Economy — Page 59

Non-traditional exports climbs 18%

July 2, 2013 by IC Insider.com

Exports of non-traditional commodities jumped 18 percent over the 2012 with a value of US$222 million during January to March 2013 period helping to propel it moved past traditional exports. The change accounted for a larger share of domestic exports, moving it from 44.4 per cent in the 2012 review period to 51 per cent in the current 2013 review period as traditional exports declined during the quarter.

Total traditional exports amounted to US$213 million in the 2013 review period, down from US$235 million in the previous 2012 period for a decrease of US$22 million or 9.3 per cent. The improvement in exports was insufficient to cover the increase in imports, leaving a bigger trade gap than in the similar quarter in 2012. Total exports for the period amounted to US$451 million up from US$435 million in the 2012 period, an increase of US$16 million or 3.7 per cent.

Imports were valued at US$1.715 billion during the quarter, compared to the US$1.629 billion during January to March period last year, an increase of US$86 million or 5.3 percent. At the end of the quarter, the total merchandise trade deficit widened to US$1,264 million compared to US$1,195 million in the previous year.

Import categories | During the January to March 2013 period, there was a general upward trend in the value of imports for all but three commodity groups, “Mineral Fuels, etcetera”, “Manufactured Goods” and “Machinery and Transport Equipment”. The commodity group “Mineral Fuels, etcetera” had a value of US$566 million, a US$141 million or 19.9 per cent drop from US$706 million in the similar period in 2012.

Higher imports of ’organic chemicals’ mainly ethanol, ‘medicinal and pharmaceutical products’ resulted in the value of imports rising by US$188 million over the January to March 2012 period.

Imports of “Food” was valued at US$279 million, up from the US$239 million reported for the similar 2012 period due to increases in ‘cereals and cereal preparations’, ‘feeding stuff for animals’, ‘miscellaneous edible products and preparations’ and ‘vegetables and fruits’.

Total Exports | Earnings from total exports during the January to March 2013 period amounted to US$451.0 million, of which domestic exports was valued at US$434.6 million and re-exports US$16.4 million.

Traditional Domestic Exports | During the March quarter of 2013, the contribution of major traditional domestic exports to the value of domestic exports decreased from 55.6 per cent in the first quarter of 2012 to 49.0 per cent.

During the month of March 2013 the United States of America (USA) remained Jamaica’s main trading partner with US$226 million or 37 per cent of imports originating from that country. This brought the year-to-date imports from the USA to US$639 million. Approximately US$66.3 million or 50.9 per cent of total exports was sent to the USA in March 2013 bringing the year-to-date exports to US$248 million. At the end of the first quarter of 2013, Jamaica incurred a trade balance with the USA of S$391 million down from US$403 million in the first quarter of 2012.

Filed Under: Economy Tagged With: Economy, GOJ

Gov’t raking in taxes

July 1, 2013 by IC Insider.com

Government is doing very well so far for this fiscal year. They collected a billion dollars more for the month of May, while the deficit for April came in less than $1.5 billion originally reported. The April deficit has now dropped to $884 million in the latest report from the Ministry of Finance.

The original deficit for April was projected at $3.5 billion making the actual out turn far better than planned as spending on interest cost was down amongst other areas of expenditure. The latest data released for May shows that revenues that were initially reported to be on par with budget when the April figures were first released is now up by $620 million more than planned. The April out turn for revenues is up by 11.7 percent and May is 13 percent up over intake for the same months last year.

The data for May show that taxes on local production & consumption climbed by a massive 19.44 percent or $1.75 billion above plan. However, the $1.2 billion increase in expenditure came from $1 billion more spent on interest payment, $400 million saved on wages and $600 million more spent on programmes.

The improved revenue in May was aided by a near billion dollar increase in special consumption tax on locally produced goods, improvement in motor vehicle license, accommodation, telephone taxes, $500 million improvement in local GCT, $300 million more each in stamp duty and travel taxes, offset by poorer performance in special consumption taxes for imports amounting to $540 million, $700 million drop in PAYE and $200 million in education tax. Company profit taxes performed better in April and May that budgeted.

