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Jamaicans not saving enough, says Jarrett

Published:Friday | November 1, 2013 | 1:34 PM

The general manager of the Jamaica National Building Society, Earl Jarrett, believes Jamaicans are not saving enough and he thinks this is a big problem.



According to Jarrett, Jamaica has one of the lowest savings rates worldwide – the result of the generally limited access to financial services and the lack of a cultural emphasis on saving.



“Jamaica needs to urgently address the problem of its low savings rate,” Jarrett said yesterday at a function to mark International Savings Day.



“Many of the economic challenges facing the country are intimately related to this issue.”



Started in 1924 by the World Savings Banks Institute, World Savings Day is used to emphasise the relevance of saving, with a particular focus on developing countries where a large percentage of the public does not use the banks.



The Singapore-based EconomyWatch.com indicates that Jamaica’s Gross National Savings, as a percentage of its Gross Domestic Product (GDP) this year is 15.9 per cent. For Trinidad and Tobago the figure was 24.7 per cent, while for China it was 47.1 per cent.



The website estimated Jamaica’s GDP growth rate in 2013 at zero point six per cent, while for Trinidad and Tobago it is two per cent, and China, eight per cent.



“Jamaica’s low growth rate is directly tied to its low savings rate,” Jarrett said. “Savings is the key determinant of domestic investment, which underpins growth.”



He added: “Social pressures generally push individuals to spend when they should be saving. For our own good and for that of Jamaica, we need to reject this, and World Savings Day is a good point of departure.”



Economist Dr Dawn Elliott, an associate professor at the Texas Christian University has reported that three out of every four Jamaicans have limited access to safe and low-cost payment channels.



Her 2011 research showed that only 12 per cent of the population owned accounts which allow them to transfer money, write cheques or make credit card payments.



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