Jamaica’s current account deficit on the Balance of Payments narrowed by US$221 million to 12.6 per cent of Gross Domestic Product (GDP) in 2012/13.
The ratio was an improvement over the 13.7 per cent of GDP recorded in 2011/12.
“This is moving in the right direction as we move towards paying our way in the world instead of borrowing to meet our current demands,” said Minister of Finance and Planning, Dr. the Hon. Peter Phillips.
The Finance Minister was opening the 2013/14 Budget debate in the House of Representatives on Thursday, April 18, under the theme: ‘Restoring Hope – Expanding Opportunity’.
He informed that since January 2013, production and exports of alumina from Windalco’s plant at Ewarton have been returning to full capacity.
“On this basis, gross export earnings are slated to rise by US$65 million on an annualised basis. This will contribute to some improvement in the deficit in our balance of trade and current account deficit,” Dr. Phillips said.
He added that the significant impact of this turnaround at Ewarton demonstrates the critical importance of the recovery of the bauxite industry on the economy, and especially on the balance of payments.
He further noted that it is essential that the energy systems of the plants that are closed be transformed if the industry is to be made competitive.
He informed that Minister of Science, Technology, Energy and Mining, Hon. Phillip Paulwell, will address these issues in his presentation in the Budget Debate.
As it relates to the Net International Reserves (NIR), Dr. Phillips mentioned that for fiscal year 2012/13 the NIR closed at US$824.3 million with gross international reserves a little over US$1.7 billion.
Gross reserves represent the total amount of foreign currency resources at the disposal of the Bank of Jamaica.
Dr. Phillips explained that the deterioration in reserves during the year resulted from the absence of official inflows, due to the abandonment of the previous International Monetary Fund agreement in 2011.
By Latonya Linton, JIS Reporter