Remittance inflows to Jamaica for the first half of 2023 are marginally behind intakes for 2022 with $1.64 billion being taken in, 0.3 percent less than for the same period in 2022, with June slipping 0.7 percent to $286 million below the $288 million collected for June last year.
The data for the half year suggests that the total of US$3.44 billion collected in 2022 is likely to be within reach this year if the current trend continues. In 2019 gross remittance inflows were $2.4 billion, which is a billion dollars less than was collected in 2022.
According to the Bank of Jamaica, the entity that compiles the data, remittances from the USA account for 69.8 percent of total flows, down from 70.7 percent in June 2022. Other source countries with a notable share are Canada at 10.5 percent, followed by the UK and the Cayman Islands at 10.0 percent and 5.8 percent, respectively.
Remittances tracking 2022 inflows
Jamaica’ NIR jumps to record high
Jamaica’s net international reserves continue to scale new heights closing at the end of August 2023 jumped US$299 million to a record month end balance of US$4.43 billion, up from US$4.13 billion at the end of July.
The main factor driving the reserve is a reduction of amounts due to the International Monetary Fund (IMF) of $362 million moving the figure from US$508 million in short term debt down to US$146 million at the end of August.
At the end of December last year, the reserves stood at US$3.978 billion and have climbed US$456 million for the year to date.
Tourism recovery continues for Jamaica
The recovery of tourist traffic to Jamaica from the closure of the industry in 2020, continues robustly with early data showing Montego Bay enjoying a 15.5 percent bounce in passenger movements through the Sangster International Airport, with 469,700 passenger passing through that airport in August this year, compared with 405,800 in 2022 with a 24.4 percent jump for the year to date to 3.64 million, up from 2,925 in 2022 for the same period.
Traffic in August for Kingston was up just 6 percent to 195,600 compared with 184,600 in 2022 and is up 21.7 percent to 1.207 million from 991,700 in 2022. Data was taken from the release of traffic for the various airports operated by Grupo Aeroportuario Del Pacifico, who are operators of both Jamaican Airports.
Traffic to Jamaica is up 15 percent over 2019, the last full year with no disruption with some 406,993 passengers passing through the Sangster Airport while Kingston is 5.4 down on the 205,860 passengers in 2019. Sangster’s, with 3.41 million passing through the airport just under 7 percent ahead of 2019 and the 1.33 million traversing the Kingston down 9 percent below the 2019 numbers.
Passenger movements represent incoming and outgoing passengers, roughly half represent incoming, with those passing through Sangster’s representing the majority of visitors to the island as such it provides a good proxy for stopover visitor arrivals to the country.
A 600% plunge in Unemployment in Jamaica
When the Jamaica unemployed fell to the lowest level on record to 4.5 percent in April this year, it was falling precipitously by more than six times from the levels that were at unhealthy and chronically high of 24 to just under 28 percent between 1977 and 1989.
Jamaica’s record low unemployment at 4.5% in April 2023.
The April 2023 outcome is down from 6 percent in April last year and from 6.6 percent in July 2022, while the number of persons employed is at its highest level ever, with the total number of employed persons at 1.313 million in April this year. The highest level of employment before was 1.27 million in January 2020. Knowledgeable persons have expressed their views on the numbers, with one suggesting that Jamaica has always had a low level of unemployment. That is entirely at variance with the facts; see chart.
The country has only experienced rates below 15 percent for a few years, primarily after 2007.
There has also been some focus on the number of hours used to determine whether persons are included in the employed pool. What has not been acknowledged by critics of the low unemployment level is the many businesses finding it more difficult to recruit workers to employ, as well as the need to increase wages to retain those they have. Finding workers going forward is going to be a real challenge and one that will cause companies to look carefully at their operations to see where they can employ cost savings methods to deliver goods and services with minimal dislocations. If the economy continues to expand, it will result in workers coming in from overseas.
When Jamaicans start to pump gas for their vehicles, it will dawn on us that things have changed and that development is only a few years away.
Jamaica’s employment rate has been pushed by the considerable focus on tourism expansion and the advent and rapid expansion in the BPO sector that now employs around 5 percent of the workforce, with the numbers employed said to be over 60,000 and addition a sharp increase in construction activity for residential and commercial demand lifted employment in that area.
Data compiled by ICInsider.com from the Bank of Jamaica, the World Bank and Statin show that unemployment averaged 25.8 percent between 1977-89. The rate fell in 1990 to 19.1 percent and 15.7 percent in 1992 and remained around 15 percent until 2006, then fell to 11.5 percent in 2007 and 11.3 percent in 2008 and 9.9 percent in 2009 before reversing back up to mid-teens up to 2015 and had slowly drifted down since with the exception of 2022 when it climbed to 10.7 following the economic fallout from the Covid19 pandemic.
Sharp jump in tourist arrivals in July
Visitor arrival numbers passing through the Montego Bay Sangster International Airport jumped sharply by 19.4 percent to 513,700 in July this year compared with 430.400 in 2022, Grupo Aeroportuario del Pacífico, operators of both local international airports reported.
The July 2023 numbers also jumped 15 percent over the 447,934 passengers using the airport in July 2019, the last year that the data was not affected by the disruption to the industry by Cocid19 pandemic. Passenger traffic through the Montego Bay Airport, for the year to date, is up a solid 25.8 percent to 3.17 million in 2023, over 2.52 million in 2022 and nearly 6 percent up on the 2.998 million in 2019.
