GDP projected to hit 5.0% in 2009

The Governor of the Central Bank of The Gambia, Bamba Saho, has said that the Gambia's Gross Domestic Product (GDP) is estimated to grow by 5.0 percent in 2009.

Governor Saho, who was speaking at a press conference called last Thursday by the Monetary Policy Committee of the Central Bank, noted that the agricultural sector recorded a second year of strong growth largely attributed to good rains and the successful expansion of rice farming.

"Money supply grew by 19.3 percent in the year to end-November 2009, lower that the growth rate of 19.8 percent in 2008. Both narrow and quasi money grew by 8.6 percent and 30.5 percent respectively," he said.

According to the Governor, provisional data on government fiscal operations in the first ten months of 2009 indicate that revenue and grants amounted to D4.3 billion compared to D3.1 billion in the same period in 2008.

"Domestic revenue totaled D3.3 billion higher than the D2.9 billion recorded in the corresponding period of 2008," Governor Saho added.

Gross official reserves as at end-November 2009 stood at US$182.40 million equivalent to 7.5 months of import cover.

He further noted that latest inflation data from the Gambia Bureau of Statistics, as measured by the National Consumer Price Index, continues to point to the easing of inflationary pressures.

"Food consumer price inflation declined significantly to 2.7 percent at end-November 2009 from 8.4 percent a year earlier. Non-food consumer price inflation also declined by nearly 2.0 percentage points to 2.7 percent during the same period," he said, adding that the Central Bank's measure of core inflation, which excludes prices of energy and volatile food items, also decreased to 3.0 percent in November 2009 compared to 6.6 percent in November 2008.

"The banking industry remains sound. The average risk weighted capital adequacy ratio (CAR) was 33.22 percent in November 2009, higher than the minimum requirement of 8.0 percent," Governor Saho stated. He added that total industry assets increased to D13.92 billion at end-November 2009, or 14.8 percent from a year ago.

In the domestic economy, Governor Saho added that the prices of some basic commodities have remained largely subdued over recent months.

"The implementation of the 2010 budget would support growth, maintain low inflation, improve debt sustainability and also create room for more robust growth in private sector credit," he declared.

Given these developments, coupled with the expected stability in the foreign exchange market aided by the rebound in the tourism sector and groundnut marketing, Governor Saho  said headline inflation is likely to be contained to below the target of 6.0 percent at end-December 2009.