Jamaica: Macro-Socio-Economic and Environmental Assessment of ...

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For its part, the rate of unemployment declined with respect to the previous year (15
percent and 13 percent for 2002 and 2003, respectively) due mainly to a decline in the
registered labour force rather than due to an increase in the number of employed. The
labour force fell from 1 124.4 to 1 098.8 thousands, while the employed labour force
remained at 954. The decomposition of labour force statistics by gender category shows
that the decrease in the labour force was particularly pronounced for females (506 and 488
thousands for 2002 and 2003). The female category also recorded the largest decrease in
the unemployment rate (11 percent and 10 percent for males; and 21 percent and 18 percent
for females for 2002 and 2003 respectively).
c) Evolution of the external sector
The global result of the balance of payments was negative, as the current account deficit (-
13.3 percent and -12.4 percent of GDP in 2002 and 2003, respectively) was not offset by
the surplus in the capital and financial account. As a result, the stock of net international
reserves declined (US$1 600 million in 2002 and US$1 169 million in 2003).
The trade balance worsened (20 percent and 26 percent of GDP in 2002 and 2003
respectively) as a result of the increase in the petroleum import bill (29 percent). This in
turn responded to the rise in the international price of oil, the exchange rate depreciation
and to the expansion of import demand for non-mineral products. The other categories of
imports, consumer good imports and capital goods registered a decline (-4 percent and –14
percent respectively) as a result of a fall in the demand for consumer durables due to the
introduction of the tax measure package in May –June and to a lower level of investment in
the Telecommunications sector.
Exports rose for the first time in three years consequent upon the performance of alumina
(12 percent) which represents 80 percent and 58 percent of total traditional and domestic
exports. The performance of other traditional exports was mixed as bananas and sugar
recorded positive growth (14percent) while coffee, rum and bauxite witnessed a
deteriorating performance (-10 percent, -12 percent and -19 percent, respectively).
The Services balance widened its surplus (US$271 and US$444 million in 2002 and 2003,
respectively) due to the expansion of tourist arrivals (13 percent.) This reflected favourable
external conditions and the efforts of the authorities to improve the competitiveness of the
sector. The most significant increase was recorded in the European market (0.2 percent and
29 percent in 2002 and 2003, respectively).
Remittances, which constitute one of the main sources of external finance and of foreign
exchange inflows, expanded (13 percent of GDP in 2002 and 17 percent of GDP in 2003).
This was in response to the expansion in the market share of financial institutions and to the
improved performance of the United States economy.
The capital account of the balance of payments registered a deficit (-US$17 million for
both 2002 and 2003) while the financial account narrowed its surplus in relation to the
previous year (US$1135 and US$1020 million in 2002 and 2003 respectively). The
reduction in the financial account’s surplus is explained mainly by the repayment of euro
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