Inflation jumps 1 percent in May, the Statistical Institute of Jamaica (Statin) stated in a release today, compared to the index for April. An increase of 0.7 percent in ‘Food and Non-Alcoholic Beverages’ and 3.6 percent increase in the index for the division ’Housing, Water, Electricity, Gas and other Fuels’ were the major reasons for the sharp climb. The movement in the index for May 2014 resulted in a calendar year-to-date inflation rate of 2.4 percent. Inflation declined in April by 0.7 percent compared to March this year.
According to Statin, the division ‘Food and Non-Alcoholic Beverages’ was impacted by increases of 1.9 percent and 1.6 percent in ‘Bread and Cereals’ and ‘Milk, Cheese and Eggs’ respectively. There were declines of 0.4 percent and 0.3 percent for the classes ‘Fruit’ and ‘Vegetables and Starchy Foods’ respectively. Within the division ‘Housing Water, Electricity, Gas and Other Fuels’ the advance in the index for ‘Electricity, Gas and Other Fuels’ of 7.3 percent was moderated by the fall of 3.4 percent in the index for ‘Water Supply and Miscellaneous Services Related to Dwelling’
The other divisions that recorded increases in the All Jamaica ‘All Divisions’ index were: ‘Alcoholic Beverages and Tobacco’ 0.5 percent, ‘Clothing and Footwear’ 0.2 percent, ‘Furnishings, Household Equipment and Routine Household Maintenance’ 0.5 percent, ‘Health’ 0.2 percent, ‘Transport’ 0.4 percent, ‘Recreation and Culture’ 0.1 percent, ‘Restaurants and Accommodation Services’ 0.5 percent, and ‘Miscellaneous Goods and Services’ 0.5 percent.
Net International Reserves Down
Jamaica’s Net International Reserves (NIR) fell by US$120 million in May. The NIR moved from US$1.285 billion to US$1.165 billion and is now at the equivalent of 12.66 weeks of Reserves in Weeks of Imports of Goods and Services.
Jamaica’s inflation falls
A fall in the price of electricity lead to a 0.3 percent drop in the inflation rate for April this year, according to data released by the Statistical Institute of Jamaica, on the Consumer Price Index. Statin says “this was the lowest inflation rate recorded since July 2012, when the rate fell by 0.3 percent”.
This decrease was as a result of a decline in electricity rate, represented by a fall of 7.5 percent in the index for the group ‘Electricity, Gas and Other Fuels’ but was moderated by the 4.0 percent increase in the index for the group ‘Water Supply and Miscellaneous Services Related to the Dwelling’ as a result of a the rise in water and sewage rates for the period. The division, ‘Food and Non-Alcoholic Beverages’ recorded an increase of 0.3 percent.
The calendar year-to-date inflation rate for April 2014 was 1.4 percent, the point-to-point 7.6 percent. The other divisions that recorded increases in the All Jamaica ‘All Divisions’ index were: ‘Alcoholic Beverages and Tobacco’ 0.2 percent, ‘Clothing and Footwear’ 0.1 percent, ‘Furnishings, Household Equipment and Routine Household Maintenance’ 0.3 percent, ‘Health’ 0.5 percent, ‘Transport’ 0.4 percent, ‘Recreation and Culture’ 0.3 percent, ‘Restaurants and Accommodation Services’ 0.4 percent, and ‘Miscellaneous Goods and Services’ 0.2 percent.
GOJ revenues up in April
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The GOJ enjoyed slightly higher revenues in the first month of the fiscal year with total inflows of $24.7 billion versus $24.4 billion budgeted.
The increase came from non-tax revenues. Expenditure was slightly less than planned and came in at $33.9 billion only $31 million less than budget, resulting in an reduced fiscal deficit than originally projected coming in at $9.16 billion compared to $9.53 billion budgeted.
The government however, borrowed $1.4 billion less that they projected to borrow in the month.
Imports down to February
Imports are down for the first two months of 2014 and was valued at US$884 million compared to US$1,117.4 million, a decrease of 20.9 per cent or US$233.3 million when compared to the same period in 2013” the Statistical Institute of Jamaica reported recently.
The figures are in line with imports in the first month of the year as imports fell sharply by 20.8 percent or US$115.7 million to US$442 million compared to US$558 million in January last year due mainly to reduced imports of fuel and chemicals but exports for January were also down sharply, declining by 25.3 percent or US$39 million to US$115 million, resulting in shrinking of the trade deficit by US$77 million or 19 percent to US$327.3 million when compared to US$404.2 million in the corresponding 2013 period.
J$ records gains
Trading levels on the forex market on Wednesday were in line with Tuesday’s trading as dealers bought the equivalent of US$31,964,036 compared to US$31,967,960 on Tuesday and sold the equivalent of US$32,324,584 versus US$32,689,906. Trading activity lead to the local currency gaining ground against the US dollar, it was mixed against the Canadian dollar and the Pound Sterling.
In US dollar trading dealers bought US$27,124,675 compared to US$26,541,282 on Tuesday as the buying rate for the US dollar fell 7 cents to $110.63 and sold US$29,947,593 versus US$28,962,746 on Tuesday with the rate closing 2 cents lower at $111.28.
The Canadian dollar buying rate rising 15 cents to end at $100.69 with dealers buying C$2,299,846 and selling C$960,758 with the rate declining by 13 cents to end at $101.80.
The Pound closed at $183.35 for the purchase of £1,512,515 with the rate rose by 66 cents while £765,366 was sold with the rate declining by 61 cents to $186.26.
Other currencies bought amounted to the equivalent of US$221,150 while selling accounted for the equivalent of $217,387.
Highs & Lows| The highest buying rate for the US dollar fell 10 cents to $111.55 but the lowest buying, highest selling rates remained unchanged at $90.18 and $115.56 respectively but the lowest selling increased by $18.42 to $108.60.
The highest buying rate for the Canadian dollar fell by 35 cents at $102.20, the lowest buying rates lost 17 cents to $80.30 but the highest selling rate fell a cent to $104 and lowest selling rate was down by 20 cents to $96.75.
The highest buying rate for the Pound gained $1 to $188 while the lowest buying rate was up just 4 cents to $148.40. The highest selling rate dropped by $1.49 to $189.77 while the lowest rose by 5 cents to $178.80.
Remittance growth continues
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.
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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