Economic recovery is gathering strength - CBG Governor

Friday, June 01, 2018

The governor of the Central Bank of The Gambia has disclosed that at the domestic front, economic recovery is gathering strength, supported by improved implementation of macro-economic policies and business confidence.

“Real gross domestic product (GDP) is projected to grow by 5.4 percent in 2018 compared to 3.5 percent in 2017 predicated on rebound in agriculture and continued to improvement in trade, tourism and construction”.

Bakary Jammeh made this disclosure during the Monetary Policy Committee (MPC) meeting held on Wednesday May 30th, 2018 at the Central Bank of The Gambia.

He explained that since the last MPC, global economy continues to strengthen support by increased trade flows and higher investment, accommodative monetary policy, and recovery in commodities.

“Strong economic growth in emerging market and developing economies and robust recovery in advanced economies are expected to continue in 2018. In sub-Saharan Africa, economic growth is expected to improve further against the backdrop of more supportive external environment, including stronger global growth, higher commodity price and improved market access. However, there are risks to the global economic outlook including, prospect for increased trade protectionism, rising volatility in asset markets and geo-political tensions”.

Jammeh noted that the IMF forecasts the global economy to grow by 3.9 percent in 2018 compared to 3.8 percent in 2017, adding that global inflation is projected to increase to 3.5 percent in 2018 from 3.2 percent in 2017 predicated on continued recovery in commodity prices and stronger global demand.

Hon. Jammeh stated that preliminary balance of payments estimates for the first quarter of 2018 indicates an improved position compare to the corresponding period a year ago, thanks largely to the increase in current transfers.

“The current account deficit narrowed to US$7.01 million (0.7 percent of GDP) in the first quarter of 2018 from US$29.45 million (2.7 percent of GDP) a year ago, reflecting marked increase in current transfers (mainly remittances) by 62.2percent of US$60.71 million.”

However, he added that the goods account balance worsened from a deficit of US$54.61 million (5.2 percent of GDP) in the first quarter of 2017 to a deficit of US$67.46 million (6.1 percent of GDP) in the first quarter of 2018, following sharp decline in exports and significant increase in import. “The capital and finance account balance declined to a surplus of US$7.53 million in the first quarter of 2018 from a surplus of US$27.36 million in the same period a year ago. Against the backdrop of strong international support and improved domestic foreign exchange market condition, a gross international reserve is protected in four months of next year’s import of goods and services.” He further explained.

The CBG reiterated that in the year end March, 2018, volume of transactions in the domestic foreign exchange market totaled US$1.7 billion, higher than US$1.3 billion the same exchange period last year, reflecting improved market conditions and confidence.

The stock of domestic debt, he explained, decreased from D29.3 billion or 62.2 percent of GDP, in April 2017 to D28.8 million or 55.8 percent of GDP in April 2018. Stock of treasury and Sukuk Al Salaam bills contracted significantly by 13.5 percent to D16.1 billion during the period under review.

Governor Jammeh also enumerated on banking sector, monetary development, inflation and inflation outlook, pointing out that they have taken the factors into consideration.

 “This decision is to reinforce private sector credit growth particularly to small and medium size enterprises. The committee will continue to closely monitor domestic and international economic developments and stands ready to act accordingly should economic conditions change.” he added.

Author: Pa Modou Cham
Source: Picture: Bakary Jammeh, Governor Central Bank