Remittance boom continues for Jamaica

August 26, 2021 by

Jamaica continues to benefit from a big surge in remittance inflows that started in May last year and is continuing with a big 28.7 percent jump to US$309 million in May this year, from $240 million in May last year.

This year’s performance is important as it was in May 2020 that the big upsurge in inflows commenced, with May 2020 inflows rising by 15.7 percent over 2019 inflows, bettering the decline recorded in March and April last year to the same months in 2019. For the year to date, total remittance inflows are up an incredible 42 percent over 2020 to reach US$1.4 billion for the five months period from US$987 million in 2020.
With the final seven months of 2020 generating inflows of $1.9 billion, total inflows for the current year should exceed US$3.4 billion and is likely to move closer to $3.9 billion based on the outturn for June this year over 2020.
Persons and businesses interested in foreign exchange developments for Jamaica should pay keen interest in what is happening in this market segment. If the remittances this year hold in 2022, with the rebound in stopover visitor arrivals set to return to normal levels in that year as well, would Jamaica be in a comfortable position for the central bank to build up reserves handily and it could also lead to some revaluation to the local currency.

Filed Under: Economy, FX Market Tagged With: ,

Bank of Jamaica signaling tighter Monetary Policy

August 19, 2021 by

Bank of Jamaica (BOJ) announces its decision to hold the policy interest rate unchanged at 0.50 percent per annum. The Bank also decided to consider commencing a tightening of monetary policy at the next meeting of the Bank’s Monetary Policy Committee (the MPC Committee) in September and to immediately implement other measures aimed at moderating inflation expectations, including the containment of Jamaican dollar liquidity expansion.
The BOJ went on to state, “While the Bank does not target any specific level of the exchange rate, Bank of Jamaica will also seek to ensure that movements in the exchange rate do not threaten the inflation target.”
Monetary policy decisions taken by Bank of Jamaica are aimed at ensuring that the annual increase in the prices of consumer goods and services (i.e. inflation) remains within the Bank’s inflation target of 4 percent to 6 percent.
These decisions were made by a unanimous vote by the MPC. The decisions were based on the MPC’s assessment that, while inflation is likely to breach the upper bound of the Bank’s target range over the next year, starting the September 2021 quarter, inflation will gradually decelerate thereafter as the transitory effects of the pandemic fade. “Conditional on the gradual tightening of monetary accommodation, inflation is projected to remain at 5 percent over the medium term, ” the BOJ stated.

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Jamaica’s tourist arrivals set for 170K in July

August 10, 2021 by

Tourism is Jamaica.

Tourist arrivals for July climbed just over 8 percent above arrivals in June this year, data out of the Sangster International Airport show, with 154,620 passengers arriving up from 142,727 in June.
Arrivals numbers are up nearly 400 percent above the 31,000 that came in July 2020, the second month of the country re-opening its borders to overseas’ visitors. Jamaica Tourist Board data show stopover arrivals in May 2021 at 122,522 compared to the airport arrivals through Montego Bay of 108,320. That means that Kingston accounted for around 24,000 visitor arrivals. Based on the above numbers, July should end up at 170,000 stopover arrivals and June is likely to end up around 160,000, as the country continues to record increasing numbers of guests following the dislocation last year.

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GDP growth underestimated by Jamaica government

August 9, 2021 by

The economy’s recovery was highly underestimated by GOJ, with taxes on imports rising 22 percent faster than original estimates; nowhere was the forecast understated than in the tourism sector that has thrown up revenues over 100 percent in the first three months of the current fiscal year.

Faster tourism recovery in 2021 than expected

Up to June data on revenues collected shows that the sector is bouncing back by more than twice what was estimated with Travel Tax the best indicator as to visitor arrivals jumping 137 percent above estimate and accommodation Tax rising 90 percent above forecast to $367 million from a forecast of $194 million. The absolute numbers may not be meaningful in the overall fiscal income, but the percentage change tells a significant recovery story.
Travel Tax was projected to bring in $1.22 billion, actual collection ballooned to $2.9 billion in the three months to June this year, up 137 percent over forecast and is 175 percent higher than the inflows for the three months to June Last year, when just over $1.14 billion was collected with $1.6 collected in April. Elsewhere GCT on imported items surged 27 percent, resulting in $4.9 billion being collected above the forecast of $18.2 billion.
Total tax revenues are up 22 percent ahead of the $107 billion collected to June last year, with GCT on local goods and services up 16 percent and contractors levy up 38 percent, which is in line with increased cement sales for the quarter over that of 2020.
The implications of the sharp increase in the above revenue segment are that the economy is growing faster than the government agencies forecasted for the current fiscal year and, in particular, the extent of the recovery in the tourism sector.

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GOJ revenues well ahead of budget

August 8, 2021 by

Revenue and grants for the government of Jamaica climbed 7 percent ahead of forecast with an increase of $11.6 billion over the budget of $163.8 billion to end at $175.4 billion for the three months to June this year. Expenditure, on the other hand, fell 4.6 percent or $7.6 billion to $165.7 billion.

