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What Our Balance Of Payments Really Means

This is an informative publication, sponsored by The Fiji Sun, Fiji Bureau of Statistics and HFC Bank. All views expressed or implied are purely of the Treasurer at the HFC
11 Mar 2017 11:00
What Our Balance Of Payments Really Means
Peter Fuata.

This is an informative publication, sponsored by The Fiji Sun, Fiji Bureau of Statistics and HFC Bank. All views expressed or implied are purely of the Treasurer at the HFC Bank, Peter Fuata.

 

Fiji’s Balance of Payments (BOP) Statistics shows the value of Fiji’s transactions with the rest of the world in goods, services, primary income, secondary income and capital accounts.

It also shows changes in Fiji’s financial claims on (assets) and (liabilities) to the rest of the world.

Three accounts incorporate the BOP, these are the Current Account, Capital Account and Financial Account.

The Current and Capital account balance stood at a surplus of $40.4 million; and

Financial account balance stood at a deficit of $335.3 million.

The balance of current and capital account resulted in a surplus of $40.4 million in the September quarter of 2016 when compared to an $11.4 million a year earlier. This is due to a decrease in the following imports:

Mineral fuels

Transportation services

Investment income paid

And increase in personal transfers received.

The balance on financial account resulted in a deficit of $335.3 million in the September quarter of 2016, when compared to a $34.9 million a year earlier. This is due to an increase in the outflows of currency and deposits.

 

Current Account

Records the value of Fiji’s transactions with the rest of the world in goods, services, primary income and secondary income.

The current account balance is the sum of all current account credits less all current account debits. When the sum of debits is greater than the sum of credits we have a current account deficit.

The current account balance showed a net inflow of $38.8 million for the September quarter of 2016. The net inflow current account balance fell by 33.9 percent ($19.9 million) when compared to the June quarter of 2016. The net inflow current account balance rose by 273.1 percent ($28.4 million) when compared to the September quarter of 2015.

The balance on goods and services was a surplus of $53.2 million in the September quarter of 2016. This represents a rise by 392.6 percent ($42.4 million) when compared to the September quarter of 2015. Goods decreased by $71.3 million mainly due to the decrease in the import of mineral fuels. Services decreased by $28.9 million mainly due to the decrease in the import of transportation services provided. These contributed to the improved goods and services balances.

The balance on primary income was a deficit of $163.3 million in the September quarter of 2016. This represents a rise by 18.2 percent ($25.2 million) when compared to the September quarter of 2015 as a result of an increase in investment income paid abroad.

The balance on secondary income was a surplus of $148.9 million in the September quarter of 2016. This represents an increase of 8.1 percent ($11.2 million) when compared to the September quarter of 2015 due to an increase in personal transfers received.

 

Capital Account

Has two components – capital transfers and the acquisition or disposal of non-produced, non-financial assets. Capital transfers involve the transfer of ownership of fixed assets, or the transfer of funds linked to them, without any counterpart transaction.

The capital account balance showed a net inflow of $1.6 million for the September quarter of 2016. The net inflow capital account balance represents a fall by 33.3 percent ($0.8 million) when compared to the June quarter of 2016. The net inflow capital account balance rose by 60.0 percent ($0.6 million) when compared to the September quarter of 2015.

 

Financial Account

Records financial transactions involving Fiji claims on assets and liabilities to non-residents. The financial account is classified into assets and liabilities, which are broken down by type of investment (direct, portfolio, other investment and reserve assets) and instrument of investment.

The financial account balance showed a net burrowing of $335.3 million which consisted of net outflows of $183.7 million in equity and $151.6 million in debts for the September quarter of 2016. The financial account net burrowing rose by 860.7 percent ($300.4 million) when compared to the September quarter of 2015.

Direct investment showed a net outflow of $237.7 million in the September quarter of 2016. This represents a rise of 37.2 percent ($64.5 million) when compared to the September quarter of 2015.

Portfolio investment showed a net inflow of $35.4 million in the September quarter of 2016. This represents a fall of 3.8 percent ($1.4 million) when compared to the September quarter of 2015.

Other investment showed a net outflow of $65.5 million in the September quarter of 2016. This represents a fall of 198.2 percent ($132.2 million) when compared to the September quarter of 2015.

Reserve assets showed a net outflow of $67.5 million in the September quarter of 2016. This represents a decrease of 294.0 percent ($102.3 million) when compared to the September quarter of 2015.



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