Economy — Page 51

USA trade deficit worsens, Caricom improves

February 17, 2014 by IC Insider.com

Trade deficit deteriorates with USA | Jamaica’s trade deficit with the United States of America (USA) to October last year resulted in savings of US$136 million, which flowed from a rise in exports and a reduction in imports. This is a decline from the position in August when there was a $212 million improvement.

At the end of the 2013 period, the trade deficit with the USA stood at US$1.1 billion, down from US$1.24 billion in the comparable 2012 period. The value of imports the during the January to October 2013 fell by US$103 million or 5.6 percent to US$1.753 billion compared to the same period in 2012 and exports rose by US$32 million or 5.2 percent to US$651 million, representing 49.6 percent of total earnings from exports.

Expenditure on goods imported from the USA accounted for approximately 34.0 percent of Jamaica’s total expenditure on imports.

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Caricom trade improves | The trade deficit with the Caricom region for the year to October 2013 showed a US$65 million or 9 percent improvement over the similar period in 2012 with the deficit amounting to US$654 million, down from US$719 million in the comparable period of 2012.

Imports from CARICOM during January to October 2013, fell by 10.2 percent or US$80.3 million to US$709.6 million as a result of a decrease in expenditure on “Mineral Fuels, etcetera”. Up to August, imports fell by US$80 million as well and the reduction seems to have stabilised at a lower level than before. Expenditure on this commodity group accounted for 66.6 percent of goods imported from CARICOM during the 2013 period and imports fell by US$87 million or 15.6 percent to US$472 million in the current period. By comparison, in the January to October 2012 period, imports of “Mineral Fuels, etcetera” represented 70.8 percent of Jamaica’s total import bill with CARICOM.

Importation of “Food” rose by 9.3 percent or US$11.9 million to US$140.2 million. Spending on “Beverages & Tobacco” also rose marginally to US$33.4 million.

Total exports declined by 21.2 per cent or US$15.0 million to US$55.8 million during the January to October 2013 period. Domestic exports moved down from US$62 million to US$48 million because of decreases in “Chemicals”, “Misc. Manufactured Articles” and “Mineral Fuels, etcetera”. Earnings from these three commodity groups fell in the 2013 review period to US$5.1 million, US$3.4 million, and US$0.4 million respectively.

Related posts | Non-Traditional exports up | Caricom imports drop

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Filed Under: Economy Tagged With: Deficit, Economy, GOJ, Trade

Remittance inflows continues up

February 12, 2014 by IC Insider.com

Remittance inflows for November last year were US$168 million, an increase of US$10 million or 6.3 per cent compared to the corresponding month in 2012. The rise in total remittance inflows reflected an increase of US$8.0 million in inflows through Remittance Companies and an increase of US$2 million in inflows by other sources.

Net remittances flows were US$149.4 million for November 2013, an increase of US$13.5 million or 9.9 per cent versus the corresponding month in of 2012. The growth in net remittance inflows reflected an increase in gross remittance inflows and a contraction in outflows.

Total remittance inflows from January to November 2013 were US$1.87 billion, an increase of US$24 million over the flows for the similar period in 2012.

The increase in total remittance inflows reflect an increase of US$15 million in inflows through Other Remittances and an increase of US$9 million in inflows through Remittances Companies.

Net remittances for January to November 2013 were US$1.65 billion representing an increase of US$47 million or 2.9 per cent relative to 2012. The outturn for the review period reflected an increase in gross remittance inflows and a contraction in outflows.

Related posts | October remittances up

Filed Under: Economy Tagged With: BOJ, Economy, FX Market, Remittances

Business conditions mending?

February 12, 2014 by IC Insider.com

The perceptions about present and future business conditions improved significantly in the most recent survey relative to the previous survey done in November last year. The survey was commission by Bank of Jamaica and undertaken by Statin.

In the most recent survey, the index hit 97.5 for current business conditions, up strongly from 66.6 in October and 87.4 in September and is at the highest level since June 2012 that was recorded at 115.1. However, the perception of future business conditions remained below the levels recorded in FY2011/12.

The business sector is very bullish on the future, as the future expectations reading is now up to 125 compared to 98.6 in October and is at the highest since November 2012 at 130.6.

About the survey | The Statistical Institute of Jamaica (STATIN) undertakes surveys of businesses on behalf of the Bank of Jamaica to ascertain the expectations of economic agents about variables which are likely to have an impact on inflation in the near-term. In this regard, the survey captures the perception of Chief Executive Officers, Managing Directors and Financial Controllers about the future movement of prices, current and future business conditions and the expected rate of increase in wages/salaries.

