The Bank of Jamaica - File

Jamaica's balance of trade with its foreign partners continued to deteriorate into November, the central bank has reported, saying year to date, January to November 2006, the gap was US$59 million wider than the previous year.

The current account at the end of the 11-month period stood at $1.12 billion, compared to $1.06 billion in the matching period for 2005.

Export earnings were just over US$1.9 billion over the review period, but with merchandise imports at US$4.7 billion, the trade gap (exports less imports) was forced even further apart to a negative balance of US$2.74 billion.

That outturn represented a worsening of Jamaica's goods trade position by US$373 million relative to 2005.

"The deterioration on the goods account stemmed primarily from respective expansions of US$363.6 million and US$251.4 million in payments for fuel and machinery and transport equipment," said the central bank.

The import bill of US$426 million in the month of November 2006 was driven up by a 50 per cent increase in fuel, and a 20 per cent climb in capital equipment purchases.

But: "Partly offsetting the growth in imports was an expansion of US$18.3 million in earnings from non-traditional exports," said the Bank of Jamaica, "in particular waste and scrap metals, and ethanol."

The ethanol earnings would be from Petrojam Ethanol Limited's operation, which has through-put of 20 million gallons. The plant, which is co-ownedby Coimex of Brazil, dehydrates ethanol and exports the fuel grade product to the United States.

PEL recorded revenues of J$2.3 billion in 2005/06, and had projected an improvement to J$3.8 billion this fiscal year, April 2006 to March 2007.

Foreign exchange

Tourist traffic and transfers also boosted the country's foreign exchange earnings.

In fact the services account, which captures travel receipts, was up by US$4 million in the month of November year-on-year.

Year to date, however, it grew a strong US$180 million, or 36 per cent, to US$679 million.

"The higher surplus on the services account," said the central bank referring to the 11-month period, "was influenced by respective increases of 17.5 per cent and 15.1 per cent in stopover and cruise passenger arrivals. This was supported by an average increase of 6.2 per cent in the estimated daily expenditure per stopover and cruise visitor."

In fact travel receipts and private current transfers, the two largest earners, were each recorded at US$1.4 billion over January to November.

An increase of 11 per cent in net private remittance inflows was responsible for the growth in current transfers, said BoJ.

Overall, net official and private investment inflows recorded on the financial and capital accounts, were positive, resulting in a US$46.6 million build-up in the net international reserves for the month, and by US$265 million overall for the year.

The NIR stood at US$2.1 billion at January 2007

lavern.clarke@gleanerjm.com