Image courtesy of cooldesign/FreeDigitalPhotos.net

Tax revenues brought in $12 billion more than forecast and recurrent expenditure accounted for $7.6 billion of the underspending. Capital Spend was marginally more than the $18 billion budgeted.
Non-Tax revenues amount to $42.8 billion, with $34.5 billion collected in April and would have included the dividend from the Bank of Jamaica.
The government operation ended with a $5 million surplus in June and ended the three month period with a deficit of $1.7 billion, $22.4 billion better than forecast.
International Trade brought in 22 percent more revenues than the budgeted amount for the three months period, with a collection of $47.8 billion versus a forecast of $39 billion. Production and consumption taxes contributed $3.4 billion more to the revenue intake than planned, with an intake of $47.7 billion versus $44.3 budgeted.

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June stopover visitor arrivals set for 160,000

July 22, 2021 by

Stopover arrivals in May 2021 were 122,522 Jamaica Tourist Board recently released data shows, just over 2,500 above ICInsider.com original May forecast. Data of passenger arrivals through the Sangster’s International Airport suggests that stopover arrivals for June should reach 160,000 or 67 percent of the arrivals of 239,000 June in 2019. 
If the trend continues, July is likely to see just over 200,000 stopover arrivals, which would amount to 77 percent of July 2019 stopover arrivals of 270,462.
In the meantime, arrivals for August this year could exceed the 215,000 arrivals in August 2019.
June arrivals through Sangster’s International Airport were 142,727, which amounts to 61 percent of the June 2019 numbers of 239,000.
For the January to May period, arrivals decreased by 36 percent to 366,499 stopovers, 207,632 less than the 574,131 that came in the first three months of 2020, with the industry closed until late June.
The total stopover arrivals, recently released by the Jamaica Tourist Board for May are down 42 percent from 2019, but a huge improvement over the decline of 65 percent that April suffered against the same period in 2019, additionally, May numbers are 48 percent above April this year, showing the strength of the recovery.

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Jamaica’s GDP drops 6.7 percent in Q1

July 15, 2021 by

GDP fell 6.7 percent in the first quarter of 2021 due to the 9.9 percent fall in category service industries, the Statistical Institute of Jamaica reported.

Mining records GDP gains in 2021

Declines recorded for service industries except for government services. GDP for Hotels and restaurants fell 56 percent, being the main contributor to the decline. The Goods Producing Industries grew by 2.6 percent, with mining and Quarrying up 7.1 percent. Construction grew 10.5 percent, but Manufacturing suffered a 1.1 percent decline. Agriculture fell 2 percent due to drought conditions, Statin stated.
Declines were experienced in Other Services 21.9 percent, Transport, Storage and Communication 7.8 percent, Electricity & Water Supply 6.9 percent, Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment 5.1 percent, Real Estate, Renting & Business Activities 1.9 percent and Finance and Insurance Services 1.2 percent.

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9% unemployment rate for Jamaica

July 15, 2021 by

Jamaica’s unemployment rate was 9 percent for the period to April 2021, and marginally worse than the January survey with unemployment of 9 percent, an increase for the same period last year, data released today from the Statistical Institute of Jamaica shows.
The latest data is an improvement over the 9 percent reported for January this year.
According to Statin, 1,206 million Jamaicans are employed during March this year, up from 1,195 shown by the January survey but 3.2 percent worse than in April 2019. No survey was done for April 2020 last year due to the Covid-19 pandemic.
The art, entertainment and other service industries suffered the worse decline in employment.

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Jamaica Tourism arrivals jump 39%

July 6, 2021 by

Stopover visitor arrivals to Jamaica appear set to increase by 40 percent over May numbers, data compiled from reports of passenger arrivals disclosed by the Sangster International Airport suggest. According to the data, 39 percent more passenger arrivals came into the country in June compared to May this year.
May saw a 44 percent spike in passenger arrivals through the airport for the second city of the country over April, an indication that visitor arrivals should hit 105,000 in May, up from 82,702 in April. June arrivals through the airport, topped 142,000 for the first time since the industry opened up for foreign visitors in June last year. June this year ended with 142,727 arrivals for the month, amounting to 61 percent of the June 2019 numbers of 239,000.
Aircrafts arriving in the country, rose by 5.8 percent in June to 2,490 compared to a 15 percent increase in May with 2,353 units over April, with the trend showing increased passenger load.
July is set to see the total visitors breaking the 200,000 mark for an increase of 40 percent putting it to 76 percent of the July 2019 influx of 270,462.
August could see the industry coming back to the 2019 levels and may well exceed it and possibly suggest full recovery for the industry.
The latest Jamaica Tourist data published is only for April and was published for the public’s use on June 17, more than a month and a half after the month closed. The data for February was even worse coming out on April 27, nearly two months after the close of the month reported on.

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Tourism arrivals jump again

June 19, 2021 by

Stopover arrivals in April 2021 were 82,702, up some 12 percent over March this year, with 81,114 of them coming from the United States, the Jamaica Tourist Board reports, there were no arrivals for April last year.

Growth in tourism expected in 2021

The April arrivals represent a fall of 77 percent compared to April 2019, with 366,425 stopover visitors. The trend for 2021 is positive, with arrivals in February in line with January, but February, a shorter month, is qualitatively better than January. March exceeded February by 68 percent and Aril is ahead of March by 12 percent. For the January to April period, arrivals decreased by 57.5 percent, with 243,977 stopovers last year but are 330,154 less than the 574,131 stopovers coming in 2020.
Airport traffic data indicates that May will see the highest monthly influx of visitors, with 120,000 stopover arrivals for the first time since March 2020.
The numbers are set to rise even more for the summer months, with some hotels turning away visitors being fully booked out.

Filed Under: Economy Tagged With: ,