Related posts | Business confidence drops 24%

Filed Under: Economy Tagged With: BOJ, Economy, Statin

Trade deficit gains eroded

February 5, 2014 by IC Insider.com

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Jamaica’s trade deficit which saw an improvement for the year to August of US$300 million, suffered a setback by October when the deficit fell by US$210 million, an erosion of $100 million.

The deterioration came as total expenditure on imports during January to October 2013 fell by US$309 million or 5.6 percent, to US$5.16 billion compared to the same period in 2012, while earnings from exports fell by US$99 million or 7 percent to US$1.31 billion resulting in a decline in the trade deficit to US$3.84 billion, down 5.2 percent from the US$4.05 billion recorded in the January to October 2012 period.

“Mineral Fuels etcetera”, “Food”, “Machinery and Transport Equipment”, “Chemicals”, and “Manufactured Goods” were the top five commodity groups imported. Increased spending was recorded for “Food” which rose by US$11.3 million or 1.4 percent to US$807 million, up from the US$795 million accounting for 15.6 percent of imports.

The country imported “Raw Materials/Intermediate Goods” amounting to US$3.22 billion during the 2013 period, compared to US$3.438 billion in the comparable period in 2012, a 6.4 percent decrease amounting to US$218 million. Imports of “Other Fuels and Lubricants” fell by 15.2 percent to US$1.06 billion compared to the US$1.25 billion expenditure for the 2012 period.

Traditional Domestic Exports for the first ten months of 2013 earned US$653 million. Receipts fell by 6.1 percent or US42.6 million largely due to the decline in “Manufacture”. The “Mining and Quarrying” and “Agriculture exports” increase was insufficient to offset the overall decline in total exports during the 2013 period.

Non-Traditional Domestic Exports fell by US$71 million or 10.7 percent to US$589 million during the ten-months of 2013. Earnings represented 47.4 percent of total domestic exports, compared to 48.7 percent in the 2012 period.

Total exports of Non-Traditional declined by 21.2 percent or US$15.0 million to US$56 million during the January to October 2013 period. Domestic exports moved from US$62 million to US$48 million because of decreases in “Chemicals”, “Misc. Manufactured Articles” and “Mineral Fuels, etcetera”. Earnings from these three commodity groups fell in the 2013 review period to US$5 million, US$3.4 million, and US$0.4 million respectively. “

Filed Under: Economy Tagged With: Deficit, Economy, Trade

Employed up, so too unemployed

February 4, 2014 by IC Insider.com

The unemployment rate for September 2013 was 14.9 percent compared to 14.0 percent in September 2012 but males unemployment rate was well below the national average at 10.6 percent but that for females at 20 percent was way over the average.

Employed up | The Employed Labour Force for September 2013 was 1,110,700 or 6,700 more than the 1,104,000 recorded in September 2012. For males, it increased by 6,400 (1.0 percent) to 637,800 and for females there was no noticeable movement.

The Unemployment rates among youths aged 14-24 years was 37.7 percent in 2013, an increase of 3 percentage points compared with 34.7 percent in September 2012. At the same time, male unemployment rate for youths was 31.4 percent compared to 46.2 percent for females.

The main findings of the 2013 Labour Force Survey, conducted by the Statistical Institute of Jamaica (STATIN) and covers the reference week of September 22-28.

Clerks got jobs | While the unemployment rate moved up in September, it was not all doom and gloom as the Occupation group ‘Clerks’ in the Employed Labour Force increased by 14.3 percent or 12,800 persons, from 89,400 in September 2012 to 102,200 in September 2013. The group ‘Service Workers and Shop and Market Sales Workers’ had the largest decline for the same period, moving from 225,900 to 215,300 in September2013 resulting in a decline of 10,600 (4.7 percent) persons.

In September 2013 the largest percentage increase in employment occurred in the industry group ‘Health & Social Work’ where the number of persons employed increased by 32.1 percent or 8,400 persons moving from 26,200 in September 2012 to 34,600. During the same period, the industry group ‘Other Community, Social and Personal Service Activities’ declined by 3,900 (6.1 percent).

Increased unemployed | The number of unemployed persons increased by 14,100 (7.8 percent) moving from 179,900 in September 2012 to 194,000 in September2013. Over the same period the number of unemployed males increased by 1,400 (1.9 percent) and the number of females by 12,700 (12.0 percent).

The number of persons in the Labour Force was 1,304,800, which was 20,900 (1.6 percent) higher than the 1,283,900 recorded in September 2012. The male labour force increased by 7,900 (1.1 percent) from 705,700 in September 2012 to 713,600 in September 2013, and the female labour force increased by 13,000 (2.2 percent) moving from 578,200 to 591,200 during the same period.

