News Release
15 June 2001
JAMAICA: BALANCE OF PAYMENTS DEVELOPMENTS
MARCH 2001
The current account of the balance of payments recorded a deficit of US$33.4M for March 2001, in
contrast to the surplus of US$5.7M recorded for March 2000. With the exception of the income subaccount, all the sub-accounts contributed to the deterioration on the current account.
Merchandise Trade
The deficit on the merchandise trade account widened by US$20.1M to US$147.1M relative to March
2000, reflecting a contraction of US$27.3M in earnings from exports which outweighed a US$7.2M
reduction in payments for imports. Contributing to the decline in the value of exports was a reduction of
US$10.7M in earnings from major traditional exports, attributed mainly to lower receipts of US$10.9M for
sugar exports, as well as a decline of US$6.0M in earnings from non-traditional exports. The decline in
earnings from sugar exports resulted from the postponement of a shipment, traditionally made in March,
to April 2001.
Services
The services account recorded a surplus of US$70.6M for the review month, US$3.4M below the surplus
recorded for March 2000. The reduced surplus mainly reflected the combined effect of an increase of
US$1.2M for transportation charges and higher payments of US$2.8M for other services.
Income
The income account recorded a deficit of US$26.6M for March 2001, relative to the deficit of US$28.1M
recorded for March 2000, primarily reflecting a reduction of US$2.0M in net investment income outflows.
Current Transfers
Net receipts from current transfers declined by US$17.1M to US$69.7M for March 2001, relative to the
comparable month of 2000. Largely accounting for this performance was a contraction of US$23.1M in
inflows to the official sector, reflecting the exceptional inflows as payments for cellular licenses in 2000.
Capital and Financial Accounts
A surplus of US$1.9M was recorded on the capital account for March 2001, US$0.2M below the surplus
recorded in March 2000. The financial account registered a surplus of US$31.5M, representing an
expansion of US$39.1M relative to March 2000. Within the financial account, a surplus of US$220.7M for
private investments was recorded, along with a small deficit of US$9.5M arising from official financial
transactions. The surplus associated with private investments was largely reflective of the divestment of
the Jamaica Public Service Company. In conjunction with the surplus on the capital account, the private
sector surplus was more than sufficient to accommodate the deficits of the official sector and the current
account, thus contributing to a build-up of US$179.7M in the net international reserves of the Bank of
Jamaica for the month.
For the period April 2000 to March 2001 the current account deficit narrowed by US$3.4M to US$369.4M,
relative to the deficit recorded for the period April 1999 to March 2000. The improvement reflected higher
net receipts from services and current transfers, which outweighed expansions in net payments on the
goods and income accounts.
Merchandise Trade
Over the period, the trade deficit deteriorated by US$175.3M to US$1 426.6M relative to the deficit
recorded for FY1999/00. This resulted from an expansion of US$133.2M in payments for imports and a
fall-off in earnings of US$42.1M from exports. For imports, growth was attributed to higher spending of
US$89.9M on fuels and US$41.8M on other raw material imports. The decline in exports emanated
largely from the contraction of US$34.1M in earnings from the export of sugar. In addition, there were
reductions in the price of sugar on the international market.
Services
For the review period a surplus of US$617.9M was recorded on the services account, US$64.7M above
the surplus recorded for the previous fiscal year.
Within this account, respective improvements of
US$77.9M and US$12.2M in net travel receipts and payments for transportation services compensated
for the higher payments for other services. Net travel receipts benefited from a 9.3 per cent upturn in total
visitor arrivals for the period, driven by a 14.4 per cent increase in cruise passenger arrivals.
Income
The income account recorded a deficit of US$383.3M for the review period, representing a deterioration
of US$14.2M relative to the deficit recorded for FY1999/00. The widening of the income account was
attributed to higher net investment outflows of US$38.0M, arising from increased interest payments
associated with Government of Jamaica debt and profit remittances of the direct investment companies.
However, improved interest earnings of US$23.8M on Bank of Jamaica’s foreign assets served as a
countervailing influence.
Current Transfers
Net receipts from current transfers expanded by US$128.2M to US$822.6M for the review period relative
to the period April 1999 to March 2000. Higher net inflows of US$59.0M attributed to the sale of two
cellular licenses accounted for the improvement in net official inflows, while the growth in private sector
transfers reflect a US$99.1M increase in private remittances.
Capital & Financial Accounts
The capital and financial accounts recorded respective surpluses of US$17.9M and US$351.5M for the
review year. Within the financial account net official inflows of US$353.4M, associated mainly with
Government’s foreign borrowing, and net inflows of US$580.9M relating to private investments were more
than sufficient to finance the deficit on the current account, and facilitate a buildup of US$582.8M in the
net international reserves of the Bank of Jamaica. At the end of March 2001, the level of gross reserves
stood at US$1361.9M, representing approximately 24.0 weeks of goods imports and 16.4 weeks of
imports of goods and services.
The following table shows the balance of payments for March 2000 and March 2001, and for the periods
April 1999 to March 2000 and April 2000 to March 2001.
BALANCE OF PAYMENTS SUMMARY
(US$M)
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
BANK OF JAMAICA
1/
Mar
2000
2/
Mar
2001
1/
Apr-Mar
1999/00
2/
Apr-Mar
2000/01
5.7
-53.0
-127.0
146.9
273.9
74.0
-16.6
116.9
-26.3
-28.1
0.8
-28.9
86.8
27.8
59.0
-5.7
2.1
2.1
1.6
0.5
0.0
-7.8
-0.7
105.8
-112.9
-33.4
-76.5
-147.1
119.6
266.7
70.6
-17.8
117.5
-29.1
-26.6
0.3
-26.9
69.7
4.7
65.0
33.4
1.9
1.9
1.5
0.4
0.0
31.5
-9.5
220.7
-179.7
-372.8
-698.1
-1251.3
1550.6
2801.9
553.2
-241.6
1058.3
-263.5
-369.1
67.3
-436.4
694.4
72.8
621.6
372.8
17.7
17.7
9.0
8.7
0.0
355.1
-123.2
600.3
-122.0
-369.4
-808.7
-1426.6
1508.5
2935.1
617.9
-229.4
1136.2
-288.9
-383.3
67.3
-450.6
822.6
131.8
690.8
369.4
17.9
17.9
10.8
7.1
0.0
351.5
353.4
580.9
-582.8