Data from Grupo Aeroportuario del Pacífico also revealed that Kingston had a 2.9 percent increase in traffic to 181,700 from 176,600 in July 2022 and a 13 percent jump on the 204,948 that passed through the system in July 2019. For 2023 to date, 25.3 percent more passengers used the airport facilities to hit 1.011 million from 807,200 in 2022, but 5 percent less than the 1.06 million in 2019.
Jamaica’s unemployment drops to record low
Jamaica’s unemployment rate dropped to the lowest level on record in April 2023, with only 4.5 percent of persons said to be out of work, according to data released today by the Statistical Institute of Jamaica (Statin) and is 1.5 percentage points lower than the 6 percent in April 2022.
There were 1,373,800 persons in the Labour Force, 23,500 or 1.7 percent more than in April 2022, but 43,300 persons gained employment, according to the official government body that collects the data.
The number of persons Outside the Labour Force in April this year was 725,700, a decrease of 20,700 or 2.8 percent compared to 746,400 in April 2022.
Biden appoints Jamaican to economic council
Dr C Kirabo Jackson
President Biden announced his intent to appoint Dr C. Kirabo Jackson to be a Member of the Council of Economic Advisers. Jackson an American-born Jamaican whose father Dr. Clement Jackson was head of the Planning Institute of Jamaica in the 1980s is the Abraham Harris Professor of Education and Social Policy at Northwestern University. He is also a Professor of Economics, a Fellow at the Institute for Policy Research, and a Faculty Research Fellow at the National Bureau of Economic Research. Jackson also attended Hillel in Kingston, Jamaica in his early formative years.
Currently, Jackson serves as the Editor-In-Chief of the American Economic Journal: Economic Policy. He was previously Co-Editor for the American Economic Journal: Economic Policy and the Journal of Human Resources. Jackson earned his Bachelor’s in Ethics, Politics, and Economics from Yale University and obtained his Ph.D. in Economics from Harvard University. His research interests include labour economics, public finance, and applied econometrics, with a focus on the economics of education. His research has explored the role of teachers in the K-12 system, the causal impact of public-school spending on students, methods to measure impacts on students’ socio-emotional skills, and other education-related subjects.
His work has been published in the highest-impact economics journals, including the Quarterly Journal of Economics, the Journal of Political Economy, the Review of Economic Studies, the American Economic Review: Insights, the Review of Economics and Statistics, the American Economic Journal: Economic Policy, and the American Economic Journal: Applied Economics. His research findings have garnered attention from numerous media outlets, including the New York Times, the Wall Street Journal, the Washington Post, Bloomberg, and others.
In 2020, Jackson was elected to the National Academy of Education and received the David N. Kershaw Award from the Association for Public Policy Analysis and Management in recognition of his contributions to the field of public policy analysis and management. In 2022, Jackson was elected to the American Academy of Arts and Sciences, an honour that celebrates excellence and leadership across various disciplines and practices.
Remittance inflows rise for Jamaica
Remittance inflows into Jamaica continue to track close to the 2022 flows, with a slight reduction year to date, but inflows for May 2023 rose 2.4 percent over last year after a US$7 million increase to US$290 million, data out of the country’s central bank show and that was well up on the $272 million pulled in during April this year.
Inflows for the year to date are down marginally by 0.2 percent to US$1.36 billion compared to the same period in 2022.
The continued strong inflows seem tied to the robust economic activity in the country’s primary source – the United States of America, which accounted for 70 percent of the inflows.
Inflation in Jamaica rises in June
Inflation in Jamaica climbed by one percent in June over May, fueled by a spike in food prices, furnishings, household equipment and routine housekeeping and restaurant and accommodation services that rose 4.2 percent.
Inflation for the past two months is slightly higher than the same period in 2022, with June this year being partially pushed by the sharp increase in the minimum wage.
Point to point inflation rose from 6.1 percent in May to 6.3 percent, while the fiscal year inflation to date ended at 1.6 percent to June or 4.8 percent per annum if the current rate were to continue to March 2024.
Tourist arrivals continue to rise for Jamaica
Tourist arrivals continue to rise for Jamaica, with preliminary data showing an increase in June and the year to date compared with last year and 2019, the last year with uninterrupted movement of visitors prior to the current year, data put out by Grupo Aeroportuario Del Pacifico, operators of both of the country’s major international airports in Jamaica, show.
Montego Bay’s Sangster International Airport handled 448,500 passengers, an increase of 14.1 percent over the 393,100 passengers processed in June 2022 and for the six months to June, 2,656,800 travellers, 27.2 percent more than 2.09 million in 2022. Kingston’s Norman Manley International Airport processed 147,7000 passengers, an increase of 13.5 percent over the 130,200 passengers in June 2022 and for the six months to June, 829,500 travellers, 31.5 percent more than 630,600 in 2022.
Compared to 2019, the last year with uninterrupted business, Sangster Airport handled 4 percent more than 2019 and Normal Manley 3 percent less than in 2019, for an average increase of 2.2 percent.
The latest data out of the Jamaica Tourist Board (JTB) shows that stopover arrivals are up just 3.6 percent over 2019 for the first three months of 2023 and up 43.8 percent over 2022 to 733,982 arrivals. The JTB report for 2022 shows stopover arrivals up 78 percent in the June quarter compared with 2021 but down 3.3 percent compared with 2019, representing a significant improvement over the 28 percent decline in the first quarter compared with that of 2019.
Cruise travel was flat in March, according to JTB data, compared with 2019, but up 261 percent over March 2022. Cruise arrivals for the three months period are up 382 percent over 2022 to 477,502 visitors but down 24 percent compared with 2019.