Remittances up, but barely

October 22, 2013 by

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.

Related posts | Remittances dip in June | Sharp increase in May Remittances

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Jamaica’s inflation jumps

October 17, 2013 by

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.

dollar_sign2_280x150The 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.

Related posts | August inflation increase moderate | Inflation continues moderation

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Credit expansion slows in T&T

October 14, 2013 by

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.

T&TFlagExcess 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.

Related posts | T&T economy growing | T&T Inflation picks up | IMF predicts 1.5% growth for T&T

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T&T Inflation picks up

October 10, 2013 by

Latest available data from the T&T Central Statistical Office showed that, on a year-on-year basis, inflation rose to 5.1 per cent in August 2013 from 3.8 per cent in July 2013, and 7.9 per cent one year earlier.

This was mainly due to a rise in food inflation, which increased to 7.7 per cent in August 2013 from a low of 4.8 per cent in the previous month. Core inflation inched slightly upwards but remains stable at a little over 3.0 per cent in August 2013. While core inflation demonstrated a slight uptick in August 2013, underlying inflationary pressures still remain well contained.

Related Posts | T&T economy growing

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T&T economy growing

October 9, 2013 by

As reported by the Central Bank of the twin island state of Trinidad & Tobago, real GDP and economic activity is estimated to have expanded at an average rate of 1.7 per cent (year-on-year) for four successive quarters to June 2013, compared with a contraction that averaged 1.6 per cent in the preceding four quarters.

“The turnaround was driven by the non-energy sector where output rose at an average pace of nearly 2 ½ per cent in the four quarters to end-June 2013. The energy sector expanded at a much slower average rate of 0.7 per cent (year-on-year) in the period, as intensified maintenance work and security upgrades posed a severe drag on the sector’s performance.

T&T_CoatofArms-black280X150The central bank went on to state that, “There are encouraging signs that the domestic economy appears to be on a path of recovery, as evidenced by four consecutive quarters of slow but steady year-on-year growth from July 2012 to June 2013. Growth has been mainly driven by the non-energy sector and this trend is expected to continue into the second half of 2013 as the planned maintenance of gas and downstream plants, which began in September 2013, is likely to impact the performance of the energy sector.”

The central bankers expressed concern, about the eight successive months of decline in business lending to July 2013 and elevated liquidity levels, both of which reflect continued caution on the part of the private sector. Against this backdrop, the Central Bank views the present accommodative monetary policy stance as appropriate to support the ongoing recovery and has decided to maintain the ‘Repo’ rate at 2.75 per cent.

The Central Bank said it will continue to nurture financial conditions supportive of the recovery, while keeping economic and monetary conditions under close review in the coming months.

Related posts | IMF predicts 1.5% growth for T&T

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NIR up in September

October 9, 2013 by

The Jamaican dollar has been undergoing a depreciation since May after a brief revaluation but the net international reserves actually climbed at the end of September compared with August of this year.

Net International Reserves at the end of September amounted to US$910 million, up $28.54 million over the August figure of US$881.6 million. It is not clear where the increase came from. The central bank is projecting that the NIR will remain around these levels until year end.

The reserves translate to 14.96 weeks of Goods Imports and 11.22 weeks of Goods & Services Imports at the end of August and for September was 15.10 weeks and 11.4 weeks respectively.

Related posts | NIR down but so is IMF debt | NIR surpasses $1 billion

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Big gains in Ghana Stocks

October 6, 2013 by

The Ghana Stock Market is up 68 percent for the year to the end of September, even as interest rates were raised from 11 percent to 21 percent on T-bills in response to depreciation of the local currency. The increase in T-bill rates took effect last year and for most of 2013.

Ghana’s economy grew by 7.9 percent last year and is projected to grow 7 percent in 2013, this according to the statement made by the International Monetary Fund  on Wednesday. Notwithstanding the forecast for strong growth, the funding agency said, “It will be difficult for Ghana to keep its budget deficit below 10 percent this year.” However, the government says its deficit will fall to 9 percent this year from 12.1 percent in 2012.

Bank_Ghana150x150One key risk for the economy of Ghana, an exporter of cocoa, gold and oil, is its current account deficit, which will rise to 13 percent of gross domestic product this year, the IMF said.

