BOJ Reports Increased Remittance Inflows

KINGSTON — The Bank of Jamaica (BOJ), in its latest report on remittances, said that during the month of August, total remittance inflows were US$174.6 million, an improvement of US$17.8 million or 11.4 per cent over the corresponding period last year.

Net remittances for the month, after accounting for outflows, were US$148.9 million, which represented an improvement of US$15.0 million or 11.2 per cent relative to the corresponding period of 2010.

The BOJ attributed the growth in net remittances largely “to typical seasonal increase in demand for funds to finance back-to school purchases prior to the start of the new school year." There were increases of US$14.6 million and US$3.2 million, respectively, for the “Remittance Companies” and “Other Remittances” sub-categories.

Meanwhile, for the first eight months of 2011, net remittances were US$1.1 billion, which represented an increase of US$78.7 million or 7.3 per cent relative to the corresponding period of 2010.

For the period, the BOJ reported that total remittance inflows were over US$1.3 billion, representing an increase of US$87.9 million or 7.1 per cent. The increase in total remittance inflows emanated from improvements in inflows to both the Remittance Companies, and the Other Remittances sub-categories.

Remittance Companies recorded an increase of US$73.6 million or 7.0 per cent, while Other Remittances had an increase of US$14.3 million or 7.6 per cent compared to the corresponding period in 2010. For the eight-month period, increases in outflows of US$9.2 million, partially offset the positive growth in net remittances.

The report stated that although marginally better than the corresponding period in 2010, the inflows of US$1.3 million were still below the pre-crisis (global financial meltdown of 2008) trend. It noted that a continued improvement in remittance inflows in “ensuing months is juxtaposed on the improving macroeconomic conditions in source economies."

For the first five months of the 2011/12 fiscal year, net remittances were US$738.2 million, which represented an increase of US$58.6 million or 8.6 per cent relative to the corresponding period of the previous fiscal year. This resulted from an increase in gross inflows though partially offset by increases in remittance outflows.

For that period, total remittance inflows were US$852.8 million, representing an increase of US$60.6 million or 7.6 per cent over the corresponding period of the preceding fiscal year.

The growth in total remittance inflows emanated from increases of US$51.7 million or 7.7 per cent by Remittance Companies and US$8.9 million or 7.3 per cent by  Other Remittances.

Remittances represent a significant source of national income. According to the Inter American Development Bank's Multilateral Investment Fund (IDB-MIF) in Latin America and the Caribbean, remittances play an important role in the economy of the region, totaling over US$66.5 billion in 2007, with about 75 per cent originating in the United States.

The IDB-MIF research revealed that total remittance represent more than the sum of foreign direct investment and official development aid combined. In seven Latin American and Caribbean countries, remittances account for more than 10 per cent of GDP and exceed the dollar flows of the largest export product in almost every country in the region.

The IDB-MIF has been the leading agency on regional remittance research.

By Allan Brooks, JIS Senior Reporter