Deficit

Better fiscal out turn to February

April 4, 2014 by IC Insider.com

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.

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

Early trade gains wiped out

April 4, 2014 by IC Insider.com

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.

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

BOJ suggests FX stability close

March 16, 2014 by IC Insider.com

Bank of Jamaica, in an unusual weekend press release, indicated that positive trends in the economy and increased flows of foreign exchange in March over the first two months of the year will provide an increasingly solid base for improved stability in the foreign exchange market.

“Since the beginning of March 2014, the exchange rate has depreciated by J$0.93 (0.85%) against the US dollar. This movement over the two-week period compares to a J$0.49 (0.45%) depreciation over the previous two weeks. The faster pace of depreciation has occurred despite increased supply in the foreign exchange market, where volumes from earners for the month to date, are higher than for January and February 2014.” the central bank stated in a release this evening.

“Jamaica’s main economic indicators continue to improve with economic growth resumed in the September quarter and is expected to strengthen over the subsequent six months in the range of 1.0 per cent to 2.0 per cent. Preliminary estimates of the balance of payments indicate that the current account deficit was reduced sharply over the period April 2013 to September 2013, by approximately US$350.0 million. The current level of net international reserves (NIR) is US$1,121.4 million, increasing by US$52.0 million since the end of February 2014. Bank of Jamaica now expects to comfortably meet the NIR target under the International Monetary Fund agreement for the March 2014 quarter. Finally, headline inflation was lower than projected at 0.5 per cent for the month of January and the fiscal year to March 2014 is now likely to fall close to or below the bottom of the 8.5 per cent to 10.5 per cent target range. The BOJ stated that against the background of recent movements in the exchange rate, they wish to assure the public that it stands ready to provide support to prevent disorderly conditions from emerging in the foreign exchange market.” the release concluded.

Filed Under: Breaking News, Economy Tagged With: BOJ, Deficit, Economy, FX Market, GOJ

Jamaica’s trade deficit improves

March 3, 2014 by IC Insider.com

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Jamaica’s trade deficit improvement experienced a recovery in the year to November 2013 as both imports, which fell by US$392 million and exports, down by US$112 million, resulted in the deficit falling by 6.2 percent or US$289 million when compared to the similar period in 2012.

Overall, imports for the 11 month period in 2013 was US$5,664 million, down from US$6,056 million for the same period in 2012 and exports of US$1,442 million, resulted in a trade deficit of US$4,221 million as reported by the Statistical Institute of Jamaica (STATIN).

Imports | Freezone activity accounted for US$295 million in imports, compared to US$352 million in the corresponding 2012 period. The category of Mineral Fuels, which accounts for 35 percent of the country’s import bill, fell by US$229 million to US$1,984 million compared to the same period of 2012. Machinery and Transport Equipment fell by US$20 million to US$831 million. Chemicals imports was valued at US$741 million, a decrease of US$80 million. Manufactured Goods fell by US$41 million or 7.1 percent to US$544 million. Spending on Food, however, rose by US$12 million to US$888 million as a result of the sharp rise in the price of basic commodities.

Traditional Exports | For the period of January to November 2013, the country earned US$724 million from traditional domestic exports which fell by 2.9 percent or US$22 million versus 2012 period largely due to the decline in Manufacturing exports. Non-traditional domestic exports fell by US$104 million or 13.9 percent to US$643 million compared with the first eleven months of 2012.

Trade with USA improves | The value of imports from the United States of America, a major trading partner, fell by US$145 million or 7 percent to US$1,940 million to November 2013 compared to the similar period in 2012. Merchandise exports sold to the USA fell by US$19 million to US$711 million resulting in the trade deficit of US$1,229 million, down from US$1,355 million for the similar 2012 period, a decline of US$126.5 million.

Trade with CARICOM worsens | Goods imported by Jamaica from the CARICOM region from January to November 2013 grew by US$4.5 million to US$822 million, due largely to increased expenditure on “Food” which increased by US$13 million to US$151 million. Total exports fell by 20 percent or US$15 million to US$63 million.

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

GOJ deficit up in January

February 28, 2014 by IC Insider.com

Government spent more in January than originally budgeted and collected less than projected to wipe out the projected $761 surplus originally budgeted, ending up with a deficit for the month of $3.274 billion. At the end of January, the year-to-date deficit is at $22.9 billion, just $2.65 billion less than the amount budgeted.

The revenue for the month was short of the $31.37 billion budgeted by $820 million. Capital expenditure exceeds the budget of $3.53 billion in the month by $1.45 billion coming in at $4.98 billion. However, capital expenditure is still running $7.6 billion below budget for the year to January.

The budget projected a shortfall of $2 billion in February and $19.5 billion surplus in March. The latter is in keeping with historical pattern with the last month of the fiscal years realizing a surpluses. If the budget is achieved for the remaining two months of the fiscal year, the fiscal deficit will come close to being wiped out and would have been reduced from $54.6 billion.

For the 10 months to January, tax revenues fell short by $13.2 billion and non-tax was below budget by $3.6 billion and recurrent expenditure was down $14.4 billion from budget. Interest cost was lower by $3.9 billion and other recurrence expenditure by $6.8 billion.

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

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

Trade deficit gains eroded

February 5, 2014 by IC Insider.com

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

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

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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