Net remittances rose US$11 million or 7.8 percent in February this year over the similar period in 2013, ending at US$152 million. The growth in net remittance inflows reflected an increase in inflows and a contraction of outflows.
Gross inflows for the month amounted to US$168 million, an increase of US$8 million or 5.1 percent versus the corresponding month of 2013. The rise in total remittance inflows emanated from an increase of US$11 million in inflows through Remittance Companies. The increase in these flows was partly offset by a reduction of US$2.4 million in inflows from Other Remittances.
Net remittances for the two months to February this year was US$290 million, an increase of US$19 million or 7.0 per cent relative to 2013 and emanates from an increase in gross remittance inflows and a contraction in outflows.
For the review period, total remittance inflows amounted to US$327 million, an increase of US$12 million or 3.9 percent.
Better fiscal out turn to February
The Government of Jamaica bettered the fiscal out turn to February by $2.9 billion compared to the budgeted target. The improved performance was the result of revenues for the 11 months declining by $18 billion versus the budgeted amount of $354 billion and expenditure was down as well by $20.9 billion.
For the year to date, revenues are 12 percent ahead of 2013 fiscal year out turn of $336 million. With the March figures to be reported in April, revenues for the full year should increase to end in line with the growth to date and be around $385 billion compared with $344 billion at the end of March last year, assuming no major unexpected inflows.
The results to date, along with the March inflows and with the target of a primary surplus of 7.5 percent for the fiscal year, should result in the fiscal out turn ending in surplus for the first time in many years. At the end of February, the primary surplus was at $78 billion or $34 billion below the target of $111 billion set at the start of the fiscal year. Achieving this target would result in a surplus of $10 billion.
On the surface there will be concerns that revenues for February at $31.3 billion are lower than for 2013 at $31.5 billion in spite of the increased levy of new taxes at the start of the fiscal year. The apparent poor performance in February this year is due to a big intake of $6.4 billion in withholding taxes on interest, while the 2013 figures include just $2 billion. But for this big one-off inflow, the 2013 revenues would be up 7 percent. Tax revenues are up by $27 billion or 10 percent for the eleven month period with the exclusion of withholding tax on interest.
Related posts | Ministry confirms deficit wipe out | Fiscal deficit improvement continues
Early trade gains wiped out
Jamaica closed out 2013 slightly worse off in the trading account than for 2012 as the trade deficit increased by $56 million. This fully reverses the gains enjoyed to November when the deficit was down by US$289 million.
The out turn for 2013 flowed from expenditure on merchandise imports declining by US$113 million to US$6.22 billion compared to 2012 and a fall in export earnings of US$168 million to reach US$1.56 billion. The trade deficit for 2013 amounted to US$4.66 billion compared to the US$4.6 billion recorded for 2012.
Up to November 2013, imports fell by US$392 million and exports fell by US$112 million resulting in the trade deficit falling by 6.2 percent compared to the similar period in 2012.
Overall imports for the 11 months to 2013 was US$5,664 million, down from US$6.06 billion in the 2012 and exports US$1,442 million, resulting in a trade deficit of US$4.22 billion.
Related posts | Jamaica’s trade deficit improves | Trade deficit gains eroded
Remittances up in January
Jamaica continues to benefit from increased remittance flows as the countries that were negatively affected by the down turn in their economies in 2008 continue to mend.
Net remittances for January 2014 were US$138 million, an increase of US$8 million or 6.2 percent relative to the corresponding period of 2013. The growth in net remittance inflows reflect an increase in gross remittance inflows and a contraction in outflows.
Gross remittance inflows amounted to US$158 million, an increase of US$4 million or 2.7 percent compared to January last year. The rise in total remittance inflows emanated from an increase of US$6 million in inflows through Remittance Companies and partly offset by a reduction of US$1.4 million in inflows from Other Remittances.
The January increase follows a record year in which Jamaica topped $2B in remittance inflows.
