Remittance flows rising steadily
Published:Friday | May 21, 2021 | 12:10 AMSteven Jackson - Senior Business Reporter
Remittance inflows to Jamaica for the first two months of this year were up nearly 30 per cent, outpacing the growth among some of its regional peers.
Inflows in January were estimated at $241 million, and were slightly lower at $235.9 million in February – totalling US$477 million in money transfers overall that mostly originated out of the United States, United Kingdom, Canada and the Cayman Islands, from where migrant workers send funds back home to family and friends in Jamaica.
Comparatively, in other remittance-dependent nations in the region, flows were up 22 per cent in Mexico, 17 per cent in El Salvador, and 13 per cent in Guatemala in February.
Remittance inflows to Jamaica grew by 32.7 per cent in January, and at a slower 27 per cent pace in February, but, historically, it’s more been the norm for inflows to grow by single digits. In 2019, for example, inflows for the month of January were up by just 0.5 per cent year-on-year, and 1.9 per cent in February, central bank data shows.
For calendar year 2020, remittance flows worldwide came under pressure, but were fairly resilient. Initially, the World Bank had predicted a 20 per cent decline in money transfers during the pandemic year, due to heavy job losses in source markets like the US. However, the fallout was only 1.6 per cent, and remittances even grew in some recipient countries, it said in a new remittance report.
“One of the reasons is the economic stimulus packages in the United States in response to the pandemic,” the World Bank report noted. “Another reason for the increase in the volume of remittances is the shift from informal to formal channels. Due to containment measures and cross-border restrictions, it was not possible to carry cash physically,” it said.
Jamaica was among the countries with rising remittances in 2020. Inflows climbed from US$2.4 billion to US$2.9 billion, equivalent to 21 per cent of GDP, according to central bank estimates. That’s up from 15 per cent of GDP in 2019, signalling that Jamaica became even more dependent on remittances in the year of the pandemic, the tourism market having been decimated and projected to contract by 70 per cent, but should rebalance as tourism recovers.
Of the US$236 million of remittance flows to Jamaica in February, 68 per cent originated from the US, 13.5 per cent from the UK, nine per cent from Canada, and nearly six per cent from the Cayman Islands. The breakout closely mimics that seen in January.