The net errors and omissions of T&T’s balance of payments returned to over US$2 billion in 2022 and 2023, following a dip during the period of the COVID-19 lockdown, according to information released by the Central Bank of T&T yesterday.
The Central Bank publication of a note on errors and omissions in T&T’s balance of payments came after economist Marla Dukharan published a report last week Wednesday, outlining that on average over US$2 billion “disappears” annually from this country in errors and omissions. She added that on a per capita basis, T&T is the world’s largest loser of foreign currency.
The Central Bank said the note is the first in a new series that aims to explain important concepts and monetary policy actions to a broad public audience in non-technical terms.
In its note, the Central Bank explained that the balance of payments is “a statistical statement that summarises financial transactions between residents of an economy and non-residents (or the rest of the world) during a period.”
The balance of payments comprises the current account, the capital account, the financial account and the overall balance. The net errors and omissions represent a balancing item in the balance of payments of a country, said the Central Bank.
T&T’s current account, which shows the flows of goods, services, primary income and secondary income between residents and non residents, in 2023, recorded a positive surplus on its current account of US$3.39 billion.
The Central Bank said the capital account transactions are “relatively small,” but the financial account, which shows transactions between residents and non residents that involve financial assets and liabilities, recorded a net outflow of US$1.60 billion.
“The overall balance represents the change in international reserves managed by the Central Bank over the period. In 2023, the change in international reserves was -US$736.1 million,” said the Central Bank.
The Bank also emphasised that in principle, the balance of payments must balance, meaning the overall balance must be equal to its components, the current, capital and financial accounts.
The Central Bank explained that its assembles data on the country’s balance of payments from primary sources, such as the Central Statistical Office, the Ministry of Energy and Customs. But it also collects data from surveys involving private and public institutions.
“As noted earlier, errors by reporting agencies, and more so incomplete coverage of transactions constitute the errors and omissions in the balance of payments,” said the Central Bank.
It said two issues in the sphere of incomplete coverage are: the measurement of travel expenses and the response rate of companies to the Central Bank’s survey requests being about 50 per cent.
It noted that errors and omissions were US$2.36 billion in 2023 and US$2.07 billion in 2022, but only US$90.5 million and US$132.6 million in 2021 and 2020 respectively. In 2019, errors and omissions totalled US$1.10 billion.
