Cayman’s Global Transactions Yield Higher Deficits in 2013
"The Cayman Islands' Balance of Payments (BOP) Report 2013 was released today."
The country’s Balance of Payments (BOP) Report 2013 which summarizes the country’s economic and financial transactions with the rest of the world was released today. Data from the Report is used by credit rating agencies, creditors and foreign investors as general indicators of the country’s sources of foreign exchange for servicing foreign debt and investments.
The BOP in 2013 consists of two major accounts - Current Account and Financial Account. The Current Account comprises of all transactions in goods and services, income and transfers. In 2013, the Current Account recorded a net deficit of $588.4 million (or 22.2% of GDP) compared to $532.8 million (20.6% of GDP) in 2012.
The Financial Account records the net changes in financial assets (direct investment, portfolio investment, financial derivatives and reserve assets) as well as liabilities. In 2013, Cayman recorded an excess of financial liabilities over financial assets amounting to $1.2 billion, an increase of $854.1 million over 2012.
⫿These results are not unexpected,??? stated the Minister for Finance and Economic Development, Hon. Marco Archer. ⫿As the local economy recovers, there is greater propensity for the rest of the world to lend to Cayman residents as shown in the Financial Account. This in turn leads to greater outflow of investment income as shown in the Current Account,??? he further explained.
Tags: Cayman⫪s Global Transactions, Higher Deficits in 2013, cayman eso, Cayman Islands' Balance of Payments