News Release
14 June 2002
JAMAICA: BALANCE OF PAYMENTS DEVELOPMENTS
February 2002 & April 2001 to February 2002
February 2002
The current account of the balance of payments recorded a deficit of US$41.2MN in February 2002, representing a deterioration of US$9.0MN relative to the deficit recorded in February 2001. The widening in the deficit for the month reflected respective declines of US$11.4MN and US$15.0MN in the merchandise trade and services balances, which were partly offset by improvements of US$4.0MN and US$13.4MN in the income and current transfers accounts, respectively.
Merchandise Trade
The deterioration in the merchandise trade deficit reflected a decline of US$14.1MN in earnings from exports, which was partially countered by a US$2.7MN reduction in payments for imports (f.o.b). With the exception of exports from the free-zones, all categories of exports registered declines, the most notable being major traditional exports, which declined by US$12.5MN. The contraction in the major traditional category was largely influenced by a decline in the value of alumina exports, reflecting lower export price and volume. With regard to imports, respective reductions of US$5.1MN and US$4.8MN in the c.i.f. values of capital goods and raw material purchases were partly offset by a growth of
US$6.8MN in consumer goods imports.
Services
The reduction of US$15.0MN in the services account stemmed primarily from a fall of US$13.5MN in net travel receipts. This contraction was influenced by a decline of 14.6 per cent in overall visitor arrivals, reflecting respective reductions of 11.8 per cent and 18.1 per cent in stopover and cruise arrivals for the month, relative to February 2001.
Income
The improvement of US$4.0MN in the income balance emanated from reduced net investment income payments of US$6.2MN, which was largely associated with lower imputed profit remittances of the direct investment companies and lower interest payments on Government of Jamaica external debt.
Current Transfers
The improvement of US$13.4MN in current transfers reflected an increase of US$13.7MN in net inflows to the private sector for the month.
Capital and Financial Accounts
Within the financial account, net private investment inflows amounting to US$23.8MN was insufficient to finance a net official outflow of U$8.6MN as well as the deficits on the current and capital accounts.

Consequently there was a drawdown of US$27.8MN in the net international reserves of the Bank of
Jamaica.
April to February 2002
The current account deficit expanded by US$149.2MN to US$606.0MN over the period April 2001 to
February 2002, relative to the deficit for the corresponding period of FY2000/01. With the exception of current transfers, all the sub-accounts contributed to the deterioration in the current account.
Merchandise Trade
The merchandise trade deficit widened by US$23.8MN for the review period, the result of a contraction of US$96.5MN in receipts from exports, which was partly countered by a US$72.7MN decline in payments for imports (f.o.b.). All the export categories declined over the review period, relative to the corresponding period in FY2000/01. There was a US$23.6MN contraction in major traditional exports, largely reflecting a fall in the value of alumina exports, which was partially offset by growth in the value of bauxite exports. The contraction in alumina exports was due mainly to a fall in price, while the growth in bauxite exports was influenced by a substantial increase in export volumes. Continued downturn in the garment industry during the review period was responsible for the declines of US$35.4MN and
US$13.9MN in non-traditional and free zone exports, respectively. The decline in the value of imports was influenced by reduced spending on raw material imports, which outweighed growth in imported capital and consumer goods. Within the raw material category, lower fuel imports in the context of reduced oil prices were partly offset by higher purchases of other raw materials, inclusive of parts and accessories and industrial supplies. 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 jewellery and cellular telephones.
Services
The surplus on the services account declined by US$124.7MN for the review period, relative to the comparable period of FY2000/01. This out-turn primarily reflected a contraction of US$132.9MN in net travel receipts, which was associated with the social disturbances in July and the events of 11
September 2001.
Income
The deficit on the income account widened by US$52.8MN 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$52.1MN, relative to the similar period of FY 2000/01. Growth of US$133.9MN in net inflows to the private sector more than offset the decline of US$81.8MN 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$550.0MN and net private investment inflows of
US$603.2MN were more than sufficient to finance the deficits on the current and capital accounts.
Consequently, there was a build-up of US$534.6MN in the net international reserves of the Bank of
Jamaica. At the end of February 2002, the Bank’s gross reserves were US$1882.9 million, representing approximately 32.8 weeks of goods imports or 22.2 weeks of imports of goods and services.
The following table shows the balance of payments for February 2001, February 2002 and for the fiscal periods April to February 2001 and April to February 2002.
BALANCE OF PAYMENTS SUMMARY (US$MN)
1. CURRENT ACCOUNT
A. GOODS and SERVICES a. GOODS BALANCE
Exports (f.o.b.)
Imports (f.o.b.) b. SERVICES BALANCE
Transportation
Travel
Other Services
B. INCOME
Compensation of employees
Investment Income
C. CURRENT TRANSFERS
Official
Private
2. CAPITAL & FINANCIAL ACCOUNT
A. CAPITAL ACCOUNT a. Capital Transfers
Official
Private b. Acq./disposal of non-prod. non-fin'l assets
B. FINANCIAL ACCOUNT
Other official investment
Other private investment 3/
Reserves
1/ Revised
2/ Provisional
3/ Includes errors & omissions
1/
Feb
2001
2/
Feb
2002
-175.4
61.6
32.2
-1.6
-1.6
0.0
-1.6
0.0
33.8
150.3
58.9
-32.2
-37.3
-41.2
-63.7
-100.9 -112.3
114.9
215.8
63.6
-12.0
98.1
-22.5
100.8
213.1
48.6
-17.2
84.6
-18.8
-60.2
2.4
-62.6
65.3
3.7
-56.2
0.2
-56.4
78.7
3.4
75.3
41.2
-1.8
-1.8
0.0
-1.8
0.0
43.0
-8.6
23.8
27.8
401.6
-249.1
887.8
-237.1
-414.2
76.9
-491.1
813.6
48.3
765.3
606.0
-12.6
-12.6
1.8
-14.4
0.0
618.6
550.0
603.2
-534.6
1/
Apr-Feb
2000/01
631.4
456.8
-4.8
-4.8
8.3
-13.1
0.0
461.6
355.9
508.8
-403.1
-456.8
-856.9
-1383.2
1394.5
2777.7
526.3
-236.8
1020.7
-257.6
-361.4
67.9
-429.3
761.5
130.1
2/
Apr-Feb
2001/02
-606.0
-1005.4
-1407.0
1298.0
2705.0