Jamaica’s central bank, Bank of Jamaica, is reporting that the country’s Current Account deficit for January to June 2013 improved by US$268 million to US$519 million compared to the corresponding period in 2012. The outturn for the review period represents a continuation of the improvement in this indicator since 2011 the report said. The enhanced outturn for the six months period to June emanated from all sub-accounts, mainly Goods and Primary Income (formerly Goods & Services) which improved by US$141 million and US$50 million respectively.
Change in presentation | The Balance of Payments (BOP) has been modified from what used to be published in the past. The major change in presenting the report is that the Capital Account will no longer be grouped with the Financial Account, but with the Current Account instead. The overall balance from the Current and the Capital account is now referred to as Net Lending or Borrowing. Also, the use of debits and credits for the Financial Account is replaced by Net Acquisition of Financial Assets and the Net Incurrence of Liabilities. There is also introduction of categories of Primary and Secondary Income, which are conceptually consistent with the System of National Accounts (SNA). Primary Income encompasses returns that accrue to institutional units for their contribution to the production process or for the provision of financial assets and renting of natural resources, while Secondary Income represents Current Transfers between residents and non-residents.
Goods producing | For the Goods sub-account, the deficit improved by US$1401 million to US$1.899 billion, versus the corresponding period in 2012. Imports of Goods fell by US$133 million to US$2.779 billion, primarily driven by a US$218 million decrease in Mineral Fuel imports and partially offset by a US$132 million increase in Chemical Imports. Imports of food decreased by US$37.0 million in the period.
Goods Exported increased by US$7.5 million to US$880 million, primarily as a result of a US$66 million increase in Chemical Exports, particularly ethanol.
The balance on the Services sub-account increased by US$50 million to US$453 million for the review period. This resulted primarily from an improvement of US$48 million in the net inflows to the insurance and pension services accounts.
The Primary Income sub-account improved by US$50 million during the review period. This emanated primarily from a US$83 million increase in net investment income flows. Relative to the corresponding period in 2012, the balance on the Secondary Income sub-account improved by US$27 million to US$1 054.1 million. The improvement mainly resulted from a US$18 million increase in the net flows to Financial Corporations, Nonfinancial Corporations, Households, and Non-Profit Institutions Serving Households.
The deficit on the Capital Account improved by US$6.4 million to US$7.7 million for the review period. This outturn together with the balance on the Current Account yielded a net borrowing position of US$527 million, an improvement of US$273.9 million relative to the January-June 2012 period.
The Financial Account recorded a net borrowing position of US$197.4 million, an improvement of US$278.6 million compared to the corresponding period of 2012. The largest contributing subcomponent of the net borrowing balance was Other Investments, which had a net borrowing balance of US$181.2 million. This was primarily due to a decline in the net acquisition of loan assets by US$369 million, coupled with an increase of US$253.8 million in the net incurrence of loan liabilities.
Flows from official and private sources were insufficient to finance the net borrowing balance from the Current and Capital accounts; consequently, the NIR declined by US$100.0 million for the review period.
Related posts | Non-Traditional exports up | NIR up in September
Image courtesy of arztsamui/FreeDigitalPhotos.net
[…] shows that there was a significant improvement in the current account deficit of Jamaica’s Balance of Payments. The outturn in the quarter reflected improvements on all sub-accounts. However, net private and […]