JA’s current account deficit down 80%
Jamaica’s current account deficit continued to remain significantly below last year with the lastest figures released by the Bank of Jamaica (BOJ) showing that the deficit for the period January to August 2009 was US$1,647.3 million, or 80 per cent lower than the comparative period last year.
An improvement in the merchandise trade deficit was the main source of the reduction, stemming primarily from a decline of US$1,794.5 million, or 66.7 per cent in the value of mineral fuel imports.
All the other categories of imports, with the exception of miscellaneous commodities, also declined. The impact of the contraction in imports on the merchandise trade deficit was partly offset by lower earnings from major traditional exports, particularly alumina, as well as non-traditional exports, mainly ethanol.
For the review period, there was also an improvement in the services sub-accounts.
The increase in the surplus on the services sub-account resulted from a fall in freight charges as well as a decline in insurance payments, related to the reduction in the value of imports. Earnings from travel also increased, albeit marginally.
The impact of the improvement in the merchandise trade and services sub-accounts on the current account deficit was, however, partly offset by an increase in the deficit on the income sub-account, as well as lower net current transfers.
The deterioration in the income account was principally related to a contraction in inflows associated with compensation to employees.
The decline in current transfers reflected a contraction of 14.6 per cent in gross remittance inflows.