Related posts | 2013 Remittance inflows top $2B | Remittance inflows continues up
Economy grew in 2013 but barely
Jamaican economy was able to eke out 0.2 per cent growth in 2013 compared to the previous year, preliminary estimate from the Statistical Institute of Jamaica (STATIN) shows. The moderate growth rate, which could be revised later, emanated from growth of 1.8 per cent in the fourth quarter of 2013 compared to the similar quarter of 2012. The fourth quarter growth rate is the strongest for some time but it represents recovery from a period in 2012 when economic activity was negatively affected by Hurricane Sandy.
The economy recorded a growth of 0.5 per cent in the third quarter of 2013 compared to the similar quarter of 2012. Earlier in the year, Statin reported that the Jamaican economy declined by 0.1 per cent in the second quarter and declined by 1.3 per cent in the first quarter of 2013. The country has not enjoyed much growth from 1999 has is shown by the table below.
Growth in the 2013 final quarter resulted from increased output levels in both the Goods Producing industries and Services industries, Statin said.
Statin stated that “the performance in the Goods Producing industries reflects increased activities in Agriculture, Forestry & Fishing (13.1 per cent), benefited from favourable weather conditions, Mining & Quarrying (12.1 per cent) resulting from increased capacity utilization at the bauxite and alumina plants and Construction (2.6 percent) due to an increase in residential housing projects and continued expansion in hotels. Manufacture industry declined by 0.8 per cent”.
All industries within the Services industries recorded increased levels of output with the exception of the Producers of Government Services which declined by 0.2 per cent and the Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment, which remained relatively unchanged for the period. Higher output levels were recorded for: Hotels & Restaurants (5.5 per cent), Transport, Storage & Communication and Other Services (1.1 per cent), Electricity & Water Supply (1.0 per cent), Finance & Insurance Services (0.4 per cent), Real Estate, Renting & Business Activities (0.3 per cent).
Related posts | Economy declined 0.1% in Q2 | Statin confirms growth of 0.5%
Inflation plummets
Inflation rate for February plummeted to just 0.1 percent or annualised at only 1.2 percent. The movement in the index for February 2014 resulted in a calendar year-to-date inflation of 0.6 percent.
The latest monthly out-turn is the lowest for since January and February 2011 and except for July 2012 with a negative inflation rate, no other month has come close to it.
The main contributors to the movement were the 0.2 percent advance in the index for the division Food and Non-Alcoholic Beverages, the heaviest weighted division, and increases of 0.7 percent each for the divisions Clothing and Footwear and Miscellaneous Goods and Services.
The impact of these increases however was moderated by a 1.2 percent decline in the index for the division Housing, Water, Electricity, Gas and Other Fuels as a result of the decline in the cost of electricity, water, and sewage rates. ‘Alcoholic Beverages and Tobacco’ rose by 0.2 percent, ‘Furnishings, Household Equipment and Routine Household Maintenance 0.6 percent, ‘Health 0.2 percent, ‘Transport’ 0.1 percent.
Negligible movement was recorded for ‘Recreation and Culture’ 0.4 percent, ‘Restaurants and Accommodation Services’ 0.1 percent, ‘Miscellaneous Goods and Services’ 0.7 percent, ‘Education’ and ‘Communication’ for the period under review. There was zero inflation in the rural areas during the month.
Related posts | Inflation moderates slightly | 2013 inflation 9.7%, worse than 2012
BOJ suggests FX stability close
Bank of Jamaica, in an unusual weekend press release, indicated that positive trends in the economy and increased flows of foreign exchange in March over the first two months of the year will provide an increasingly solid base for improved stability in the foreign exchange market.
“Since the beginning of March 2014, the exchange rate has depreciated by J$0.93 (0.85%) against the US dollar. This movement over the two-week period compares to a J$0.49 (0.45%) depreciation over the previous two weeks. The faster pace of depreciation has occurred despite increased supply in the foreign exchange market, where volumes from earners for the month to date, are higher than for January and February 2014.” the central bank stated in a release this evening.
