According to the general manager of the Jamaica National Building Society (Earl Jarrett), Jamaicans need to save more and he views this as a big problem.
According to the manager, Jamaica currently has one of the lowest savings rates in the world – the result of the generally limited access to financial services and the lack of a societal emphasis placed on saving.
“Many of the economic challenges facing the country are intimately related to this issue.”
Findings from the Singapore-based EconomyWatch.com indicate 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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