Outside labour force | Persons classified as Outside the Labour Force in September 2013 was 774,300. This represents a decrease of 15,200 (1.9 percent) when compared to 789,500 in September 2012. Over the same period, the number of males Outside the Labour Force declined by 5,100 (1.6 percent) moving from 311,700 to 306,600 and females by 10,100 (2.1 percent) moving from 477,800 to 467,700.

Filed Under: Economy Tagged With: Economy, Employment, GOJ, Statin

Grants prop up GOJ revenues

February 2, 2014 by IC Insider.com

The Government of Jamaica’s revenues for December 2013 came up well short of budget. It would have been worse but for an unscheduled intake of grants amounting to $4.1 billion, which helped to prop up the revenues that fell short of budget by $7 billion. Overall, the fiscal operations ended up with a surplus of $5.32 billion in December compared to $5.25 billion originally projected.

For the nine months to December, the government is running $11 billion short on revenues and paid $16 billion less on housekeeping expenses and interest, excluding loan repayments, for an overall deficit of $19.6 billion that is $4.2 billion less than the amount budgeted for of $24.78 billion.

The revenue shortfall is across all major categories with international trade being one of the worse areas, down by $5.7 billion or 6 percent, Income taxes $5.2 billion or 7 percent followed by production taxes off by $1.5 billion or 2 percent. Amount spent on interest is down by $5 billion and capital expenditure by $9 billion.

The government is expected to announce in Parliament that they will close out the 2013/14 fiscal year with a virtual wipeout of the budgeted deficit by the end of March.

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Filed Under: Economy Tagged With: Deficit, Economy, GOJ

Interest rate rise & fall

January 29, 2014 by IC Insider.com

Interest rates on the latest issues of treasury bills by the Government of Jamaica on the 15th and 24th of January 2014 to provide funding for $1.2 billion showed mixed results.

Three offerings were available of $400 million each for duration of 28 days, 91 and 182 days. The rate on the 91 day instrument resulted in an average rate of 7.4292 percent a slight decline compared with the last issue of same duration, the rate for the 182 day instrument came out at 8.71734 percent reflecting a rise over the 8.25335 percent that obtained at the December 2013 auction, the 91 day issue resulted in an average rate of 7.5338 percent.

Investors received rates as high as 7.77998 percent for the 30 day T-Bill and as high as 10 percent for the longer dated instrument. Just over 11 percent of investors’ funds benefited from the higher yield for the 90 day paper buy. It was as high as 6.969 percent for the short term T Bills.

On January 15, an issue of a 28 day Treasury bill resulted in an average rate of 6.12 percent similar to the issue in December 2013 with a 6.12 percent average rate for the 28 day offer maturing in January and continues to compare favourably with the 6.2522 percent that obtained at the offer in November.

Related Posts | Interest rate eases

Filed Under: Economy Tagged With: BOJ, GOJ, TBills, Trading Activity

GOJ’s program for reduction & growth

January 26, 2014 by IC Insider.com

The principal objective of the Government of Jamaica’s programme is to reduce the national debt and raise the sustainable growth rate of our national output.

The governor of the Bank of Jamaica, Bryan Wynter, stated in a recent address at a JMA’s 2014 Economic Forum, that the Government has committed to implementing revenue, expenditure and debt management measures to ensure that the debt goes down in relation to GDP. This commitment entails the achievement of annual primary surpluses of 7.5% of GDP over the life of the programme. The governor went on to outline other measures that are to be put in place to achieve the main objectives.

“With this,” he stated, “the borrowing need of the Government has fallen sharply, which is leading to a steady reduction in the debt to GDP ratio to below 100% by 2020. Government intends to make the current fiscal responsibility framework stronger by developing binding fiscal rules. This will increase transparency, lock in the gains of fiscal consolidation and ensure that budgets will be sustainable even beyond the end of the four-year IMF agreement.

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“A central plank of the programme is the implementation of structural reforms aimed at creating an environment supportive of economic growth. One of the main structural reforms to which the Government has committed is the improvement of the tax system, including tax administration.

“Fiscal incentives legislation was also passed in December which overhauls and simplifies decades of tax law to the advantage of productive businesses.

“To kick-start growth, the government has started to implement catalytic, strategic, public-private investments. Already, the government has initiated production in six agro-parks, aimed at import substitution. The objective is to develop a total of nine such parks by the end of 2014.

“The GOJ is also committed to improving the competitiveness of the economy through legislative and administrative changes. Additionally, amendments to the Companies Act were passed which streamline the business registration process through the use of a multi-purpose registration instrument. A bill to modernise our bankruptcy rules, the Insolvency Bill, was also tabled in Parliament.

“The Government is in the process of establishing a Port Community System to electronically integrate and streamline export and import procedures. It is also moving to establish more flexible work arrangements and improve access to skills training. Furthermore, initiatives to achieve energy diversification and conservation are in progress.

