Economy — Page 54

Inflation high, lower than September

November 19, 2013 by IC Insider.com

A combination of factors led to a hike in inflation in October as measured by the Consumer Price Index (CPI) of movements for householders.

According to the Statistical Institute of Jamaica (STATIN), the inflation rate as recorded by the All Jamaica ‘All Divisions’ Consumer Price Index was 0.8 percent for October 2013. Impacting the index for this month was the 3.9 percent increase in the index for the division ‘Housing, Water, Electricity, Gas and Other Fuels’ due mainly to upward movement in the cost of water and sewerage, which resulted in a rise of 20.0 percent in the group ‘Water Supply and Miscellaneous Services Related to the Dwelling’. Also increasing in this division was the group ‘Electricity, Gas and Other Fuels’ which rose by 2.9 percent. All other divisions with the exception of ‘Transport’ and ‘Communication’ recorded increases in their index Statin stated. Transport fell by 0.4 percent due to lower prices for petrol and air fares while Communication fell by 0.6 percent due to the reduction in some telecommunication rates.

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The calendar year-to-date inflation rate for October 2013 was 8.6 percent, the point-to-point 10.3 percent. The October out turn reflects moderation from the 2.8 percent recorded for September, which Statin said stemmed mainly from bus fare increases.

The other divisions that recorded increases in the All Jamaica ‘All Divisions’ index were: ‘Food and Non-Alcoholic Beverages’ 0.4 percent, ‘Alcoholic Beverages and Tobacco’ 1.8 percent, ‘Clothing and Footwear’ 0.2 percent, ‘Furnishings, Household Equipment and Routine Household Maintenance’ 0.6 percent, ‘Health’ 0.4 percent, ‘Recreation and Culture’ 0.3 percent, ‘Restaurants and Accommodation Services’ 0.1 percent, and ‘Miscellaneous Goods and Services’ 1.1 percent.

The regional index showed upward movements in all three regions: Greater Kingston Metropolitan Area 0.8 percent, Other Urban Centres recorded a movement of 0.9 percent and Rural Areas 0.8 percent.

Related posts | Jamaica’s inflation jumps

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Filed Under: Economy Tagged With: CPI, Economy, Inflation, Statin

Balance of payment improves

November 19, 2013 by IC Insider.com

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

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

Businesses see J$ at $110 late 2014

November 19, 2013 by IC Insider.com

According to a survey undertaken by Bank of Jamaica in September, senior officers in the business sector anticipate an upturn in the pace of depreciation of the Jamaican dollar for the 3-month, 6-month and 12-month periods beyond the survey date.

This was relative to the August 2013 survey, which showed a lower expected pace of depreciation over all the time horizons. In the September 2013 survey, the exchange rate was expected to depreciate by 1.8 percent, 3.0 percent and 4.7 per cent for the 3-month, 6-month and 12- month horizons, respectively.

By comparison, the August survey had expected depreciation of 1.5 per cent, 2.6 percent and 4.3 percent over the respective horizons.

If the expectations of the interviewees were to materialise, then the exchange rate would be around J$110 to the US dollar but then that is not quite consistent in the September 2013 survey where the respondents’ expectation of inflation 12-months ahead increased to 10.4 percent in the September 2013 survey, relative to 10.3 per cent in the August 2013 survey. This inflation expectation would suggest an exchange rate adjustment closer to 7 or 8 percent.

The Statistical Institute of Jamaica (STATIN) undertakes surveys of businesses on behalf of the Bank of Jamaica to ascertain the expectations 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.

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

Unemployment jumps to 15.4%

November 15, 2013 by IC Insider.com

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Jamaica’s unemployment rate, which has been on the increase since 2008, jumped to 15.4% for July 2013 compared to 13.1% in July 2012 as more workers came into the workforce. For the same period, the unemployment rate for males was 11.7% compared to 19.9% for females. The Employed Labour Force for July 2013 was 1,108,100, which was 3,100 less than the 1,111,200 recorded in July 2012 but was slightly above the numbers recorded in March this year. For males, it decreased marginally by 600 (0.1%) to 632,100 and for females by 2,500 (0.5%) to 476,000 for the period.

In March this year, the number of employed persons was 1,107,400 compared to 1,098,700 recorded in March 2012 and 1,093,200 in December last year.

The number of unemployed persons in July 2013 was 201,600. This was an increase of 34,200 (20.4%) when compared with 167,400 in July 2012. The number of unemployed males increased by 13,900 (19.9%) and the number of females by 20,300 (20.8%) for the same period.

