News Release
24 December 2001
JAMAICA: BALANCE OF PAYMENTS DEVELOPMENTS
September 2001 & April to September 2001
The current account of the balance of payments recorded a deficit of US$60.1MN for September
2001relative to the deficit of US$59.9MN recorded for September 2000. This out-turn was attributed to
higher net payments on the services and income accounts, which outweighed improvements on the
merchandise trade and current transfers accounts.
Merchandise Trade
The deficit on the merchandise trade account narrowed by US$37.8MN to US$104.8MN for September
2001, relative to September 2000. This performance reflected the combined effect of a US$20.2MN
increase in earnings from exports and a US$17.6MN contraction in payments for imports. An expansion
of US$25.7MN in earnings from the major traditional exports was, attributed mainly to increased earnings
from alumina and bauxite exports was largely responsible for the growth in the value of exports. The
decline in payments for imports emanated from respective contractions of US$8.0MN and US$7.1MN in
spending on consumer goods and raw material imports.
Services
The surplus on the services account for the review month declined by US$10.9MN relative to September
2000, influenced mainly by a falloff in net travel receipts. There was a 21.9 per cent decline in total visitor
arrivals for the month, while net earnings declined by 12.5 per cent.
Income
Relative to September 2000, the deficit on the income account widened by US$37.5MN to US$38.8MN in
the review month. The growth in net income payments was accounted for by higher net investment
income outflows of US$36.9MN, largely related to the imputed profit remittances of the direct investment
companies, as well as, an increase in official debt payments.
Current Transfers
Net receipts from current transfers grew by US$9.4MN to US$72.4MN for September 2001, relative to the
comparable month of 2000. This out-turn was influenced by increased net inflows of US$9.3MN to the
private sector.
Capital and Financial Accounts
A deficit of US$1.2MN was recorded on the capital account for September 2001, relative to the surplus of
US$0.2MN reported for September 2000. In contrast, the financial account registered a surplus of
US$61.3MN, US$2.6MN above what obtained for September 2000. Within the financial account, net
private investments amounting to US$18.9MN was insufficient to finance net official outflows of
US$19.8MN, as well as, the deficit on the current account. Consequently there was a draw-down of
US$62.2MN in the net international reserves of the Bank of Jamaica for the month.
For the period April to September 2001, the current account deficit widened by US$81.1MN to
US$218.8MN, relative to the corresponding period in 2000. With the exception of the current transfers, all
the sub-accounts contributed to the widening of the deficit on the current account.
Merchandise Trade
The trade deficit for the review period deteriorated by US$46.8MN to US$710.8MN relative to the deficit
recorded for April to September 2000. This performance reflected a US$55.1MN increase in payments for
imports, which outweighed the US$8.3MN improvement in earnings from exports. Accounting for the
growth in imports were, higher payments of US$40.3MN, US$22.9MN and US$5.9MN for capital goods,
free zone purchases and consumer goods, respectively. The increase in capital goods imports was
attributed to higher expenditure on communications equipment for the growing telecommunications
sector. The increase in the value of exports stemmed mainly from respective expansions of US$30.5MN
and US$27.6MN for bauxite and alumina exports. Garment exports declined by US$28.2MN over the
review period.
Services
The services account recorded a surplus of US$296.8MN for the period April to September 2001, a
decline of US$4.5MN relative to the comparable period of 2000. Accounting for this decline was a
deterioration of US$17.1MN in gross travel receipts, which was partly countered by a US$8.1MN
contraction in expenditure by Jamaicans traveling abroad.
Income
The income account recorded a deficit of US$235.1MN for the review period, a deterioration of
US$64.1MN, relative to the deficit recorded for April to September 2000. This performance reflected
higher interest payments on Government of Jamaica foreign debt, as well as, increased imputed profit
remittances by the direct investment companies.
Current Transfers
For April to September 2001, net receipts from current transfers amounted to US$430.3MN, US$34.3MN
above what was recorded for April to September 2000. An increase of US$81.5MN in net private sector
transfers compensated for the contraction of US$47.2MN
in official inflows.
The decline in official
transfers was related to the non-repetition of flows associated with the sale of cellular licenses in the
corresponding period in 2000.
Capital & Financial Accounts
The capital account recorded a deficit of US$7.9MN for the period April to September 2001,
relative to the deficit of US$2.0MN recorded for the comparable period in 2000. In contrast, the financial
account registered a surplus of US$226.7MN, an improvement of US$87.0MN relative to the surplus
recorded for the period April to September 2000. Within the financial account, net official inflows of
US$269.5MN relating to Government foreign borrowing, and net inflows of US$207.4MN associated with
private investments, were more than sufficient to finance the deficit on the current and capital accounts.
As a consequence, there was a build-up of US$250.4MN in the net international reserves of the Bank of
Jamaica. At the end of September 2001, the Bank’s gross reserves was US$1605.9 million, representing
approximately 27.7 weeks of goods imports or 18.8 weeks of imports of goods and services.
The following table shows the balance of payments for September 2000, September 2001 and for the
fiscal periods April to September 2000/01 and April to September 2001/02.
BALANCE OF PAYMENTS SUMMARY (US$M)
1/
2/
September September
2000
2001
1. CURRENT ACCOUNT
A. GOODS and SERVICES
a. GOODS BALANCE
Exports (f.o.b.)
Imports (f.o.b.)
1/
Apr-Sep
2000/01
2/
Apr-Sep
2001/02
-58.9
-120.6
-142.6
104.8
247.4
-60.1
-93.7
-104.8
125.0
229.8
-137.7
-362.7
-664.0
770.2
1434.2
-218.8
-414.0
-710.8
778.5
1489.3
b. SERVICES BALANCE
Transportation
Travel
Other Services
22.0
-24.9
64.7
-17.8
11.1
-24.0
49.2
-14.1
301.3
-124.0
566.6
-141.3
296.8
-129.8
557.6
-131.0
B. INCOME
Compensation of employees
Investment Income
-1.3
9.4
-10.7
-38.8
8.8
-47.6
-171.0
30.1
-201.1
-235.1
39.9
-275.0
C. CURRENT TRANSFERS
Official
Private
63.0
2.8
60.2
72.4
2.9
69.5
396.0
78.4
317.6
430.3
31.2
399.1
2. CAPITAL & FINANCIAL ACCOUNT
A. CAPITAL ACCOUNT
a. Capital Transfers
Official
58.9
0.2
0.2
1.4
60.1
-1.2
-1.2
0.0
137.7
-2.0
-2.0
5.3
218.8
-7.9
-7.9
0.3
-1.2
-1.2
-7.3
-8.2
0.0
0.0
0.0
0.0
58.7
-3.7
62.5
-0.1
0.0
61.3
-19.8
18.9
62.2
0.0
139.7
126.0
245.7
-232.0
0.0
226.7
269.7
207.4
-250.4
0.0
Private
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