Remittances recover, but still below 2008 levels

Published: Friday | February 18, 2011 Comments 0
Dennis Morrison
Dennis Morrison

Dennis Morrison, Columnist

With Jamaicans overseas topping up the 'Christmas money' sent home to relatives last December, remittance inflows to the island increased by 11.5 per cent for the month, pushing up the total for the 2010 year to over US$1.9 billion.

The figure for 2010 represented a 6.5 per cent increase over the US$1.79 billion received in 2009, a year when the global economic recession sent migrant remittances plunging.

As recession gripped the major northern metropolitan centres in the countries where Jamaicans reside, remittance inflows to the island fell by US$230 million in 2009 from US$2.02 billion in 2008, or by 11.4 per cent.

Inflows from the United States, the largest source of remittances to Jamaica and the Latin American region, were the main driver of the recovery, moving up by US$132.6 million, or by 13.6 per cent faster than the overall increase of US$115.9 million, or 6.5 per cent.

The lower rate of increase in the overall inflows was due to the continued slide in inflows from the United Kingdom to approximately US$332 million last year, a decline of US$48 million or 12.6 per cent from the US$380 million received in 2009. This was after a steep drop of US$127 million or 25.1 per cent in 2009.

Uk recovery lags

The contrasting situation regarding remittance inflows from these countries reflects the differences in economic per-formance: the recession ended earlier in the United States and the pace of recovery has been stronger than in the United Kingdom and, for that matter, in Europe (except Germany).

With the United Kingdom economy having contracted in the fourth quarter of 2010, the expectation is that the recovery will slow further in 2011, especially as the pressure from tax increases and expenditure cuts aimed at reducing fiscal deficits is felt.

So remittance inflows from this source are not likely to bounce back this year.

As with tourist arrivals, Canada remained a positive factor in remittance flows to Jamaica last year. These flows climbed to US$193.8 million, up from $179.8 million in 2009, an increase of US$14 million or 7.8 per cent.

In fact, inflows from Canada continued on an upward path throughout the recession worldwide, and grew by US$21 million or 13.2 per cent in 2009 when all other sources recorded declines, and global remittance flows went down by 6.7 per cent.

The resilience of inflows from Canada reflected the extent to which recession in that country was milder than in the rest of the advanced countries - the decline in economic activity was less, and was short-lived.

Other sources of remittances, of which the Cayman Islands is the single largest contributor accounting for around 40 per cent, recovered some ground in 2010 to reach US$270.7 million, up from US$254.8 million in 2009, an increase of US$15.9 million or 6.2 per cent.

The downturn in remittance inflows from these sources actually began in 2008, just as the recession was taking hold, with inflows falling to US$262.7 million from US$277.5 million in 2007. In 2009, they fell further by 3 per cent.

business@gleanerjm.com

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