May 2008 Financial News

Jamaicans remitting more money from the US

May 21, 2008

Remittance inflows from the United States to Jamaica grew almost 12 per cent for the first quarter of the fiscal year, so far defying expectations that private cross-border money flows would have taken a cue from the sluggish US economy and hit a downturn.

Minister without portfolio in the Ministry of Finance, Senator Don Wehby, who announced the in-crease, said remittances for the first quarter totalled US$498.6 million.

"That's about an 11.8 per cent increase over the previous year," Wehby said at an investor's forum hosted by the brokerage house, Mayberry Investments Limited.

Last year, remittances to Jamaica topped US$1.9 billion, which, according to the Planning Institute of Jamaica, was an 11 per cent increase over 2006.

But with the US economy largely flat, the remittance and tourism sectors were expected to be the most heavily impacted.

GDP growth target

Indeed, the Bank of Jamaica said this month that if a recession were to hit the US, the pass-through effect would be felt largely in those two sectors, and could potentially erode 0.4 per cent from the three per cent GDP growth target for the fiscal year.

But tourism, coming out of the peak winter season which ended in April, has reported improved numbers.

And fiscal manager Wehby also has current remittance numbers before him that so far defy any indication of a downturn.

Wehby said he was not surprised that remittance inflows into Jamaica had actually increased.

"... Because if you look at the average size of a remittance coming into this country, which is about US$250 to US$300, and when you even look behind that number, about 80-90 per cent is used for consumption," he said.

"Jamaicans living overseas see this as an obligation to ensure that their families can meet their basic needs."


Source:
John Myers Jr, Business Reporter
john.myers@gleanerjm.com
Jamaica Gleaner
Wednesday May 21, 2008

http://www.jamaica-gleaner.com/gleaner/20080521/business/business6.html