Jamaica’s Trade Deficit Narrows

Jamaica’s merchandise trade deficit fell by 13.4 per cent to US$2.9 billion for January to September 2015, when compared to the US$3.3 billion recorded over the similar period in 2014.

Co-Chair of the Economic Programme Oversight Committee (EPOC), Richard Byles, credited the improvement to the reduction in food imports and lower oil prices.

He said the decrease in food import is due to domestic agriculture and manufacturing becoming more competitive, despite the drought conditions.

Mr. Byles, who was addressing EPOC’s monthly press briefing at Sagicor’s head office in New Kingston on Tuesday (January 19), noted that a competitive exchange rate has also contributed to the reduction in the trade deficit.

“Lots of countries that used to export, say biscuit and beverages to Jamaica, find that Jamaican producers are far more competitive because of the exchange rate, because of the price of oil, and therefore the price of energy. That is what is helping to make our merchandise trade deficit better every quarter as we go along,” he said.

Mr. Byles, in the meantime, hailed the Government’s tight fiscal policy for the low inflation rate, which was recorded at 3.7 per cent for the 2015 calendar year, and 4.3 per cent for the fiscal year to date.

Data from the Statistical Institute of Jamaica (STATIN) shows that the inflation rate was 0.2 per cent for December 2015.

Mr. Byles said the figures are the lowest inflation rates Jamaica has experienced in 50 years. “The price of oil has (also) played an important role in bringing this inflation (down),” Mr. Byles said.

“When you look on the comparison between inflation for the calendar year and devaluation, it’s within range …so we have gained about 1.3 per cent competitiveness with the US currency,” he added.