The port of Kingston.
Jamaica’s trade deficit narrows as imports decline amid export challenges
JAMAICA recorded a 3.4 per cent contraction in merchandise imports through October 2024 while weathering an 11.8 per cent export decline, according to new data from the Statistical Institute of Jamaica (Statin), signalling structural economic shifts amid global market turbulence.
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Jamaica’s trade deficit narrowed slightly to US$4.63 billion in the first 10 months of 2024, compared to us$4.65 billion during the same period in 2023, offering modest relief amid broader economic challenges. The narrowing was primarily driven by reduced import spending on raw materials and fuels rather than robust export growth.
The nation spent US$6.14 billion on imports from January to October 2024, down from US$6.35 billion in the same period last year. The decline was led by reduced purchases of raw materials and intermediate goods (-11.0 per cent) and fuels (-6.1 per cent), suggesting slower industrial activity and energy conservation efforts. Notably, imports of industrial supplies like inorganic chemicals fell by 12.6 per cent, while construction materials — including steel products — plummeted by 13.5 per cent.
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However, consumer spending remained resilient. Imports of household goods rose 3.3 per cent, driven by higher demand for food and beverages (+6.7 per cent) and non-durables like clothing (+1.1 per cent). Vehicle imports also edged up 1.9 per cent, reflecting sustained private consumption.
But the export sector struggles amid a falloff in re-exports. Total exports fell to US$1.51 billion, an 11.8 per cent year-over-year decline. The sharp 61.5 per cent drop in re-exports — goods imported and resold abroad — to US$158.4 million accounted for most of this slump. Statin attributed this to reduced transshipment activity, potentially linked to global supply chain adjustments.
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Domestic exports provided a silver lining, growing 4 per cent to US$1.35 billion. The mining sector led this growth, with alumina exports surging 26.3 per cent to US$499.6 million, offsetting a 17.5 per cent decline in bauxite shipments. In contrast, manufacturing exports dipped 3.4 per cent, led by an 8 per cent drop in refined petroleum products, while agriculture faltered 15 per cent due to weaker yam, coffee, and spice sales.
Geopolitical Shifts Reshape Trade Partnerships
The United States retained its position as Jamaica’s largest trading partner in 2024, but trade patterns revealed significant changes. Imports from Jamaica’s top five suppliers — the US, China, Brazil, Japan, and Colombia — declined by 5.1 per cent year-over-year to US$3.71 billion. This contraction was largely driven by a 9 per cent drop in imports from the US, which totaled US$2.36 billion. A reduction in fuel imports, down 8 per cent, was a key factor behind this decline.
On the export side, shipments to the US fell 12.6 per cent to US$613.9 million, reflecting weaker demand for Jamaican goods in its largest market. However, Russia emerged as Jamaica’s second-largest export destination, with shipments surging 25.2 per cent to US$147.3 million, fuelled by increased demand for crude materials. Iceland and the Netherlands also posted double-digit growth in imports from Jamaica, highlighting diversification in export markets.
Regionally, trade presented a mixed picture. Imports from the European Union (EU) rose 4.7 per cent, driven by increased purchases of machinery and food products, but exports to the EU dropped 16.5 per cent, reflecting reduced demand for Jamaican goods such as crude materials. In contrast, trade with Caricom countries weakened on both fronts: imports fell 8.1 per cent to US$345.4 million, while exports declined by 16.4 per cent to US$119.4 million due to a sharp reduction in fuel exports.
Sectoral Spotlight: Mining Boom vs Manufacturing Slump
Jamaica’s mining sector was a standout performer in 2024, with total revenue from mining and quarrying growing 18 per cent year-over-year to US$558.8 million. Alumina exports surged by 26.3 per cent to US$499.6 million, accounting for 37 per cent of domestic exports and offsetting a 17.5 per cent decline in bauxite shipments.
In contrast, manufacturing struggled, with export earnings falling 3.4 per cent to US$708.1 million. Refined petroleum products led the decline with an 8 per cent drop to US$345.6 million, while food and beverage exports dipped slightly by 0.7 per cent. Rum exports were particularly hard-hit, falling 16.9 per cent to $48 million, though other alcoholic beverages posted modest growth of 5.8 per cent.
The agricultural sector faced persistent challenges, with export earnings plunging 15.2 per cent to US$64.8 million due to declines across key commodities such as yams (-9.7 per cent), coffee (-35.4 per cent), and spices (-24.1 per cent). These declines were attributed to factors such as climate-related disruptions and increased competition in global markets.
