Steven Jackson, Business Reporter
Remittance inflows, Jamaica's major source of foreign exchange, inched up to a record US$1.2 billion (J$108 billion) for the first seven months of 2012 or 3.3 per cent higher than year earlier levels.
Remittances are now trending at US$5 million above pre-crisis levels in 2008 when it reached the previous record, Bank of Jamaica data indicates.
"This occurred notwithstanding continued economic downturn in Europe as well as a slower pace of growth in the United States," stated the July Remittance Report released this month by the BOJ.
Most of the remittance inflows originated from the United States at US$714 million or 59 per cent, followed by United Kingdom at US$192 million or 16 per cent, Canada at US$134 million or 11 per cent, and Cayman at US$74 million or six per cent.
Remittances avoided decline because of improved job security of the core senders, said Noel Greenland, vice-president of operations and marketing at Western Union.
"The type of jobs our consumers are engaged in are not as significantly affected by the recession. For example, nursing, education and so on. The affected job areas are primarily construction, auto, manufacturing, housing and finance," he said.
Greenland added that Jamaica sees mainly "non-discretionary" remittances, that is, money used for daily household and family expenses.
"Senders know that without these remittances, obligatory expenses will not be met," he said.
The bulk of the remittance inflow growth occurred in the first quarter. Transfers have slowed such that for the month of July alone inflows declined one per cent compared with July 2011. Despite the slower pace of July 2012 inflows, which amounted to US$168 million, the amount still trends above the five-year average.
"Remittance inflows continued to do well despite broadly unfavourable macroeconomic conditions in the source economies," noted the BOJ report.
In 2009, remittances fell to the extent that tourism retook the lead as the country's major earner of foreign exchange. However, in 2011, remittances reclaimed pole position as the country's major source of foreign exchange, earning US$2.02 billion compared with US$2.01 billion for tourism expenditure.
The next Remittance Report is expected to reflect whether the temporary closure of 14 Western Union branches in Montego Bay impacted inflows.
The 14 branches were closed for much of August as a control measure, widely reported as linked to the lottery scam perpetuated on overseas residents mainly from the western end of the island.
But GraceKennedy Group, which operates the franchise in Jamaica, never officially linked the closures to the lottery scam, which plagues St James.
The scam involves fraudsters convincing US residents to send money to clear winnings in a fictitious lottery jackpot.
Jamaican and US authorities claim that as much as US$200 million flows into Jamaica annually from the scam, which accounts for 10 per cent of total remittances.
Western Union subsequently imposed a US$400 limit on money transfers to and from St James.