News Release
30 October 2001
JAMAICA: BALANCE OF PAYMENTS DEVELOPMENTS
July 2001 & April to July 2001
The current account of the balance of payments recorded a surplus of US$3.1MN for July 2001, in
contrast to the deficit of US$9.9MN recorded for July 2000.
This out-turn was influenced by
improvements on the income and current transfers sub-accounts, as the trade and services balances
deteriorated relative to July 2000.
Merchandise Trade
The trade deficit widened by US$19.7MN to US$131.2MN for July 2001, relative to July 2000. This
deterioration reflected the combined effect of a US$13.6MN expansion in payments for imports, and a
decline of US$6.1MN in earnings from exports. The increase in the value of imports mainly reflected an
expansion of US$15.1MN in capital goods imports, which was attributable to higher spending on the
category “other machinery”, in particular telephone and telegraphic equipment, and computers.
In
addition, consumer goods imports increased by US$9.1MN. The decline in the value of exports was
largely due reductions in earnings of US$5.4MN from non-traditional exports, particularly garments, as
well as a contraction of US$3.7MN in alumina exports.
Services
The surplus on the services account for the review month declined by US$2.7MN relative to July 2000,
reflecting a contraction in net travel receipts and higher payments for transportation services, associated
with the increased flow of imports.
Income
The deficit on the income account narrowed by US$9.5MN in the review month, relative to July 2000. A
decline of US$7.7MN in net investment income payments, arising mainly from lower imputed profit
remittances of the direct investment companies, was largely responsible for the improvement.
Current Transfers
For July 2001, net receipts from current transfers grew by US$25.9MN to US$80.0MN relative to the
comparable month of 2000. The improvement was attributed to an increase of US$25.6MN in net private
transfers.
Capital and Financial Accounts
Respective deficits of US$1.1MN and US$2.0MN were recorded on the capital and financial accounts for
July 2001.
Within the financial account, net outflows of US$24.1MN were recorded for official
transactions, while net private investments inflows amounted to US$7.7MN. The surpluses on the net
private investment account and the current account were insufficient to finance the deficit on the capital
and official investment accounts. Consequently, there was a draw down of US$14.4MN in the net
international reserves of the Bank of Jamaica for the month.
For the period April to July 2001, the current account deficit widened by US$27.1MN to US$84.5MN,
relative to the deficit recorded for the corresponding period in 2000. This reflected a widening of the deficit
on the goods account, which outweighed improvements on the services, income and current transfers
accounts.
Merchandise Trade
The deficit on the trade account amounted to US$473.4MN over the review period, a deterioration of
US$48.7MN relative to the deficit recorded for April to July 2000. This resulted from the combined effect
of an increase of US$36.5MN in payments for imports and a contraction of US$11.9MN in earnings from
exports. Higher payments of US$23.2MN, US$21.7MN and US$27.4MN on consumer goods, capital
goods and free zone purchases, respectively, were largely responsible for the growth in imports. The
increase in both consumer and capital goods mainly reflected growth in the imports for the
telecommunication sector. In the main, lower earnings of US$30.0MN from non-traditional exports
contributed to the decline in exports.
Services
The services account recorded a surplus of US$238.9MN for the review period, US$8.8MN above the
surplus recorded for the period April to July 2000. This performance was due largely to an improvement
of US$13.9MN in net travel receipts, reflective of a 1.7 per cent increase in the arrival of foreign nationals
stopover visitors.
Income
There was a marginal improvement of US$0.8MN on the income account in the review period relative to
April to July 2000, due to increased inflows of US$7.3MN in net compensation of employees. Higher net
investment outflows arising from increased interest payments by the Government of Jamaica, and the
imputed profits of the direct investment companies served to offset some of this increase.
Current Transfers
For the review period, net receipts from current transfers grew by US$11.7MN to US$290.8MN, relative to
April to July 2000. An increase of US$58.8MN in net private sector transfers compensated for the nonrepetition of official receipts associated with the sale of cellular licenses over the same period in 2000.
Capital & Financial Accounts
The capital account recorded a deficit of US$5.7MN for the period April to July 2001, a deterioration of
US$4.6MN relative to the comparable period in 2000, while the financial account registered a surplus of
US$90.2MN, US$31.7MN above the surplus recorded for the period April to July 2000. Within the
financial account, net official inflows of US$308.9MN relating to Government foreign borrowing, and
private investment inflows of US$21.1MN, were more than sufficient to finance the deficit on the current
account and facilitate a build-up of US$239.8MN in the net international reserves of the Bank of Jamaica.
At the end of July 2001, the Bank’s gross reserves was US$1598.1 million, representing approximately
27.0 weeks of goods imports or 18.5 weeks of imports of goods and services.
The following table shows the balance of payments for July 2000, July 2001 and for the periods April to
July 2000 and April to July 2001.
BALANCE OF PAYMENTS SUMMARY (US$MN)
1/
July
2000
2/
July
2001
1/
Apr-July
2000/01
2/
Apr-July
2001/02
-9.9
-30.2
-111.5
125.8
237.3
3.1
-52.6
-131.2
119.7
250.9
-57.4
-194.9
-425.0
530.9
955.9
-84.5
-234.5
-473.4
519.0
992.4
b. SERVICES BALANCE
Transportation
Travel
Other Services
81.3
-19.3
128.2
-27.6
78.6
-21.9
126.2
-25.7
230.1
-79.6
401.1
-91.4
238.9
-81.3
414.9
-94.7
B. INCOME
Compensation of employees
Investment Income
-33.8
6.2
-40.0
-24.3
8.5
-32.8
-141.6
12.6
-154.2
-140.8
19.9
-160.7
C. CURRENT TRANSFERS
Official
Private
54.1
4.2
49.9
80.0
4.5
75.5
279.1
71.8
207.3
290.8
24.7
266.1
2. CAPITAL & FINANCIAL
ACCOUNT
A. CAPITAL ACCOUNT
a. Capital Transfers
Official
Private
9.9
-0.7
-0.7
0.6
-1.3
-3.1
-1.1
-1.1
0.0
-1.1
57.4
-1.1
-1.1
3.8
-4.9
84.5
-5.7
-5.7
0.2
-5.9
0.0
0.0
0.0
0.0
10.6
-25.8
68.6
-32.2
0.0
-2.0
-24.1
7.7
14.4
0.0
58.5
-78.5
222.2
-85.2
0.0
90.2
308.9
21.1
-239.8
0.0
1. CURRENT ACCOUNT
A. GOODS and SERVICES
a. GOODS BALANCE
Exports (f.o.b.)
Imports (f.o.b.)
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