Food prices pressure November’s inflation

December 18, 2017 by

Food category was main contributor to November’s inflation.

Jamaica’s inflation increased by 0.6 percent during November over for October 2017 based on the Consumer Price Index, according to Statistical Institute of Jamaica (STATIN)
According to STATIN, the “movement was mainly the result of a 1.2 percent rise in the index for the heaviest weighted division Food & Non-Alcoholic Beverages. Transportation moved up by 1 percent due to higher petrol prices and airfares, and Education increasing by 0.2 per cent, as a result of an increase in the cost of CSEC examination fees. The impact of the month’s inflation was however tempered by the 0.9 percent fall in the index for the division ‘Housing, Water, Electricity, Gas and Other Fuels, with lower cost for electricity being the main contributing factor.”
Year-to-date inflation is 4.6 percent, while inflation for the past 12 months is up 4.9 percent and the fiscal year-to-date movement was 3.6 per cent.
The relatively large revaluation of the Jamaican dollar against the US dollar since September, will have a moderating impact on inflation going forward.

Filed Under: Economy Tagged With: , , ,

Jamaican exports climb

December 17, 2017 by

Jamaica earned 11.5 percent more from exports from January to September this year over the similar period in 2016 to end with US$992 million, US$102 million above the US$889 million recorded in the 2016 period.
Traditional Domestic Exports which represents 56.2 percent of total exports for the period increased US$36 million or 7.4 percent above the US$485 million recorded for the similar 2016 period to total US$521 million. Mining and Quarrying and Manufacture were responsible for the overall increase in receipts.
Non–Traditional earned US$406 million, a 22.5 percent or US$75 million increase above the US$331 million earned in the 2016 for the nine months period to reach US$406 million.

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Treasury bill rates continue to fall

December 14, 2017 by

Treasury bill rates in Jamaica continues to fall with the two latest issues of 91 and 182 days duration declining with the 91 days instrument falling to an average of 4.176 percent while the 182 days fell to 4.635 percent.
The December decline, is the eight time in 2017, that the rates have fallen. Two amounts of $600 million each were offered to investors and $4 billion chased after them, with the longer dated issue attracting just over 56 percent of the total. The trend suggests that rates on the longer term instrument should fall below 4 percent in early 2018.
The effect of downward movement of rates goes much further than just the money market. Stocks and real estate investments are set to rise in value as a result of the continuing fall in rates and mortgages rates should fall as well.

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Jamaica’s inflation moderates but elevated

November 25, 2017 by

Inflation in Jamaica remains at an elevated level with the Consumer Price Index for October 2017 registering an increase rate of 0.4 percent, down from 0.7 percent in September.
The rate of inflation for the calendar year-to-date is 4 percent and for the past twelve months is running at 4.7 percent. The fiscal year-to-date inflation is 3 percent.
According to data released by Statin, the division of Housing, Water, Electricity, Gas and Other Fuels mainly impacted the movement as it increased by 1.7 percent. This was due chiefly to a 2.2 percent increase in the group, Electricity, Gas and Other Fuels. Additionally, there was a 2.7 percent increase for the group Water,

Increased fuel prices added to inflation.

Supply and Miscellaneous Services Related to the Dwelling, due to higher water and sewage rates. Food and Non-Alcoholic Beverages advanced by 0.3 percent influenced mainly by increased prices for items in the class ‘Vegetables and Starchy Foods. Alcoholic Beverages and Tobacco division recorded the second highest movement, 0.7 percent for the month.
The other divisions that recorded increases in the All Jamaica Clothing and Footwear’ 0.1 percent, ‘Furnishings, Household Equipment and Routine Household Maintenance’ 0.2 percent, ‘Health’ 0.2 percent, ‘Recreation and Culture’ 0.2 percent, Restaurants and Accommodation Services’ 0.1 percent and ‘Miscellaneous Goods and Services’ 0.1 percent. There were no movement for each of the divisions ‘Communication’ and ‘Education’.

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Bank of Jamaica cuts interest rate

November 22, 2017 by

Effective November 23, the rate offered on overnight placements with the Bank of Jamaica (BOJ), will be reduced to 3.25 percent from 3.50 percent, the BOJ announced today.
The adjustment to rate, used by BOJ as the policy rate, reflects the Bank’s assessment that the inflation outlook for FY2017/18 and FY2018/19 will remain within its medium term inflation target of 4 percent to 6 percent.
Amongst the factors leading to the reduction include, “the recent appreciation of the exchange rate that has attenuated the upside risks to the inflation forecast. This outlook is also reinforced by the Government’s commitment to meeting the medium term fiscal targets outlined in the Fiscal Policy Paper.”
The Bank further stated that, “Jamaica’s key macroeconomic indicators continue to reflect generally positive trends and macroeconomic stability is entrenched.

Treasury bill rates on the decline and heading to 4% soon.

Inflation expectations remain firmly in single digits, international reserves are growing, the current account of the balance of payments is projected to remain at sustainable levels, market interest rates continue to trend downwards and the fiscal accounts remain strong. This easing in monetary policy will support continued credit expansion and economic growth.”
The reduction comes against of a relative sharp fall in Treasury bill rates over the past three issues that saw the November offer resulting in the rate on the 91 days instrument falling to 4.26 percent from 4.58 percent previously and the 181 days rate slipping to 4.89 percent from 5.11 percent. Rates on the 182 days instrument, fell 34 basis points to 5.11 percent having dived 53 basis points to 5.45 percent in September. The 91 days Treasury bill rate, fell 40 basis points from 4.98 percent in September to 4.58 percent in the latest auction.

