Reforms having positive impact on economy, says BOJ boss

Bank of Jamaica (BOJ) governor Brian Wynter says Jamaica is set to record a single-digit current account deficit of the balance of payments, a feat that was last accomplished about 20 years ago.

"Jamaica has long lived beyond its means by spending much more overseas than it earns from overseas, and the gap in the difference shows up in the current account of the balance of payments. We grew accustomed to significant deficits, often close to or more than 10 per cent of GDP (gross domestic product)," he said at the BOJ quarterly press briefing held at the Hilton Hotel in Montego Bay yesterday.

"For the December 2016 quarter, however, the current account deficit of the balance of payments was a mere 0.3 per cent of GDP (US$38.1 million). That's half a percentage point of GDP (or US$77 million) better than the deficit for the December 2015 quarter."

FRUIT OF SACRIFICE

Wynter added, "Bank of Jamaica now estimates the current account deficit for fiscal year 2016-2017 at 1.8 per cent of GDP, which is below the 2.0 per cent of GDP deficit for the previous fiscal year. In fact, we have to go back about 20 years in Jamaica's history to find another deficit this low."

The BOJ governor attributes the positive turnaround in the current account to the continuous reforms in the economy.

He said, "Over the past few years, Jamaica has made the sacrifice by implementing difficult structural reforms, together with corrections in external price competitiveness. The improvements we are seeing in the current account are the fruit of that sacrifice."

The central bank boss also revealed that export of goods (mainly non-traditional) for the quarter jumped by nine per cent (US$26 million) for the first time in four years. Food exports rose by 26 per cent; earnings from tobacco and beverages (excluding rum) rose by 112 per cent, while an already strong tourism sector climbed a further 5.4 per cent on the back of 6.1 per cent improvement in stopover arrivals.