Headline inflation stayed within the target range of 8.5 per cent ± 2 per cent in 2012 but has climbed to 11.5 percent in August this year. Monetary policy faced a major challenge of dealing with a rapidly depreciating currency in the first half of 2012. Monetary policy was tightened thus moving rates from 11 percent to 21 percent on Treasury Bills. The exchange rate slipped from 1.64 cedi to the US dollar to 2 cedi to the US dollar.

GhanaStocksIt against this background that several stocks listed on the Ghana Stock Exchange recorded sharp gains with 7 gaining more than 100 percent with the star performer being PZ Cussons, a company that manufactures and distributes soaps and electricals, rising 400 percent and Enterprise Group, a business development and management consultancy company, rising by 298 percent.

See chart for the listed stocks and their gains.

Related posts | Republic ups stake in Ghanaian Bank | LASCO Manufacturing profits in the future | Ghana Stock Exchange rated best performing in Africa

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Economy declined 0.1% in Q2

October 5, 2013 by

The Statistical Institute of Jamaica (STATIN) is reporting that the Jamaican economy recorded a mild decline in the second quarter of this year, a big improvement over the decline suffered in the first quarter and down on the estimates put out by Bank of Jamaica and the Planning Institute of Jamaica earlier.

Total value added at constant prices for the Jamaican economy declined by 0.1 per cent in the second quarter of 2013 when compared to the similar quarter of 2012. This resulted from a 0.6 per cent decrease in output of the Goods Producing industries as the Services industries remained relatively unchanged. Total value added at constant prices for the Jamaican economy declined by 1.3 per cent in the first quarter of 2013 when compared to the similar quarter of 2012.

Image courtesy of koko-tewan/FreeDigitalPhotos.net

Image courtesy of koko-tewan/FreeDigitalPhotos.net

Within the Goods Producing Industries, the 9.4 per cent increase in the output of Mining & Quarrying and 1.9 per cent increase in Construction output were not sufficient to offset the decline in Agriculture, Forestry & Fishery of 6.6 per cent and Manufacture of 0.1 per cent.

Within the Services industries, increased output was recorded for Hotels & Restaurants (0.6 per cent), Finance & Insurance Services (0.7 per cent) and Real Estate, Renting & Business Activities (0.2 per cent). Industries that experienced lower levels of output were: Electricity & Water Supply (-2.0 per cent); while Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment, Transport, Storage & Communication and Producers of Government Services all declined by 0.2 per cent. However, Other Services remained relatively unchanged during the period.

When compared with the first quarter of 2013 the economy improved by 1.5 per cent. Both the Goods Producing and Services industries recorded higher levels of output. The Goods Producing industries increased by 1.7 per cent while the Services industries increased by 1.5 per cent.

Related posts | BOJ: Economy likely declined in Q2 | Mining & Agriculture dent GDP badly

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Non-Traditional exports up

October 4, 2013 by

Jamaica’s Non-Traditional Exports earnings continue to record growth for the first six months this year over the similar period in 2012. Earnings from the segment rose by US$28 million or 7.8 percent to US$387 million. “Other” non-traditional domestic exports rose by 17.4 per cent to earn US$283.9 million. This was due to the significant increase in “Chemicals (incl. Ethanol)” of US$65.8 million, which recorded a value of US$96.5 million. “Food” increased by 0.8 percent to earn US$71.8 million.

Jamaica imported US$129.6 million less goods for the first six months of 2013 than for the similar period last year, while exports remained fairly flat resulting in an improvement in the large trade deficit the country has had for several years. During the 2013 period the merchandise trade deficit fell to US$2,257 million from US$2,386 million in the 2012, a decline of 5.4 percent. The movement is in the right direction but will need to undergo further substantial change during the life of the IMF agreement.

Image courtesy of Sommai/FreeDigitalPhotos.net

Image courtesy of Sommai/FreeDigitalPhotos.net

Exports | Total exports during the six months to June 2013 were US$852 million, virtually the same amount as in 2012. Earnings from total traditional exports accounted for US$429 million, down from US$459 million in the comparable period of 2012, a US$30 million decrease or 6.6 percent. The decline is due to a fall in the “Manufacture” group. Earnings from this group accounted for US$80.9 million or 18.9 percent of total traditional exports during the first six months of 2013, a fall of US$43 million or 34.8 percent. Despite the overall decline in the exports of major traditional domestic exports, the “Agriculture” group increased earning by US$14.5 million, when compared to the US$11.2 million in the 2012 period. This was due largely to higher exports of ‘Coffee’ which rose from US$8.2 million to US$10.9 million in the 2013. ‘Citrus’ moved from US$1.5 million in the 2012 period to US$3 million in the current 2013 review period. “Mining and Quarrying” earned US$333 million during the first half of 2013, up from US$324 million in the 2012 period.

