Central Bank observes IMF growth, global development, others

Jun 1, 2021, 10:34 AM | Article By: Pa Modou Cham

After the Monetary Policy Committee (MPC) of The Central Bank met to review the economic and financial development in the first quarter of 2021, the committee observed the International Monetary Fund (IMF) growth, Bank’s Composite Index of Economic Activity (CIEA) and the rising trend in inflationary pressure.

Delivering the press statement on Thursday, the Central Bank Governor Buah Saidy explained that the committee noted the upgrade revision in the IMF growth projections for 2021, based on the stronger expected momentum during the second half of 2020 strong demand for products that support working from home and the release of pent-up demands for durable goods. He added that despite improvements in the growth, forecast, risk to global outlook are tilted upwards as uncertainties surrounding the covid-19 pandemic on vaccine efficacy and roll out remain uncertain.

He continued that: “the committee opined that global developments have impacted domestic development as evident in some macroeconomic indicators. Real GDP growth for The Gambia is forecast at 0.2% for 2020, down from earlier projection of zero growth. The committee noted the increase in food prices which are due to cost push effects of the structural bottlenecks at the ports. Some of the structural issues are been addressed.”

He further told journalists that the CIEA, which is a high frequency measure of the level of activity in the economy, estimated that economic activity contracted in 2020 reflecting weaker domestic and foreign demand. Mr. Saidy reiterated that in 2021, the domestic economy is predicted to recover premised on rebound of economic activity in Q4, 2020 and Q1 2021.

“The committee noted the rising trend in inflationary pressures for the first four months of 2021 mainly reflecting global increase in food prices and the one-off effect of increase in the education index in October 2020. The committee does not consider the spike in headline inflation in April as a major cause for concern. The near-term forecast of inflation indicates deceleration in Consumer Price Inflation (CPI) in the forecast horizon.”

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