Gambian economy projected to expand 4pc
Since the last Monetary Policy Committee (MPC) meeting of Gambia in July, the global economic outlook has weakened further.
According to the IMF’s October 2012 World Economic Outlook, growth in global output is forecast at 3.3 percent in 2012, down from the earlier projection of 3.5 percent attributed to the on-going Euro area crisis, the US fiscal cliff, possible food price increases arising from the drought in the US, and weaker stimuli from emerging market economies, especially China. Growth in advanced economies is projected at 1.3 percent in 2012 and 1.5 percent in 2013. After several years of very strong growth, economic activity in the major emerging markets decelerated in the face of weakening external demand.
According to the Gambia Bureau of Statistics, the Gambian economy is projected to expand by 4 percent in 2012 following a contraction of 4.0 percent in 2011 caused by the severe drought which reduced agricultural output in several countries in the Sahel region. Real GDP is expected to expand by about 10 percent in 2013 premised on the expected recovery of crop production to the 2009 and 2010 levels and robust growth of the tourism sector. Preliminary estimates of Government fiscal operations indicate that total revenue and grants in the first nine months of 2012 increased to D4.97 billion (17 percent of GDP) compared with D3.9 billion (13 per cent of GDP) in the corresponding period in 2011.
Domestic revenue, comprising tax and non-tax revenue, rose to D3.65 billion, or 16.6 percent. Tax and non-tax revenue increased to D3.2 billion and D411.9 million, or 18.8 percent and 1.7 percent respectively. Total expenditure and net lending also rose, but at a slower pace of 3.9 percent to D4.97 billion (17.0 percent of GDP). Both current and capital spending increased by 1.2 percent and 7.0 percent respectively.
The overall budget balance (including grants) on commitment basis was a surplus of D4.9 million (0.02 percent of GDP), compared to a deficit of D874.9 million (2.8 percent of GDP) during the same period in 2011.As at end-September 2012, the domestic debt increased to D10.2 billion (30 percent of GDP) compared to D9.2 billion (28 percent of GDP) in September 2011 Outstanding Treasury bills, accounting for 74.6 percent of the debt, rose to D7.6 billion in September 2012 from D6.6 billion in September 2011. Readings on the distribution of Treasury bills by maturity indicate that the 364-day bills, 182-day bills and 91-day bills accounted for 63.1 percent, 23.0 percent and 13.8 percent of the outstanding stock as at September 2012 com- pared to 66.6 percent, 19.7 percent and 13.7 percent in September 2011 respectively.The yield on all the maturities increased, albeit slightly. The yield on the 364-day, 182-day and 91-day Treasury bills rose to 10.68 percent, 9.59 percent and 8.5 percent in September 2012 from 10.01 percent, 8.71 percent and 7.98 percent respectively in Sept 2011.
Preliminary balance of payments estimates for the first half of 2012 indicate an overall deficit of US$38.03 million compared to a surplus of $46.67 million in the corresponding period of 2011. The current account recorded a surplus of $17.34 million, lower than the surplus of $61.65 million in the first half of 2011. The capital and financial account deficit widened to $54.91 million from US$14.98 million in the first half of 2011 reflecting the decline in foreign direct investment and equity capital flows.
The goods account deficit widened to US$89.38 million from a deficit of US$62.64 million in the corresponding period in 2011 due to the 34.8 percent increase in imports which more than offset the 21.2 percent growth in exports.
Food inflation decelerated from 5.5 percent in September 2011 to 4.9 percent in September 2012. Consumer non-food inflation, on the other hand, rose from 2.2 percent in September 2011 to 3.4 percent in September 2012.