001
The current account of the balance of payments recorded a deficit of US$125.0MN for October
2001 relative to the deficit of US$51.9MN recorded for October 2000. With the exception of the
income sub-account, all the sub-accounts contributed to the widening of the deficit.
Merchandise Trade
Relative to October 2000, the deficit on the merchandise trade account widened by US$47.5MN to
US$179.9MN, reflecting the combined effect of a US$17.2MN reduction in earnings from exports
and a US$30.3MN expansion in payments for imports. Contributing to the decline in the value of
exports were contractions of US$13.8MN and US$6.4MN in receipts from alumina and nontraditional exports, respectively. The growth in imports was attributed to respective expansions of
US$35.3MN and US$11.0MN in raw material and capital goods imports.
Services
The services account recorded a deficit of US$1.2MN in October 2001, relative to the surplus of
US$14.8MN for October 2000.
This deterioration was influenced mainly by a decline of
US$12.0MN in net travel receipts, which reflected an 18.4 per cent decline in total visitor arrivals
and a contraction of 12.5 per cent in visitor expenditure consequent on the events of 11 September.
Income
The deficit on the income account narrowed by US$6.4MN to US$14.8MN for October 2001 relative
to October 2000. The narrowing of the deficit reflected a reduction in net investment income
outflows of US$6.2MN, primarily associated with a decline in official interest payments.
Current Transfers
For October 2001, net receipts from current transfers declined by US$16.0MN to US$70.9MN
relative to October 2000. A contraction of US$24.2MN in net inflows to the official sector, related to
the non-repetition of payments for cellular licenses, primarily accounted for this performance.
Capital and Financial Accounts
Within the financial account, net private investments amounting to US$72.3MN was insufficient
to finance net official outflows of US$5.6MN, as well as the deficit on the current account.
Consequently, there was a drawdown of US$59.2MN in the net international reserves of the Bank
of Jamaica.
For the period April to October 2001, the current account recorded a deficit of US$348.4MN
relative to the deficit of US$189.6MN for April to October 2000. With the exception of the current
transfers, all the sub-accounts contributed to the deterioration on the current account for the review
period.
Merchandise Trade
The deficit on the merchandise trade account for the review period widened by US$98.4MN to
US$894.8MN, relative to the deficit recorded for April to October 2000. The deterioration in the
trade account reflected a US$91.3MN increase in imports, as well as, a decline of US$7.1MN in
export earnings. The growth in imports was attributed to an increase in payments of US$51.3MN,
US$43.6MN and US$17.1MN for capital goods, raw materials and free zone imports, respectively.
Increased expenditure on communications equipment for the telecommunications sector
contributed to the growth in capital goods imports. The purchase of parts for the national airline,
industrial supplies for the productive sector, and inputs for food processing was largely responsible
for the increase in raw material imports. The decline in the value of exports in the review period
stemmed mainly from a contraction of US$46.5MN in garment exports.
Services
For the period April to October 2001, the services account recorded a surplus of US$295.0MN, a
decline of US$21.1MN relative to the comparable period of 2000. The deterioration was largely
attributed to the reduction of US$21.0MN in net travel receipts, which was associated with the
social disturbances of July and the events of 11 September.
Income
The income account widened by US$57.7MN for the review period, reflecting increased imputed
profit remittances by the direct investment companies, as well as higher interest payments on
Government of Jamaica foreign debt.
Current Transfers
For April to October 2001, net receipts from current transfers were US$501.3MN, US$18.4MN
above the figure recorded for April to October 2000. An increase of US$89.8MN in net private
sector transfers offset the decline of US$71.4MN in official inflows, the latter reflecting the nonrepetition of flows associated with the sale of cellular licenses in the corresponding period of 2000.
Capital & Financial Accounts
Within the financial account, net official inflows of US$264.1MN and net private investment
inflows of US$284.5MN were more than sufficient to finance the deficits on the current and capital
accounts. Consequently, there was a build-up of US$191.2MN in the net international reserves of
the Bank of Jamaica. At the end of October 2001, the Bank’s gross reserves was US$1546.3
million, representing approximately 27.0 weeks of goods imports or 18.3 weeks of imports of goods
and services.
The following table shows the balance of payments for October 2000, October 2001 and for the
fiscal periods April to October 2000/01 and April to October 2001/02.
BALANCE OF PAYMENTS SUMMARY
(US$M)
1/
2/
1/
2/
October October Apr-Oct Apr-Oct
2000
2001 2000/01 2001/02
1. CURRENT ACCOUNT
A. GOODS and SERVICES
a. GOODS BALANCE
Exports (f.o.b.)
Imports (f.o.b.)
-51.9
-117.6
-132.4
116.8
249.2
-125.0
-181.1
-179.9
99.6
279.5
-189.6
-480.3
-796.4
887.0
1683.4
-348.4
-599.8
-894.8
879.9
1774.7
b. SERVICES BALANCE
Transportation
Travel
Other Services
14.8
-26.2
59.5
-18.5
-1.2
-32.6
47.5
-16.1
316.1
-150.2
626.1
-159.8
295.0
-162.8
605.1
-147.3
B. INCOME
Compensation of employees
Investment Income
-21.2
11.9
-33.1
-14.8
12.1
-26.9
-192.2
42.0
-234.2
-249.9
52.0
-301.9
C. CURRENT TRANSFERS
Official
Private
86.9
26.6
60.3
70.9
2.4
68.5
482.9
105.0
377.9
501.3
33.6
467.7
2. CAPITAL & FINANCIAL ACCOUNT
A. CAPITAL ACCOUNT
a. Capital Transfers
Official
Private
51.9
0.6
0.6
1.5
-0.9
125.0
-0.9
-0.9
0.0
-0.9
189.6
-1.4
-1.4
6.8
-8.2
348.4
-9.0
-9.0
0.3
-9.3
0.0
0.0
0.0
0.0
51.3
-28.9
-9.6
89.8
0.0
125.9
-5.6
72.3
59.2
0.0
191.0
97.1
236.1
-142.2
0.0
357.4
264.1
284.5
-191.2
0.0
b. Acq./disposal of non-prod. non-fin'l assets
B. FINANCIAL ACCOUNT
Other official investment
Other private investment 3/
Reserves
Govt. Reserves
1/ Revised
2/ Provisional
3/ Includes errors & omissions
Bank of Jamaica