Imports | Imports during the first six months was US$3,109 million, down from US$3,239 million in the comparable 2012 review period. The Jamaica Free Zone accounted for US$237 million of imports in 2013. The major commodities imported were “Mineral Fuels, etcetera”, “Food”, and “Chemicals”, “Machinery & Transport Equipment”, “Manufactured Goods” and “Miscellaneous Manufactured Articles”. “Mineral Fuels, etcetera” accounted for 35.9 percent of imports as spending on this commodity fell by US$218 million or 16.3 percent.  Expenditure on “Machinery and Transport Equipment” decreased by US$3.4 million to US$439.5 million for this period. “Manufactured Goods” declined to US$285 million, a fall of US$26 million. Lower imports of ‘manufactures of metal’, ‘non-metallic mineral manufactures’ and ‘paper, paperboards & articles of paper pulp’ were the reasons for this decline.

CARICOM trade imbalance | Imports from CARICOM during the first six months of this calendar year, was US$432 million representing 13.9 percent of total imports from the rest of the world. Imports decreased by US$105 million or 19.5 percent, below the US$537 million for the January to June 2012 period. Contributors to the downward movement in imports were: “Mineral Fuels, etcetera” falling by 28.5 percent or US$115 million to US$288 million. “Manufactured Goods” fell by 9.8 percent to US$11.3 million while “Chemicals” moved from US$15.4 million to US$13.9 million in the current 2013 review period. “Food” valued at US$86 million was up from US$75 million an increase of US$11 million or 13.6 percent. Other major imports namely “Beverages & Tobacco” and “Misc. Manufactured Articles” moved up and were valued at US$20 million and US$7 million respectively.

Total exports to CARICOM were valued at a mere US$33 million for the January to June 2013 period, down from US$35 million in the 2012 period.  Domestic exports amounted to US$28 million, down from US$30 million in the 2012 period. “Chemicals” was valued at US$3 million, down from US$6.5 million recorded in the similar 2012 period. Earnings from “Food” increases was valued at US$16 million, up from the US$15.4 million exported in the corresponding 2012 review period. “Beverages & Tobacco” had a positive impact on the growth in exports and was valued at US$5.2 million compared to the US$4.8 million recorded in the similar 2012 review period. For the period under review, Jamaica incurred a trade deficit of US$399 million with CARICOM. When compared to the US$501 million deficit recorded for the 2012 period, the trade deficit narrowed by US$102.4 million or 20.4 percent.

Related posts | Trades deficits narrows to May

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Producer prices tamed in August

October 4, 2013 by

Data out from the Statistical Institute of Jamaica (STATIN) indicates that the inflationary pressures in the goods producing sector has been moderate during August this year.

According to the government body charged with responsibility to collect and collate data on the country, the Producer Price Index for the Mining & Quarrying industry increased by 0.2 percent for August. This was due to the upward movement of 0.2 percent in the index for the major group ‘Bauxite Mining & Alumina Processing’. Producer prices for the Manufacturing industry increased by 0.4 percent the result of the movement in the major groups, ‘Food, Beverages & Tobacco’ and ‘Refined Petroleum Products’ that showed increases of 0.2 percent and 3.0 percent respectively. However the index for the major groups ‘Chemicals and Chemical Products’ showed a decline of 5.0 percent.

The point to point period, August 2012 to August 2013 showed movement in the index for the Mining & Quarrying industry of 13.6 percent, a decline of 0.3 percentage point below the 13.9 percent recorded for the previous period. Additionally the point to point for Manufacturing recorded an increase of 8.2 percent. This increase resulted from advances of 8.0 percent and 9.7 percent for the two most influential major groups namely ‘Food, Beverages & Tobacco’ and ‘Refined Petroleum Products’.

For April 2013 to August 2013, the index for Mining & Quarrying industry advanced by 2.1 percent, while the Manufacturing industry increased by 1.5 percent for the corresponding period.

Related posts | BOJ: Economy likely declined in Q2

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