Sabrina N. Gordon, Business Reporter

Sugar exports helped to boost Jamaica's current accounts in July. - File

Jamaica's balance of payments showed marked improvement in the month of July, the central bank is reporting, largely from commodities exports that contributed to gains of US$54.9 million that cut down the current account deficit to US$89 million.

Last year July, the deficit was recorded at US$143 million.

The improvement in the current period was due mainly to strong growth in exports, which increased by US$57.8 million, reflecting expanded earnings from alumina and sugar, which accounted for approximately US$38.5 million and US$13.1 million, respectively.

Merchandise imports were marginally higher, with their containment largely influenced by a US$30.2-million contraction in fuel imports.

Services remained in surplus, but growth was also minimal, and was mostly attributed to an increase of 8.6 per cent in total stopover tourists.

US$4.1-million increase

Travel services for the month grew to US$188 million, a US$4.1- million increase when compared to the corresponding period for 2006.

Partly offsetting the increase on the current account was an expanded deficit of US$32.4 million on the income account, mainly on investment flows which declined by US$30.6 million because of higher debt servicing or interest payments on official external debt, as well as bigger profit remittances to foreign parents by companies operational here.

On the flip side, remittances grew US$20 million in the month to top $1.02 billion for the first seven months of the calendar year.

Within that wider period, the central bank also reported that the current account deficit performed worse than the first seven months of 2006, growing by US$122.4 million to US$760.2 million.

A decline was recorded on all sub-balances in the current account except for remittances and other current transfers, which grew a combined US$118.3 million over the review period.

An increase in the value of imports over exports brought about a deficit in the goods balance to US$9.5 million. This increase the central bank attributed to higher spending on machinery and transport equipment and miscellaneous manufactured goods.

"The impact of the expansion in imports was almost offset by increased earnings from major traditional and non-traditional exports, particularly alumina, mineral fuels and scrap metals," the Bank of Jamaica said.

All areas of services recorded a decline bringing the balance to US$90.2 with the deterioration in the income account amounting to US$141.1 million in an outflow of company profits.

The net increase in the transfer account reflected growth of 10.5 per cent in gross private inflows for the period January to July.

For the seven-month period the capital and financial account reflected surplus amounting to US$122.4 million when compared to the similar period for 2006.

The net international reserves (NIR) reflected a decline of US$171.4 million due to insufficient inflows to finance the deficit incurred on the current and capital accounts.

The NIR has since fallen below US$1.9 billion.

sabrina.gordon@gleanerjm.com