“Jamaica’s main economic indicators continue to improve with economic growth resumed in the September quarter and is expected to strengthen over the subsequent six months in the range of 1.0 per cent to 2.0 per cent. Preliminary estimates of the balance of payments indicate that the current account deficit was reduced sharply over the period April 2013 to September 2013, by approximately US$350.0 million. The current level of net international reserves (NIR) is US$1,121.4 million, increasing by US$52.0 million since the end of February 2014. Bank of Jamaica now expects to comfortably meet the NIR target under the International Monetary Fund agreement for the March 2014 quarter. Finally, headline inflation was lower than projected at 0.5 per cent for the month of January and the fiscal year to March 2014 is now likely to fall close to or below the bottom of the 8.5 per cent to 10.5 per cent target range. The BOJ stated that against the background of recent movements in the exchange rate, they wish to assure the public that it stands ready to provide support to prevent disorderly conditions from emerging in the foreign exchange market.” the release concluded.
Jamaica’s trade deficit improves
Jamaica’s trade deficit improvement experienced a recovery in the year to November 2013 as both imports, which fell by US$392 million and exports, down by US$112 million, resulted in the deficit falling by 6.2 percent or US$289 million when compared to the similar period in 2012.
Overall, imports for the 11 month period in 2013 was US$5,664 million, down from US$6,056 million for the same period in 2012 and exports of US$1,442 million, resulted in a trade deficit of US$4,221 million as reported by the Statistical Institute of Jamaica (STATIN).
Imports | Freezone activity accounted for US$295 million in imports, compared to US$352 million in the corresponding 2012 period. The category of Mineral Fuels, which accounts for 35 percent of the country’s import bill, fell by US$229 million to US$1,984 million compared to the same period of 2012. Machinery and Transport Equipment fell by US$20 million to US$831 million. Chemicals imports was valued at US$741 million, a decrease of US$80 million. Manufactured Goods fell by US$41 million or 7.1 percent to US$544 million. Spending on Food, however, rose by US$12 million to US$888 million as a result of the sharp rise in the price of basic commodities.
Traditional Exports | For the period of January to November 2013, the country earned US$724 million from traditional domestic exports which fell by 2.9 percent or US$22 million versus 2012 period largely due to the decline in Manufacturing exports. Non-traditional domestic exports fell by US$104 million or 13.9 percent to US$643 million compared with the first eleven months of 2012.
Trade with USA improves | The value of imports from the United States of America, a major trading partner, fell by US$145 million or 7 percent to US$1,940 million to November 2013 compared to the similar period in 2012. Merchandise exports sold to the USA fell by US$19 million to US$711 million resulting in the trade deficit of US$1,229 million, down from US$1,355 million for the similar 2012 period, a decline of US$126.5 million.
Trade with CARICOM worsens | Goods imported by Jamaica from the CARICOM region from January to November 2013 grew by US$4.5 million to US$822 million, due largely to increased expenditure on “Food” which increased by US$13 million to US$151 million. Total exports fell by 20 percent or US$15 million to US$63 million.
Related posts | USA trade deficit worsens, Caricom improves | Big drop in trade deficit
GOJ deficit up in January
Government spent more in January than originally budgeted and collected less than projected to wipe out the projected $761 surplus originally budgeted, ending up with a deficit for the month of $3.274 billion. At the end of January, the year-to-date deficit is at $22.9 billion, just $2.65 billion less than the amount budgeted.
The revenue for the month was short of the $31.37 billion budgeted by $820 million. Capital expenditure exceeds the budget of $3.53 billion in the month by $1.45 billion coming in at $4.98 billion. However, capital expenditure is still running $7.6 billion below budget for the year to January.
The budget projected a shortfall of $2 billion in February and $19.5 billion surplus in March. The latter is in keeping with historical pattern with the last month of the fiscal years realizing a surpluses. If the budget is achieved for the remaining two months of the fiscal year, the fiscal deficit will come close to being wiped out and would have been reduced from $54.6 billion.
For the 10 months to January, tax revenues fell short by $13.2 billion and non-tax was below budget by $3.6 billion and recurrent expenditure was down $14.4 billion from budget. Interest cost was lower by $3.9 billion and other recurrence expenditure by $6.8 billion.