The July 2013 Labour Force Survey, was conducted by the Statistical Institute of Jamaica (STATIN) and covered the week of June 23-29.

Labour Force | In July 2013, the number of persons in the Labour Force was 1,309,700, which was 31,200 (2.4%) higher than the 1,278,500 recorded in July 2012. The male labour force increased by 13,400 (1.9%) from 702,300 in July 2012 to 715,700 in July 2013, and the female labour force increased by 17,800 (3.1%) moving from 576,200 to 594,000 in the same period.

The Employment Rate for July 2013 was 84.6%, which was a 2.3 percentage point decline from the 86.9% in July 2012. The Employment Rate declined for both males and females over the period. For males, it declined by 1.8 percentage points, moving from 90.1% to 88.3%, and for females it declined by 2.9 percentage points, from 83% to 80.1% over the same period.

Outsiders | The number of persons who were classified as Outside the Labour Force in July 2013 was 768,000. This represents a decrease of 25,500 (3.2%) when compared to 793,500 in July 2012. In the same period, the number of males Outside the Labour Force declined by 10,400 (3.3%) moving from 314,400 to 304,000 and the females by 15,100 (3.2%) moving from 479,100 to 464,000 over the period.

Where they work | The Occupation group ‘Clerks’ had an increase in employment of 5,600 (5.8%) persons, moving from 96,300 in July 2012 to 101,900 in July 2013. The group ‘Craft and Related Trade Workers’ had the largest decline for the period, moving from 149,600 to 141,800 in July 2013 resulting in a decline of 7,800 (5.2%) persons.

The largest increase in employment occurred in the industry group ‘Real Estate, Renting and Business Activities’ where the number of persons employed increased by 11,300 (19.3%). Similar increases were experienced in the group ‘Health and Social Work’ where it increased by 4,300 (14.3%) persons. During the same period, the industry group ‘Manufacturing’ declined by 8,700 (11.3%) persons followed by ‘Wholesale & Retail, Repair of Motor Vehicle & Equipment’ which declined by 5,200 (2.4%) persons.

Unemployment rates among youths aged 14-24 years was 38.3% for July 2013. This was an increase of 6.6 percentage points when compared with 31.7% in July 2012. The male unemployment rate for youths was 29.5% compared to 50.3% for females.

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

Producers inflation moderate

November 5, 2013 by IC Insider.com

As reported by Statin, the Producer Price Index for the Mining & Quarrying industry increased by 0.7 per cent for September. This resulted mainly from the depreciation of the Jamaican dollar via-a-vis the American Dollar.

The Manufacturing industry recorded an advance in producer prices of 0.5 per cent. Contributing significantly to this increase was the upward movement in the index for the major group ‘Food, Beverages & Tobacco’ up by 0.2 per cent and ‘Refined Petroleum Products’ by 1.9 per cent. However, these movements were tempered by the major group ‘Chemicals & Chemical Products’ which reflected a decline of 0.2 per cent in its index for the period under review.

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The point to point period, September 2012 to September 2013 recorded an increase of 14.0 per cent in the index for the Mining & Quarrying industry. For the same period, the Manufacturing industry’s index increased by 8.0 per cent. For the fiscal year to date, April 2013 to September 2013, showed that the index for Mining & Quarrying industry advanced by 2.8 per cent, while the Manufacturing industry recorded an increase of 2.0 per cent.

A comparison of the third quarter 2013 over the second quarter of 2013 for the Mining & Quarrying and the Manufacturing industry showed both industries increasing by 2.0 per cent and 1.2 per cent respectively.

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

Big drop in trade deficit

November 5, 2013 by IC Insider.com

Jamaica enjoyed a big drop in its trade deficit in the first 7 months of the year as the deficit declined to US$2.64 billion compared to US$2.85 million in the same period for 2012 according to the latest data put out by the Statistical Institute of Jamaica (STATIN).

According to the Government’s agency for the collection of economic and other data, merchandise imports during January to July 2013 was valued at US$3.62 billion, a decrease of US$213 million when compared to the US$3.83 billion recorded in the similar period last year due mainly to a fall in the value of fuel imported. Earnings from total exports during review period was similar to the 2012 period both at US$978 million.

Statin sated in their release that the decline in imports was largely attributed to the decrease expenditure on “Mineral Fuels, etcetera”. Other areas showing decreases were “Machinery & Transport Equipment”, “Manufactured Goods” and “Miscellaneous Manufactured Articles”. “Mineral Fuels, etcetera” valued at US$1.28 billion, fell by US$241 million or 15.8 percent compared with the 2012 period. “Machinery & Transport Equipment” fell by US$5.3 million or 1.0 percent to US517.5 million and “Manufactured Goods” was valued at US$338 million, a decrease of US$35.3 million.

