McPherse ThompsonAssistant Business Editor

JAMAICA’S CURRENTaccount deficit is expectedto be about 6.8 per cent of

Gross Domestic Product (GDP)for fiscal year 2014-15, narrowerthan expected, at this stage of thefour-year economic support pro-gramme with the InternationalMonetary Fund (IMF), accord-ing to central bank GovernorBrian Wynter.

The narrowing of the currentaccount deficit has had an influ-ence on the foreign exchangemarket in that it has slowed thedepreciation of the Jamaicandollar vis-à-vis the UnitedStates dollar “and we expectthat as long as there is adequatesupply to meet the demand thatthat will continue,” he said.

However, Wynter said theseasonal demand in foreignexchange flows to stock up orbuy for the Christmas seasonwill become evident over thenext two months, and with thatthere could be a slowdown insupply.

However, he said the patternsthey have seen in the past havebeen disrupted by the change inpolicy. “The strong stance onthe fiscal side to a combinationof those policies with theexchange rate has changed thedynamic somewhat, as evi-denced by the current account,”he said.

Addressing the quarterlymonetary policy press briefingat the Bank of Jamaica’s down-

town Kingston offices onMonday, the Governor said,“I’m pleased to say that we arecertainly out of some of the dif-ficult times of a year or so agowhen we had much lowerreserves and did not have anyassurance that access to marketswere available to the Govern-ment or the central bank. That’scompletely changed.”

He added: “I am more confi-dent now than I was a year ago,much more confident in ourcapacity to withstand shocksthat could occur and continue

with the programme. So it’svery good news for those whoneed to make decisions toinvest. The capacity of the sys-tem to manage stability over thenext few years is much, muchbetter than it was a year ago.”

SUBSTANTIAL DEFICIT

According to the June 2014IMF country report on Jamaica,the current account deficitremains substantial but hasimproved sharply. The ongoingfiscal consolidation, weakdomestic demand, and an eight

per cent adjustment in the realexchange rate have all con-tributed to the external adjust-ment.

The current account deficitwas 9.5 percent of GDP in2013-14, a reduction of two per-centage points relative to theprevious year.

It said import compressionhas been the principal factor indriving the recent correction ofthe current account.

In the coming years, it said,increased domestic productionis expected to reduce reliance

on imports, and the currentaccount deficit should continueto adjust downwards.

The identified pipeline of for-eign direct investment inflows,attracted by improving confi-dence and competitiveness willhelp finance the current accountover the medium term, it added.

The report said policies toraise productivity and removeobstacles to investment andtrade will be essential to com-plement exchange rate adjust-ment in restoring external com-petitiveness and lowering thecurrent account deficit towardits longer-term equilibrium ofaround five per cent of GDP.

Responding to questionsabout the notion of reformfatigue, Wynter said alternativesto the current IMF programmewould be catastrophic.

“The path we are on is theright path. We need to focus onit, continue to pay attention tothe most vulnerable, but if weshrink from taking the steps thatwe have taken so far, from tak-ing the steps that we need totake going forward, we would,in a sense, have wasted theefforts and the sacrifices thathave been contributed by thestakeholders over the last twoyears,” the Governor said.

“That would be more than ashame. The fact that the pro-gramme has returned to growth,the fact that we have seenemployment gains, the fact thatwe have seen investments pickup, (and) I think we should notshrug off the significance of thebond issue in terms of what it istelling us from the internationalperspective. That has eased thepressures on the programmeconsiderably and has createdmore space and flexibility forJamaica,” he said.

mcpherse.thompson@gleanerjm.com

• www.jamaica-gleaner.com • gleanerjamaica • jamaicagleaner • BUSINESSC4 THE GLEANER, WEDNESDAY, AUGUST 27, 2014

FILE

A section of the port in Kingston.

91.7%

THIS WEEK’S

BIGNUMBER:

IMF-JamaicaCalendar

2014

SSeepptt 2222 Fifth test results and SDR

distribution

DDeecc 2222 Sixth test results and SDR

distribution

2015

MMaarr 2233 Seventh test results and SDR distribution

JJuunn 2222 Eighth test results and

SDR distribution

SSeepptt 2211 Ninth test results and SDR

distribution

DDeecc 2211 Tenth test results and SDR

distribution

2016

MMaarr 2211 Eleventh test results and

SDR distribution

JJuunn 2200 Twelfth test results and

SDR distribution

SSeepptt 2222 Thirteenth test results and

SDR distribution

DDeecc 2222 Fourteenth test results and

SDR distribution

Jamaica's adult literacy isestimated to have

increased from 47 per centin 1975 to 91.7 per cent in2013. Adult literacy rate isdefined as the percentageof the population, aged 15years and over, who canboth read and write with

understanding a short single statement on his/hereveryday life, according tothe Statistical Institute of

Jamaica.

Current account deficitnarrowing to 6.8% of GDP

Excelsior High SchoolRe-opening ScheduleAcademic Year 2014 – 2015

MondaySeptember 1 8:00 a.m Grade 10 Registration &

meeting with parents

TuesdaySeptember 2 8:00 a.m Grade 9 Registration &

meeting with parents

WednesdaySeptember 3 8:00 a.m Grade 8 Registration &

meeting with parents

ThursdaySeptember 4 8:00 a.m

Grades11 & 13

Registration &meeting with parents

FridaySeptember 5 8:00 a.m Grade 7 Registration &

Orientation

Monday,September 8 7:30 a.m.

Grades7-11 & 13

Regular Classes Begin