The year-to-date deficit is provisionally put at $4.1 billion or $2.3 billion better than forecast.

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

Remittance inflows dip

June 26, 2013 by IC Insider.com

Total remittance inflows for the March 2013 quarter were US$492.5 million, a decrease of US$12.3 million or 2.4 per cent compared to the corresponding quarter of the previous year. The inflows for the quarter were above the average for the previous five corresponding periods with the flows for January 2013 being the highest since 2010 with US$154 million, February inflows at $160 million was slightly under the US$167 received in 2012 and March was the worse month relative to 2012 as inflows fell by US$9.5 million to reach $178.4 million.

For the first quarter of 2013, net remittances were US$431.5 million, a decline of US$5.1 million or 1.2 per cent relative to the corresponding quarter of the previous year. The outturn for the quarter reflects the decrease in gross inflows, which was partially offset by a decline in outflows.

The decrease in total remittance inflows reflected a US$14.2 million or 3.3 per cent deterioration in inflows through Remittance Companies. The decrease in inflows was partly offset by a US$1.9 million or 2.6 per cent increase in flows via Other Remittances sub-category.

Last year Jamaica received the highest amount of remittances in its history with $2,037 billion up from $2,019 billion in 2011. Prior to this period remittances peaked in 2008 at US$2,021 billion just after the global recent started to take hold.

The fall in remittances in the first quarter of this year may be linked to the fall in the value for the Jamaican dollar and the scarcity of foreign exchange during the period. Examination of past behaviour show a strong co-relationship between inflows and exchange instability. When there is instability in the foreign exchange market some of the funds that would normally flow into the formal financial system are diverted to end users and therefore never get reported.

Filed Under: Economy Tagged With: Economy, FX Market

Long dated T-Bills snubbed as rates rise

June 19, 2013 by IC Insider.com

Add your HTML code here...

Investors snubbed the longer dated Treasury bills instruments as they stayed at the short end of the interest rate spectrum with an oversubscription for the 30-day Treasury bills but left unfilled the 3-month and 6-month instruments at today’s auction to raise $1.2 billion for the Government of Jamaica.
Treasury bills maturing Friday, 19 July 2013 attracted $499,693,300 for the $400,000,000 that was available and provided yields of 5.5 percent to a high of 7.534 percent with the average yield being 6.02245 percent to successful bidders.
The three month issue that matures on Friday, 20 September 2013 for $400,000,000 but only attracted $284,330,500 and provided yields of 5.5 percent to a high of 7.81356 percent, with the average yield being 6.75847 percent, representing an increase of nearly 15 basic points over the May issue.
The development today is in contrast to the May 24^th Treasury Bill auction when both the six months and three months’ issues were heavily oversubscribed twice over. The average yield for the three months was then 6.6197 percent with a range of 5.54998 to 6.68779.
The six month issue that matures Friday, 20 December 2013 was also for $400,000,000 but attracted just $201,628,400 but provided yields of 5.99999 percent to a high of 8.28964 percent with the average yield being 7.1203 percent, resulting in an increase in rates of 68 basic points.

The six months instrument yielded between 5.75 percent and 6.8799 percent with the average being 6.4437 percent in May.

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

Barbados raising BDS$150M

June 19, 2013 by IC Insider.com

The Government of Barbados has announced the issue of two bonds, one a debenture and the other Treasury notes to raise BDS$150 million in total, starting on the 24^th June.

The debenture which will open on Monday, June 24, 2013 and will be issued at par with a fixed interest rate of 6 7/8% per annum payable on June 30 and December 31 of each year and is targeted to raise BDS$100 million.

The Treasury Notes targets BDS$50 million and will be issued at par with a fixed interest rate of 4 1/8% payable on June 30 and December 31 of each year. The Treasury Notes will be repayable at par on June 30, 2015.

The interest due on both instruments to Pensioners 60 years and over residing in Barbados will not be subject to withholding tax. Non-residents seeking tax exemption must satisfy the Commissioner of Inland Revenue of their status before exemption is granted. However, for all persons resident in the island, the interest from these Debentures will be taxed separately from other income at a rate not exceeding 12½%. These Debentures will be repayable at par on June 30, 2024. The issue will remain opened until the Central Bank advises that it has been fully subscribed.

