Momodou Bamba Saho, the governor of the Central Bank of The Gambia (CBG) has disclosed that the International Monetary Fund (IMF) projects world output is expected to rise by 3.9% in 2010 and 4.9% in 2011 and the growth in sub-Saharan Africa has also been revised upwards and is expected to increase by 4.3% and 5.5% in 2010 and 2011 respectively.

He revealed that the economic activity in the West African region has also increased by 4.9% in 2009 but lower than the 5.8% in 2008. Governor Saho made these remarks yesterday at the CBN conference room in Banjul, while presiding over a press briefing of the Monetary Policy Committee.

On the back of increased economic activity, Saho went on to state that prices for commodity and crude oil have continued to increase. He stated that economic activity in The Gambia is also expected to evolve largely as anticipated in the last Monetary Policy Committee (MPC) meeting supported by the expected partial recovery in tourism and remittances, and robust growth in agriculture. He added that real Gross Domestic Product (GDP) growth is projected to remain strong in 2010.

He said the money supply also grew by 19.4 percent in 2009 compared to 18.4 percent in 2008 adding that both components of money supply have also increased with quasi-money growing at a faster pace 30.3 percent than narrow money 9.4 percent.

Governor Saho also informed the gather that the data on government budgetary operations in 2009 shows revenue and grants totaled to D4.89 billion, 22.2 percent of GDP relative to D3.74 billion 20.9 percent of GDP in 2008.  He said the total expenditure and net lending amounted to D5.63 billion 25.6 percent of GDP from D4.33 billion 24.2 percent of GDP in 2008. “The fiscal deficit including grants on commitment basis widened slightly to D739.99 million 3.28 percent of GDP in 2009 from 587.90 million 3.28 percent of GDP in 2008, and the balance of payments estimates indicate an overall surplus of D137.9 million in 2009 compared to a deficit of D811.3 million in 2008,” he said.

He added: “According to the forward-looking business sentiment survey, respondents indicate that economic and business activity was higher in the fourth quarter of 2009 relative to the preceding quarter and that prospects for the first quarter of 2010 are favourable”.  

He went on to state that majority of the respondents indicate that economic and business activity was higher in the fourth quarter of 2009 relative to the preceding quarter and that prospects for the first quarter are favourable. “End-period inflation measured by the national consumer price index NCPI, declined to 2.4 percent in September 2009 from 5.4 percent in June before rising to 2.7 percent and 3.6 percent in December 2009 and January 2010 respectively.  

Food and non-food consumer price inflation increased to 4.4 percent and 2.5 percent in January 2010 from 2.7 percent and 1.9 percent in September 2009 respectively.  However, annual average inflation 12 month moving average fell to 4.3 percent in January 2010 compared to 5.6 percent in September 2009m,” he said.
 
Outlook for Inflation
Owing to the stability of the dalasi and increased agricultural production, Saho said headline inflation is forecast to be in the range of 3.5 percent to 4.0 percent by the end of the first quarter of 2010. The risks to the outlook, he went on, are the steady rise in global energy and food prices.
 
Decision
Taking the above developments into consideration, including the outlook for the Monetary Policy Committee, Saho said the committee has decided to maintain the rediscount rate at 14.0 percent.