|Projection based on robust expansion of agriculture and tourism, according to Central Bank officials in Gambia. (Photo by Mansa Banko shows officials at a rice field in Central River Region of The Gambia under the Ifad-funded PIWAMP project)|
An estimated economic growth of 7.5 per cent in 2014 is an indication that the Gambian economy is “gradually close to potential”, The Central Bank of The Gambia (CBG) said on Friday.
CBG’s Monetary Policy Committee (MPC) announced on January 31 that “[the growth] is predicated on robust expansion of agriculture and services, especially tourism.”
The MPC has also said real gross domestic product (GDP) growth of the Gambian economy for 2013 is provisionally estimated at 5.6 per cent compared to 6.1 per cent in 2012 and the contraction of 4.3 per cent in 2011.
Inflation to go down
Meanwhile, the Governor of CBG, Amadou Colley, has said inflation is forecast to moderate to within the target of 5 per cent by end December 2014. This, he said, is premised on prudent implementation of monetary and fiscal policies.
But, he admitted that the outlook to inflation is subject to several upside risks emanating from both the external environment and the domestic economy.
“The most important risks are higher-than-expected oil prices, fiscal and exchange rate pressure,” Colley told journalists at a briefing in Banjul.
According to the National Consumer Price Index (NCPI), consumer price inflation increased to 5.6 per cent in December 2013 compared to 4.9 per cent in 2012 – with food items which remain the main driver of headline inflation rising to a high of 7.3 per cent in October 2013 dropping a bit to 6.6 per cent in December 2013.
The NCPI said non-food prices were broadly stable and non-volatile in 2010, 2011 and in the first half of 2013 - with an average less than 2 per cent, however, they accelerated to a high of 4.6 per cent in June 2013 before decelerating to 3.7 per cent in December 2013.
“Core inflation, which excludes prices of energy, utilities and volatile food items, accelerated to 6.2 per cent in October 2013 before easing to 5.7 per cent in December 2013,” according to NCPI research.
For now, the MPC has said it judged the current policy stance to be appropriate and therefore has decided to keep the policy rate unchanged at 20 per cent - in view of the current state of the economy.
However, the Committee said it recognise the “circumstances could change” and is desirous “to respond promptly” to keep prices under control and ensure that inflation expectations are well anchored.
Written by Modou S. Joof
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