Gam­bian econ­omy pro­jected to ex­pand 4pc

The Pak Banker - - Front Page -


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.

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