Filed Under: Economy Tagged With: Barbados, Economy, TBills

Inflation up in May

June 19, 2013 by IC Insider.com

Inflation for May as measured by the All Jamaica ‘All Divisions’ Consumer Price Index increased by 0.5 percent, a 0.1 percentage point increase over the 0.4 percent increase recorded for April 2013, this according to a release from the Statistical Institute of Jamaica (Statin).

The CPI movement was influenced by a 0.8 percent increase in prices for ‘Food and Non-Alcoholic Beverages’, the heaviest weighted division in the computation of the Index. The main contributor to the division’s inflation was an increase of 1.3 percent in the index for ‘Vegetables and Starchy Foods’. ‘Transport’, the second heaviest weighted division, recorded a decline, moving down by 0.2 percent. This was primarily because of lower prices for ‘Fuels and Lubricants for Personal Transport Equipment’, particularly petrol, Statin said. The third heaviest weighted division of the CPI, ‘Housing, Water, Electricity, Gas and Other Fuels’, recorded an increase of 0.7 percent. The upward movement in the index for May 2013 resulted in a calendar year-to-date movement of 3.7 percent.

The other divisions that recorded increases were ‘Alcoholic Beverages and Tobacco’ 0.7 percent, ‘Clothing and Footwear’ 0.3 percent, ‘Furnishings Household Equipment and Routine Household Maintenance’ 0.6 percent, ‘Health’ 0.3 percent, ‘Recreation and Culture’ 0.7 percent, ‘Restaurants and Accommodation Services’ 0.3 percent, and ‘Miscellaneous Goods and Services’ 0.4 percent. No movement was recorded for ‘Education and ‘Communication’.

All three regions covered by the survey recorded increases for the period; Greater Kingston Metropolitan Area (GKMA) 0.6 percent, Other Urban Centres (OUC) 0.8 percent and Rural Areas 0.4 percent.

Filed Under: Economy Tagged With: Economy, Statin

BOJ offers yet another instrument

June 17, 2013 by IC Insider.com

Fast on the heels of an issue of two local certificates of deposit that close on Tuesday, 18 June 2013, Jamaica’s central bank, the Bank of Jamaica, announces the offer of another special money market instrument commencing Thursday, 20 June 2013. The instrument, a 365-day US-Dollar Indexed Note due 2014 and is extended to all primary dealers and commercial banks.

The term sheet will be circulated via electronic mail to these institutions on Wednesday, 19 June 2013. A check with the BOJ did not disclose the terms of the issue other than what has been released but IC Insider gathers that the use of this instrument is to provide an alternative instrument for investment purposes without affecting the demand for foreign exchange. IC Insider can report that at least one big bank is rationing US dollars to $2,000 per day per person.

The central bank says in a release that it will continue to offer its regular 30-day Certificate of Deposit at the current interest rate of 5.75 per cent per annum. In addition, the current offers of variable rate Certificate of Deposits will remain open until Tuesday, 18 June 2013, as originally advised and will continue to monitor conditions in the financial markets and adjust its market operations to maintain stability.

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

More tertiary education cost to be borne by students

June 13, 2013 by IC Insider.com

The Minister of Education, The Honourable Reverend Ronald Thwaites, in a speech yesterday, indicated that Jamaica has been grossly under spending on early childhood education.

He indicated that for this financial year, the Ministry of Education has allocated 14.6% or just over $11 billion of the education’s Ministry recurrent budget to early childhood and special education. The Minister says that, “It is an investment we cannot put off due to the importance of the early years to the child’s educational development”. He says “It will mean other areas will have to ensure that the majority of that dollar is spent on delivering an effective education product”, Minister Thwaites stressed.

Reverend Thwaites indicated that the move will require sacrifices, “admittedly difficult, from parents and teachers”. It will mean that the cost of tertiary education will be more and more borne by the recipients of it rather than by the State.”

