Back-to-school needs push up August remittances
Remittance inflows held above US$300 million in the month of August amid back-to-school demand.
Total remittance inflows topped US$307 million in August, up 13 per cent relative to the similar period in 2021.
“The increase in remittance inflows is partly attributable to greater flows to finance robust back-to-school expenses,” said the Bank of Jamaica, BOJ, in its monthly report on the remittance sector, which it regulates.
The improvement in flows rises to 16 per cent for net remittances, which takes outflows into account. Net remittances totalled US$290 million in August.
Remittances incorporate money transfers from relatives or acquaintances that are sent as gifts, but excludes transfers that pay for the provision of goods and services.
Remittance inflows climbed to record levels under the pandemic and vaulted above tourism as the dominant primary source of foreign exchange flows to Jamaica amid a shutdown and then a slow recovery of the travel and hospitality markets.
However, the money flows have begun to dip.
Over the period January to August, total remittances were estimated at US$2.27 billion, down from US$2.3 billion in the similar period in 2021 when transfers hit a historic high. For that year the inflows totalled US$3.5 billion.
The decline coincided with the general opening of the economy to travel, according to the BOJ. During the pandemic, the central bank had theorised that some of the new flows through the formal system related to a change in cross-border movements. With the lockdown of economies and most ports and the slow re-emergence of the travel market, relatives who normally would have delivered funds to their families in person on travel trips to the Jamaica, turned instead to the formal platforms for money transfers that the BOJ incorporates in its estimates.
June 2022 was the first month in which visitor arrivals to Jamaica surpassed pre-pandemic levels, according to travel data from the Pacific Airport Group, which operates the Sangster International and Norman Manley International airports.
In March, remittance flows suffered the first decline in eight quarters since the onset of the pandemic. The rest of the period recorded vacillations up to August. Jamaica receives the bulk of its remittances from the United States, United Kingdom, Canada and the Cayman Islands. These countries have significant numbers of migrant workers who send funds to family and friends in Jamaica.
The size of remittances are still tracking close to historic levels; however, the number of persons that say they receive remittances have fallen since the pandemic, according to pollster and Executive Chairman of Market Research Services Limited Don Anderson, who reaffirmed the finding again on Tuesday at the release of the latest JCC Business & Consumer Indices.
Anderson said that the number of survey respondents who say they receive remittances in 2022 fell to 25 per cent from 29 per cent in 2021, and 35 per cent in 2020. The high and low in the pre-pandemic years was 38 per cent in 2016 and 33 per cent in 2019.
“When you see a falloff in remittances and match that with price increases you can see that consumers have a greater pinch now than say two years ago,” Anderson said.
The reduction in remittances comes as most of the world grapples with high inflation. In Jamaica, annual inflation hit 11.8 per cent in April but has since fallen back to 9.3 per cent.