Major gains in Jamaica’s current account

There was major improvement in Jamaica’s current account deficit, provisional data for the June 2015 quarter show, relative to the similar quarter in 2014. The deficit came in at US$86 million, an improvement of US$185 million compared to US$271 million for the corresponding period in 2014.
For the March 2015 quarter, the Current Account enjoyed a surplus of US$39.4 million, an improvement of US$149.5 million over the similar period in 2014 as a result the current account for the year to June is negative US$45 million versus a deficit of US$398 million in the first half year in 2014.
The outturn for the June quarter reflected improvements on all sub-accounts except the Income sub-account which was almost unchanged. Net private and official capital inflows were, however, insufficient to finance the deficits on the current and capital accounts. As a result, there was a drawdown of US$177 million in the Net International Reserves of the Bank of Jamaica (BOJ).
There was a reduction of US$80 million in the deficit on the merchandise trade largely associated with a decline of US$133 million in imports and a reduction of US$53 million in exports. “The reduction in payments for imports mainly reflected lower expenditure for fuel and raw materials. Consumer and capital goods imports rose. The decline in exports mainly reflected lower earnings from non-traditional exports and sugar. Notwithstanding the overall fall in exports, there were higher earnings from alumina exports for the quarter” the BOJ report states.
Services enjoyed the increased surplus US$65 million, reflecting improvements in travel, transportation and other services. Regarding transportation, there was a decline in freight payments associated with the reduction in imports while the improvement in other services was due principally to reduced payments for insurance services. Within the current transfers sub-account, the increased surplus mainly reflected growth of 4.6 per cent in gross private remittance inflows. There was a marginal increase in the deficit on the income sub-account stemming primarily from a reduction in inflows associated with compensation of employees.