“Supporting these reforms will be the preservation of a stable macroeconomic environment through sound monetary and fiscal policies. Inflation is expected to decline over the medium term towards our long-run objective. This decline in inflation, in conjunction with a more competitive exchange rate, will foster increased price competitiveness of Jamaica’s exports of goods and services.

“Lower inflation will also allow Jamaican businesses to finance investments at lower interest rates. The reduction in fiscal deficits and the public debt will make more resources available to the productive sector and will complement Bank of Jamaica’s thrust to maintain single-digit inflation.

“The Government also committed to undertaking reforms which will increase the efficiency and competitiveness of the financial system and credit market. You may have seen in the media recently, where we committed to a timetable for raising the cap on investments in foreign securities from 5% of assets to at least 25% by end-2015 and removing it by end-2016, unless extraordinary circumstances require a reassessment. The drafting of Jamaica’s Omnibus Banking statute, which includes regulations to give consumers increased protection and to underwrite the regulatory basis for agency banking, is far advanced.

“We are confident that we will be successful with the December test both with respect to the structural benchmarks and the quantitative performance criteria. More importantly, the Government is already looking ahead to the coming fiscal year with a view to crafting policies and commitments aimed at further improving the business climate in Jamaica and securing stronger growth.

“The economy began its recovery during the September quarter, registering growth of 0.5 per cent. We expect that growth of a little under 1.0 per cent will materialise for the fiscal year, in line with our projections.

“As the economy stabilises, the fiscal and external balances improve and the debt ratios are brought down towards sustainable levels, we should see the Government being able to address more effectively important social and developmental issues such as education and training and crime and social peace.”

Filed Under: Economy, Feature Stories Tagged With: BOJ, Economy, GOJ, IMF

Ministry confirms deficit wipe out

January 25, 2014 by IC Insider.com

The Ministry of Finance is now confirming the Investor’s Choice forecast that the fiscal year deficit to March 2014 will be effectively wiped out due to the revenue measures put in place earlier in 2013.

The Ministry, in a review of its operations and the economy to October 2013, indicates that the deficit is now “projected at 0.1% of GDP or $1.28 billion, a significant improvement on the 0.5% of GDP budgeted”. The deficit was originally projected at $8.046 billion and would have been down from a deficit in 2013 of $54.6 billion.

The estimated fiscal deficit of 0.1% of GDP is the lowest since Fiscal year 1995/96, when Central government operations generated a fiscal surplus, the ministry in their review states.

The projected improvement will emanate from the reduction in interest costs below the amount originally budgeted.

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The paper went on to state that “In spite of new tax measures that were implemented in 2013, there has been revenue shortfall. In an attempt to partially address the issue the Tax Administration Jamaica (TAJ) and Jamaica Customs Agency (JCA) have stepped up their administrative and operational activities, in an effort to keep collections in line with budget for the remainder of the year. While the actions are anticipated to yield positive results, they are not expected to be sufficient to reverse the revenue shortfall up to the end of October 2013. Within this context, the GOJ identified expenditure restraint measures of 0.5% of GDP, equivalent to $6,944.7mn, which will serve to ensure that the primary surplus remains on track with the programmed 7.5% of GDP target in the EFF. These adjustments will be reflected in Supplementary Estimates to be tabled in Parliament for approval in the final quarter of FY 2013/14.”

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Filed Under: Economy Tagged With: Deficit, Economy, GOJ

Major cost input for production in 2013

January 24, 2014 by IC Insider.com

The Producer Price Index (PPI) is up nearly 1 percent in November and for the 12 months to November there was an increase in the index for the Mining Quarrying industry of 13.4 per cent and the Manufacturing industry of 8.5 per cent based on the point-to-point movement.

Statistical Institute of Jamaica (STATIN), who compiles the data stated that “for the Mining & Quarrying industry PPI for November, increased by 0.9 per cent”, mainly due the continued depreciation of the Jamaican dollar during the period. “The producer prices for the Manufacturing industry increased by 0.8 per cent. This increase in the index for the Manufacturing industry, was mainly impacted by the upward movement in the index for the major groups; ‘Food, Beverages & Tobacco’ and ‘Other Non-Metallic Products’ of 0.9 per cent, and 3.2 per cent respectively”.

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The point-to-point movement to November in the Manufacturing industry mainly resulted from increases of the following major groups: ‘Food, Beverages & Tobacco’, 7.5 per cent, ‘Refined Petroleum Products’ 12.0 per cent and ‘Other Non-Metallic Mineral Products’ 20.9 per cent.

The period April 2013 to November 2013, the Mining & Quarrying industry reflected an upward movement in its index of 8.1 per cent and the Manufacturing industry’s index rose by 3.5 per cent.

Related post | November worse month for revenues

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