The Gambian economy grew by a robust 6.5 percent in 2018 and growth is projected to remain robust this 2019 but there are risks to the outlook, including the collapse of Thomas Cook that may affect tourism and the impact of delayed rains on agricultural production, the Central Bank of The Gambia has announced.
In delivering its quarterly assessment of the economy, the bank’s Monetary Policy Committee yesterday reported that preliminary balance of payments estimates indicate that the current account balance improved to a deficit of US$43.1 million in the first nine months of 2019 from a deficit of US$55.6 million in the corresponding period of 2018, due to the improvement in the services account and current transfers.
The CBG report states: “The goods account deficit is estimated at US$286.7 million in the first nine months of 2019, higher than the deficit of US$252.6 million in the corresponding period in 2018. Exports increased to US$107.4 million or by 17.19 percent during the period under review. The value of imports increased by 12.5 percent to US$409.02 million from US$363.7 million in the same period in 2018.
“The surplus in the services account stood at US$74.4 million compared to US$52.2 million in the same period last year, due mainly to the increase in personal income from tourism.
“And that gross international reserves of the bank is projected at 4 months of next year’s imports of goods and services.”
Preliminary estimates of government fiscal operations for the first nine months of 2019 showed that the budget deficit (including grants) narrowed to D2.3 billion compared to a deficit of D3.9 billion in the same period last year. The overall balance (excluding grants) also improved to D5.3 billion compared to a deficit of D6.9 billion a year ago.
“Revenue and grants generated during the period under review amounted to D11.9 billion relative to D9.7 billion in the same period last year. Domestic revenue, which comprises tax and non-tax revenues, stood at D8.9 billion in the nine months to end- September 2019, higher than D6.7 billion in the corresponding period a year ago.
“ Total government expenditure and net lending for the first nine months of 2019 totaled D14.2 billion compared to D13.6 billion in 2018.”
As at end-October 2019, the stock of domestic debt increased to D33.0 billion (37.6 percent of GDP) from D31.1 billion (40.3 percent of GDP) in the corresponding period a year ago.
“Major risks to the outlook, however, continue to be the domestic food supply situation in the light of poor harvest, the impact of the shock to tourism as a result of the collapse of Thomas Cook and the uncertainty surrounding global food prices. Similarly, high public debt poses significant risk to the economy.”
“Taken the above factors into consideration, the Committee decided to maintain the Policy rate at 12.5 percent. The Committee also decided to maintain the interest rate on the standing deposit facility at 2.5 percent and the standing lending facility at 13.5 percent.”