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| 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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