Gambia Economic Outlook
- In spite of the global downturn, economic growth will remain robust, driven mainly by an expansion in agriculture.
- The country’s economic governance has improved but political governance remains a challenge.
- To address the problems of high youth unemployment and poverty, Gambia will implement a programme for accelerated growth and employment.
Economic growth slowed in 2011 but is expected to stabilise in 2012 and 2013. It has been driven mainly by the performance of the agricultural sector. Poor weatherconditions that harmed crop production in 2011 and the global crisis of recent years have negatively affected Gross Domestic Product (GDP) growth. Nevertheless, reforms in agriculture implemented by the government will continue to boost the economy and sustain its growth. Inflation rose in 2011 because of the increase in food and energy prices, since the country imports half its food needs, and the local currency lost value slightly against all major currencies over this period. Inflation is forecast to remain moderate in 2012 and 2013 because of the continuation of the tight monetary policy to contain it below a target of 5%.
Similarly, the budget deficit as a percentage of GDP is expected to fall again in 2012 and 2013 through restrictive fiscal policy and both domestic and external debt will be controlled to address problems of heavy debt. These policies will be complemented by the government’s efforts to reform tax policies and improve revenue administration and public financial management systems.
Youth unemployment is a major challenge in Gambia and is estimated at over 40%. The new Programme for Accelerated Growth and Employment (PAGE) that will be implemented between 2012 and 2015 is ambitious and aims to reduce both poverty andunemployment.
