Repatriated funds hit five-year high at $72b
Companies operating in Jamaica repatriated US$568 million (J$72.7 billion) as investment income or dividends in the fiscal year ending March 2016, or the highest in five years, according to central bank data released this week.
It represented a 42 per cent annual increase in repatriated funds, according to the latest balance of payments (BOP) accounts released by the Bank of Jamaica (BOJ). The funds represented 4.1 per cent of the country's total output or gross domestic product, according to the report.
The outflow of funds was balanced by a big reduction in oil imports over the period, leading to a marked improvement in the balance of payments.
"This represents a continuation of the improvements observed in the last three fiscal years. The improved outturn emanated from all sub-accounts, except the primary income sub-account," said the central bank in statements accompanying the accounts. The figures on repatriated funds are found within the income sub-account of the BOP.
But the central bank also said the deficit on the primary income sub-account worsened by US$142.8 million. This was due primarily to a 24.2 per cent increase in interest payments to non-residents on GOJ global bonds and significant repatriation of profits by foreign firms, up by 42.5 per cent, the BOJ said.
Over the annual period ending March, Jamaica's total imports dipped by US$794 million to US$4.25 billion but was still nearly fourfold the size of total exports, which also shrank by US$209 million to US$1.2 billion. The reduction in imports was primarily driven by decreases in mineral fuel and chemical imports of US$742.9 million and US$63.2 million, respectively, said the BOJ.
The BOJ's gross reserves increased by US$166 million to US$2.89 billion at March 2016, sufficient to cover 23.5 weeks of projected goods and services imports.
In previous quarters, imports fell due to the increased pace of currency depreciation and its impact on the resale of imported goods. But also, since July, the price of oil dipped dramatically from roughly US$100 per barrel to hover around the US$50 mark.