Filed Under: Economy, Feature Stories

T-bill rates drop again

November 16, 2017 by

Rates on Government of Jamaica Treasury bills fell again in November, with the latest offer resulting in the rate on the 91 days instrument falling to 4.26 percent from 4.58 percent previously and the 181 days rate slipping to 4.89 percent from 5.11 percent.
In April the 91 days rate was at 5.71 percent and fell in August to 5.49 percent before dropping sharply in September and October to reach 4.58 percent then.
In April the 182 days rate was at 6.4 percent and fell in August to 5.99 percent before dropping sharply in September and October to help push the current rate under 5 percent. As indicated in the attached chart the rates seems headed for 4 percent for the 182 days instrument and should be there by January or February if current trends continue.
Investors in equities, Money Market Instruments and real estate should pay keen attention to this critical development that will have profound implications for values in the market.

Filed Under: Economy, Feature Stories, Real Estate

38% more taxes by Jamaican businesses

November 7, 2017 by

Increased taxes pushed inflation in April.

Jamaica’ business sector paid 39 percent more taxes to government than projected, for the year to September, with $23 billion collected in corporation taxes resulting from a $6.5 billion increase ahead of forecast.
For the 2017 fiscal year, $16.4 billion was raked in, to September while $52 billion in corporate taxes was paid by the business sector for the full twelve months. Special Consumption taxes on local goods rose 50 percent above forecast with a $5 billion increase while local GCT grew 6 percent or $2.6 billion and travel tax jumped 26 percent or $2 billion above the amounts budgeted earlier in the year. Tax on interest fell $2 billion below forecast to $5 billion and was the only major area of underperformance

Jamaica’s Ministry of Finance newest office building

Revenues for the government of Jamaica continues to outperform forecast with inflows rising $15 billion more than the amount projected, bringing the half year take to $262 billion.
Expenditure underperform projections by $3 billion as interest cost fell $2 billion and the wage bill fell $1 billion.
Government operations ran at a deficit of just $620 million in September, but for the year to date, a surplus of $5 billion. Interestingly, the capital expenditure that have struggled to keep pace with forecast, is down by just $144 million with $18.3 million having been spent. The primary surplus, one of the major target under the IMF agreement, came in at $62 billion or $17 billion better than planned.

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Jamaica’s unemployment chopped to 11.3%

October 31, 2017 by

More Jamaicans were employment in July this year, than those that did a year ago, accordingly 29,200 or 2.5 percent more persons gained employment by July, raising the total persons employed to 1,216,200 up from 1,187,000, recorded in July 2016.
Increased employment, resulted in the unemployment rate for July 2017 declining to 11.3 percent, 1.6 percentage points lower than the rate of 12.9 per cent for July 2016 and is also down from the 12.2 percent achieved in April this year, The decrease was driven by a decline in the unemployment rate for both males and females.
The unemployment rate for males decreased from 9.5 per cent to 8.0 percent while that of the female decreased from 16.9 per cent to 15.2 per cent. The size of the July 2017 labour force increased over the corresponding period in 2016 with the number of persons in the Labour Force being 1,371,200 persons, an increase of 8,000 (0.6 percent) compared with the 1,363,200 recorded in July 2016.
This report presents the key findings of the July 2017 Labour Force Survey which was conducted during the period July – September 2017 with the reference week being June 18 -24, 2017.

Employ,ment increased strongly in the hotel sector.

According to Statin, the occupation group ‘Service Workers and Shop and Market Sales Workers’ showed increase employment of 8,400 persons (3.1 percent), between July 2016 (269,200) and July 2017 (277,600). The group ‘Skilled Agricultural and Fishery Workers’ increased by 8,300 persons from 188,600 in July 2016 to 196,900 in July 2017.
The industry group “Hotels & Restaurants Services” increased by 11,000 (11.4 percent) moving from 96,400 in July 2016 to 107,400 in July 2017. The largest increase in the number of males employed (6,800) was in the industry group “Agriculture, Hunting, Forestry and Fishing” moving from 145,200 to 152,000 representing a 4.7 per cent over the period. For females, the industry group “Hotels & Restaurants Services” accounted for the largest increase of 8,300 (14.9 percent) over the period, moving from 55,700 in July 2016 to 64,000 in July 2017.

Filed Under: Breaking News, Economy

Treasury bill rates heading to 4%

October 19, 2017 by

Treasury bill rates dropped sharply again in the latest Government of Jamaica’s October auction. Rates on the 182 days instrument, fell 34 basis points to 5.11 percent having dived 53 basis points to 5.45 percent in September.
The 91 days Treasury bill rate, fell 40 basis points from 4.98 percent in September to 4.58 percent in the latest auction. In September the rate dropped 51 basis points. The attached chart shows the resistance levels going back to early 2016 just below the 6 percent level that lent support to the rates until June when rates started to drift slowly downwards and was decisively broken in September on its way to 4 percent.

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J$127.77 mid-day rate for US$

October 19, 2017 by

Authorised dealers bought US$9,913,199 at an average rate of J$127.137 up to mid day on Thursday and sold US$5,243,960.45 at an average of J$127.769.

On Wednesday at midday, the selling rate of the US dollar was $127.85, with US$12 million being sold. In Thursday’s session dealers bought C$6,640,074 at J$102.817 each and sold just C$98,944.26 up to the same time.

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