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Economic Growth Revised to 6.1%

Nov 4, 2008, 5:10 AM | Article By: Baboucarr Senghore

It is evident that the global economy is experiencing a major slowdown owing primarily to the worst financial crisis since the great depression. Stock markets have become increasingly volatile, some major financial institutions in advanced economies have collapsed, capital flows to emerging markets have weakened and some currencies have depreciated sharply.

Governments have taken unprecedented measures to address these problems. Despite this, international financial markets are still marked by a high degree of uncertainty and risks of a global recession are high. The International Monetary Fund in October 2008 marked down its growth projections of the global economy for 2009 to 3.0 percent and the outlook is subject to considerable downside risks.

Well, in The Gambia, the Governor of the Central Bank of the Gambia Mr. Bamba Saho on Friday said, during a press conference held at the bank, that provisional data from the Gambia Bureau of Statistics indicates that output growth of the Gambian economy has been revised to 6.1 percent in 2008.

The projected output growth, according to Governor Saho, is premised on the 30.2 percent and 7.2 percent increase in the value added of agriculture and industry, higher than 4.0 percent and 6.1 percent growth in 2007.

"The value added of the services sector on the other hand, is forecast to contract by 0.6 percent in 2008 compared to the growth rate of 10.4 percent in 2007.

"Reflecting the rise in global food and energy prices, end-period inflation measured by the National Consumer Price Index accelerated from 1.6 percent and 2.2 percent in May and June to 3.7 percent and 5.0 percent in July and August 2008 respectively. As at end-September 2008, the rate of inflation had climbed to 6.4 percent, the highest since July 2007," he said.

Governor Saho revealed that food inflation in The Gambia picked up in May 2008 to 1.9 percent and accelerated to 2.6 percent, 5.1 percent and 6.9 percent in June, July and August respectively.

He added that owing to the strengthening of the US dollar, reflecting investor flight to the US dollar, assets viewed as safe haven, reduced foreign currency inflows and rising costs of imports, the Dalasi depreciated against the major currencies traded in the inter-bank market.

"Given the acceleration in inflationary pressures reflecting in the main, high food and energy prices, high inflationary expectations and the weakening of the Dalasi, inflation is forecast to exceed the end-December 2008 target of 6.0 percent," he added.