Source: MoneyMasters Ltd press release

Filed Under: Economy Tagged With: GOJ

Mixed views from Eastern Carib States

June 13, 2013 by IC Insider.com

Business expectations in the Eastern Caribbean states are mixed. That should not be too surprising as the region is in recession with negative inflation for the first three months of the year. In a business survey carried out by the EC Central Bank, 37.4 per cent of the businesses surveyed indicated that they anticipate that general economic conditions would improve in the first half of 2013, while 23.6 per cent expect economic conditions to deteriorate. Of the total, 39.0 per cent expect conditions to remain the same. This resulted in an overall net percentage indicator (NPI) of 13.74 for the region, reflecting the overall positive business sentiment for the first half of 2013. Respondents also expressed optimism when they were asked about the economic climate within their sector.

Survey respondents in five of the ECCU member countries are optimistic about their prospects for the first half of 2013 with positive NPIs being recorded for Grenada (60.0), Montserrat (48.0), Antigua and Barbuda (47.62), St Kitts and Nevis (20.0), and St Vincent and the Grenadines (12.50); while businesses in Saint Lucia (-66.67), Dominica (-36.0), and Anguilla (-18.75), were generally pessimistic about their prospects.

Mixed sentiments | While general economic conditions are expected to improve, the sentiments expressed for the key indicators within sectors are mixed. In general, during the January to June 2013 period, businesses expect their sales performance to improve but their profits to deteriorate further relative to the first half of 2012. With respect to overall exports, businesses in six member countries expect an improvement in performance. St Vincent and the Grenadines, Anguilla, Grenada, Montserrat, St Kitts and Nevis and Saint Lucia are optimistic about their exporting prospects during the outlook period while businesses in Dominica expect exports to deteriorate. In Antigua and Barbuda businesses expect their exporting prospects to remain unchanged for the review period. Respondents indicated that they expect the cost of doing business in the ECCU to continue on an upward trajectory. With respect to construction activity performance, sentiments in Anguilla, Grenada, Montserrat and Saint Lucia are optimistic about the outlook period while businesses in Antigua and Barbuda and Dominica expect activity to remain unchanged for the review period. Businesses in St Vincent and the Grenadines expect construction activity to decline.

TRENDS IN BUSINESS SENTIMENTS & CREDIT | An analysis of business sentiments from January 2007 to June 2013 indicates that general business sentiments declined during the period 2007 to 2009, but have fluctuated thereafter. Positive sentiments were expressed for the January to June 2013 outlook period — the first time since January to June 2007.

The trend in sentiments expressed by respondents during the period from January to June 2007 to January to June 2013 reflects one of overall tightening in the terms and conditions for lending over the period with improvements seen in some periods. Sentiments were the lowest during the period July to December with an NPI -82.1 and although still negative, subsequently improved for three consecutive periods. Although the sentiments expressed are still one of overall tightening, an improvement has been seen for the last three survey periods i.e. January to June 2012 to January to June 2013.

The data was adopted from the ECCB.

Filed Under: Economy Tagged With: ECCU, Economy

BOJ issues 2 new CDs

June 12, 2013 by IC Insider.com

Jamaica’s Central bank has just announced the issue of two Special Variable Rate Certificates of Deposit targeted at Primary dealers to augment its liquidity management operations. The issues which are variable rate instruments are being offered from today Wednesday, 12 June 2013 and will be opened until to Tuesday, 18 June 2013. The instruments are:

A 183-day Certificate of Deposit, for a limited nominal amount of $3.0 billion. The instrument re-prices quarterly at 0.15 percentage point above the three month GOJ Treasury Bill rate existing at the start of each repricing period. The initial coupon for the first three months is 6.77 per cent per annum. This offer is extended to all Primary Dealers and commercial banks, from 12 June 2013 to 18 June 2013.
A 365-day Certificate of Deposit, for an unlimited amount. The instrument re-prices quarterly at 0.23 percentage point above the three month GOJ Treasury Bill rate existing at the start of each re-pricing period. The initial coupon for the first three months is 6.85 per cent per annum. This offer is extended to all Primary Dealers and commercial banks, from 12 June 2013 to 18 June 2013.

This is the second such issue in weeks as the most recent one closed last week Friday and seemed to have delivered a fair amount of foreign currency to the central bank.