The Bank of Jamaica (BOJ) has said that given the continued effects stemming from the coronavirus disease (COVID-19) across the globe, it has factored the reality that there will be a significant fallout in foreign exchange (FX) as two major sources — remittances and tourism – become adversely impacted.
Dr Wayne Robinson, deputy governor with responsibility for the research and economic programming division and financial stability at the central bank, told the Jamaica Observer that the fallout in these two main areas of FX earnings will also carry consequential economic implications.
“In addition to the direct adverse impact on the welfare of recipients, the loss of this source of income will adversely affect economic activity as spending in the economy will also contract. This will amplify the impact of the fallout in other sectors on foreign currency inflows, overall gross domestic product (GDP), and employment,” he shared with the Business Observer.
He said that with gross remittance inflows providing about 16 per cent or US$2.5 billion and tourism US$3 billion annually, this will bring about sharp declines in the usual inflows of foreign exchange, especially as global markets feel the pinch of the deadly pandemic.
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