Traditional Exports | Earnings from major traditional domestic exports during the 2013 review period decreased by US$21 million to US$488 million due to the significant decline in ‘Manufacture’. Goods classified under the “Manufacture” group accounted for US$86 million, down from US$129.5 million in 2012 mainly due to the decrease in the export of ‘Sugar’ and’ Rum’. “Agriculture” group recorded an increase, earning US$17 million, as the major commodity in this group “Coffee” earned US$13.3 million compared to US$10.4 million in 2012. “Mining and Quarrying” earned US$385 million in the 2013 period.

Non-Traditional Exports | Earnings for this segment to July 2013 rose by 3 percent or US$12.8 million to US$442.4 million. “Other” non-traditional domestic exports rose by 8.1 percent to earn US$318 million. Of this amount, “Chemicals (incl. Ethanol)” earned US$99 million, an increase of US$47 million.

CARICOM | Imports from CARICOM during the first seven months was worth US$484 million but it decreased by 18.3 percent or US$108.5 million when compared to the same period in 2012. The decrease in the import bill was due mainly to lower imports of “Mineral Fuels, etcetera” as spending fell by US$120 million to US$314 million. “Manufactured Goods” recorded a value of US$13 million, down from US$15 million in 2012. Other decreases were seen in “Chemicals” and “Machinery & Transport Equipment” valued at US$15.7 million and US$6.0 million respectively. Three of the five commodity groups recording increases were “Food” valued at US$100.2 million, “Beverages & Tobacco” ( US$24.9 million) and “Misc. Manufactured Articles” ( US$8.4 million).

Total exports to Caricom declined by 3.6 percent during the review period. Domestic Exports accounted for US$33 million, and Re-exports US$6 million. The fall in domestic exports was due mainly to lower exports of “Chemicals”, which decreased by US$3.6 million or 51.0 percent to US$3.5 million and “Misc. Manufactured Articles”, which fell by 12.9 percent to US$2.2 million. However, “Food” the major export earner, increased and was valued at US$19 million, up from the US$17.5 million. Jamaica recorded a trade deficit of US$445 million with her CARICOM partners, down from US$552 million in the 2012.

Related posts | Non-Traditional exports up

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

Govt set to wipe out deficit

November 5, 2013 by IC Insider.com

The budget presented by the Government of Jamaica to the nation in April did not paint a full picture of what was on the cards. That is, the full wiping out of the fiscal deficit in one year and laying the foundation for a reduction in the heavy debt to GDP load the country has borne for decades. The government is well on target to do this based on the performance to September with a deficit of only $6.6 billion and the heavy inflow of taxes between January and March 2014.

After faltering in August partially due to the last day’s collections not counted in the August fiscal numbers, revenues in September shot past the forecast to land the overall year to date collections right on target but for a half a billion dollar shortfall, which was more than made up for by a near $11 billion savings on the expenditure side. The fiscal deficit is well ahead of forecast at just $6.6 billion versus a target at this stage of $17 billion.

Although revenues as a whole are on track, there are areas of concern where intake is less than planned by a fair degree. Capital and non-tax revenues are up by $5 billion year to date which helped to offset fall off in other areas. Also of note, travel tax, which is up by 69 percent due what the Ministry says is past due amounts that being collected, but this is not sustainable at the same pace going forward once the arrears are cleared.

Negative inflows | International trade is down year to date by $2.6 billion; this would have been far worse but for the positive collections for travel tax. Production and consumption taxes have not performed badly although down by $388 million from a forecast of $58.5 billion as education tax is down versus budget by 8 percent to $8.6 billion. Betting and gaming tax is down 38 percent at $1.13 billion. In the area of income taxes, PAYE is down by 6 percent or $2 billion to $30.4 billion, corporate taxes are up by $800 million as tax on dividends fell by $765 million or 57 percent against forecast. As government paid out less interest on the debt, the collection for tax on interest income fell.

Less debt | Government borrowed nearly $10 billion less than budgeted and cut the interest paid for servicing the monstrous debt by $5.6 billion. Payments for other housekeeping expenses other than wages declined by $2.6 billion, in addition $1.7 billion was spent on capital items during the six months period.

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

Remittances up, but barely

October 22, 2013 by IC Insider.com

Bank of Jamaica is reporting improved remittance flows for July 2013 and for the year to date. According to the central bank, net remittances were US$149.7 million, an increase of US$3.4 million or 2.3 per cent relative to the corresponding period of 2012. The growth in the net inflows reflected both an increase in gross remittance inflows and a contraction in outflows.

