News Release

30 March 2001

 

JAMAICA: BALANCE OF PAYMENTS DEVELOPMENTS

DECEMBER 2000

 

 

For December 2000, the current account of the balance of payments recorded a surplus of US$27.3MN, in contrast to the deficit of US$71.4MN recorded for December 1999. This improvement reflected respective increases of US$52.3MN, US$24.7MN, US$5.3MN and US$16.4MN in the balances relating to merchandise trade, services, income and current transfers.

Merchandise Trade

The improvement in the merchandise trade deficit reflected the combined effect of a US$8.6MN upturn in earnings from exports, and a US$43.7MN contraction in payments for imports.

Services

Accounting for the improvement in the services account was the combined effect of an increase of US$19.4MN in net travel receipts and a US$7.9MN reduction in net payments for transportation services. Partly offsetting this improvement was higher net payments for other services of US$2.6MN. The travel sector benefited from an increase of 8.2 percent in total visitor arrivals.

Income

For the review month, the income account recorded a deficit of US$39.0MN relative to the deficit of US$44.3MN registered for December 1999. This improvement was influenced primarily by reduced investment income payments associated mainly with lower imputed profits of the direct investment companies.

Current Transfers

Net receipts from current transfers benefited from continued improvement in private inflows, attributable to remittance receipts.

Capital and Financial Accounts

Within the financial account, surpluses of US$71.2MN and US$37MN were recorded on the official and private investments accounts, respectively.  These surpluses, in conjunction with the surpluses on the capital and current accounts, resulted in a build-up of US$137.8MN in the net international reserves of the Bank of Jamaica for the month.

 

For the fiscal period April to December 2000, the deficit on the current account deficit narrowed by US$48.6MN to US$234.0MN, relative to the deficit recorded in the comparable period of 1999. Improvements of US$89.7MN and US$117.7MN in the surpluses on the services and transfers accounts outweighed the deterioration of US$145.8MN and US$13.0MN on the merchandise trade and income accounts, respectively.

Merchandise Trade

Lower export earnings of US$3.6MN and an expansion of US$142.2MN in payments for imports accounted for the widening in the merchandise trade deficit for the review period. Largely accounting for the growth in spending on imports was an expansion of US$128.3MN in the value of fuel imports.  This expansion reflected the impact of significant increases in oil prices on the international market.

Services

A growth of US$102.4MN in net travel receipts and a decline of US$8.7MN in net payments for transportation services were responsible for the improved performance of the services account for the review period. However, an increase of US$21.4MN in payments for other services, partly relating to financial charges associated with a Government of Jamaica Eurobond, served as a countervailing influence on the services account. Net travel receipts benefited from an 11.8 percent increase in total visitor arrivals for the period, which stemmed from a 21.1 percent increase in cruise passenger arrivals.

Income

The deterioration on the income account largely resulted from higher imputed profit remittances of the direct investment companies.

Current Transfers

A boost of US$142.4MN in gross inflows to both the official and private sectors contributed to the positive performance in the current transfers account. For the official sector, higher receipts of US$73.8MN stemmed from the sale of cellular licenses, while for the private sector, the growth of US$68.6MN reflected growth in remittance receipts.

Capital & Financial Accounts

The capital account recorded a surplus of US$14.5MN for the period April to December 2000, an improvement of US$5.9MN relative to the comparable period in 1999. However, the surplus of US$219.5MN on the financial account represented a contraction of US$54.5MN relative to the similar period of 1999. Within the financial account, surpluses of US$221.1MN and US$264.4 on the official and private investment accounts were recorded. The net inflow relating to official investments was related mainly to a Eurobond issue. The surpluses on the capital account and the official and private investment sub-accounts were sufficient to finance the deficit on the current account and facilitate a buildup of US$266.0MN in the net international reserves of the Bank of Jamaica.

 

 

 

The following table shows the balance of payments for December 1999 and December 2000 and for the periods April to December 1999 and April to December 2000.

 

 

BALANCE OF PAYMENTS SUMMARY

 

 

 

 

(US$MN)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1/

 

 

Dec

Dec

Apr-Dec

Apr-Dec

 

 

1999

2000

1999/00

2000/2001

 

 

 

 

 

 

1. CURRENT ACCOUNT

 

-71.4

27.3

-282.6

-234.0

A. GOODS and SERVICES

 

-80.4

-3.4

-498.4

-554.5

a. GOODS BALANCE

 

-139.5

-87.2

-884.9

-1030.7

        Exports (f.o.b.)

 

122.6

131.2

1153.8

1150.2

        Imports (f.o.b.)

 

262.1

218.4

2038.7

2180.9

b. SERVICES BALANCE

 

59.1

83.8

386.5

476.2

        Transportation

 

-20.7

-12.8

-186.3

-177.6

        Travel

 

105.6

125.0

765.4

867.8

        Other Services

 

-25.8

-28.4

-192.6

-214.0

B. INCOME

 

-44.3

-39.0

-275.5

-288.5

        Compensation of employees

 

8.6

8.3

63.5

61.8

        Investment Income

 

-52.9

-47.3

-339.0

-350.3

C. CURRENT TRANSFERS

 

53.3

69.7

491.3

609.0

        Official

 

3.8

4.6

38.3

111.5

        Private

 

49.5

65.1

453.0

497.5

2. CAPITAL & FINANCIAL ACCOUNT

 

71.4

-27.3

282.6

234.0

A. CAPITAL ACCOUNT

 

1.5

2.3

8.6

14.5

a. Capital Transfers

 

1.5

2.3

8.6

14.5

        Official

 

0.1

1.4

1.7

8.3

        Private

 

1.4

0.9

6.9

6.2

b. Acq./disposal of non-prod. non-fin'l assets

0.0

0.0

0.0

0.0

B. FINANCIAL ACCOUNT

 

69.9

-29.6

274.0

219.5

        Other official investment

 

-31.5

71.2

-279.9

221.1

        Other private investment  2/

 

44.8

37.0

422.6

264.4

        Reserves

 

56.6

-137.8

131.3

-266.0

 

 

 

 

 

 

1/  Provisional

 

 

 

 

 

2/  Includes errors & omissions

 

 

 

 

 

 

BANK OF JAMAICA