Gross remittance inflows for the month were US$170.5 million, an increase of US$1.6 million relative to July last year.

The rise in total remittance inflows reflected an increase of US$3.3 million in inflows through Remittance Companies and a decrease of US$1.7 million in inflows via Other Remittances. This is consistent with IC Insider’s findings for when there is strong instability in the foreign exchange market like what occurred after May of this year.

Total remittance outflows for the review month decreased by US$1.7 million to US$20.8 million.

Net remittances for January to July 2013 were US$1.049 billion, an increase of US$11.7 million over 2012. The outturn reflects a reduction in outflows which were partly offset by inflows.

For the review period, total remittance inflows were US$1,190.8 million, a decrease of US$4.9 million but outflows declined by an even larger amount of US$16.6 million thus contributing to an increase in the net inflows.

The decrease in total remittance inflows reflected a US$15.6 million or 1.5 per cent contraction in inflows through Remittances Companies, which was partly offset by a US$10.7 million or 6.2 per cent increase in flows through the Other Remittances sub-category.

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

Jamaica’s inflation jumps

October 17, 2013 by IC Insider.com

The Statistical Institute of Jamaica (Statin) is reporting a big jump in inflation in the month of September resulting primarily from hike in bus and taxi fares along with electricity cost.

“Inflation measured by the All Jamaica ‘All Divisions’ Consumer Price Index, increased by 2.8 percent for September 2013, the highest monthly movement experienced since July 2008” Statin said. This movement was influenced significantly by the increase in bus and taxi fares, which resulted in the ‘Transport’ division recording the highest movement for the month, 17.1 percent. Also contributing to the upward inflation rate was the 3.6 percent increase in the index for the ‘Education’ division caused by the rise in the cost of tuition fees for the new school year additionally, the upward movement in electricity cost increased the index for the ‘Housing, Water, Electricity, Gas and Other Fuels’ Division by 3.3 percent.

The calendar year–to-date inflation rose by 7.7 percent up from 4.8 percent in August. The point-to-point movement was 10.4 percent. All other divisions that make up the All Jamaica index recorded increases. ‘Food and Non-Alcoholic Beverages by 0.6 percent, ‘Alcoholic Beverages and Tobacco’ 0.3 percent, ‘Clothing and Footwear,’ 0.7 percent, ‘Furnishings Household Equipment’ and Routine Household Maintenance’, 0.3 percent, ‘Health’, 0.2 percent, ‘Recreation and Culture’, 0.3 percent, ‘Restaurants and Accommodation Services’ 0.2 percent, and ‘Miscellaneous Goods and Services’ up by 0.6 percent. There was no movement recorded for ‘Communication’.

The Index advanced in all three regions: Greater Kingston Metropolitan Area (GKMA), 2.5 percent, Other Urban Centres (OUC), 2.7 percent and rural areas by, 3.1 percent.

Filed Under: Economy Tagged With: Economy, Statin

Credit expansion slows in T&T

October 14, 2013 by IC Insider.com

In an economy that has shown some growth but is still weak, the Trinidad & Tobago Central Bank stated recently that “overall private sector credit growth though slow, has been relatively steady thus far in 2013”.

On a year-on-year basis, private sector credit grew by 3.0 per cent in July 2013 compared with just over 2 ½ per cent in June 2013. The growth is below the rate of inflation for the year to August. Consumer lending continued to strengthen, increasing by almost 6½ per cent (year-on-year) in July from 6.2 per cent in June 2013. On the other hand, business loans contracted for the eighth consecutive month, falling by 5.0 per cent in July 2013. Real estate mortgage loans, however, maintained strong double digit growth.

Large net domestic fiscal injections along with weak credit demand contributed to a rapid build-up of liquidity levels in the financial system over the past few months. Commercial banks’ excess reserves at the Central Bank rose from a daily average of $5.4 billion in July 2013 to a daily average of $6.3 billion in August, the Central Bank stated.

Excess reserves increased even further to a record daily average of $8.3 billion over the first three weeks of September. While the $1 billion Central Government treasury bond offered in early August 2013 was undersubscribed, the allotment of almost $560 million helped to reduce some of the excess liquidity. Central Bank open market operations and sales of the foreign exchange also removed some of the excess liquidity from the system in July-September 2013.

The substantial expansion in liquidity has kept short-term, domestic treasury rates at record low levels, with the discount rate on 3-month treasury bills holding at 0.14 per cent in the final week of September 2013.