Gambia Monthly Economic Bulletin August 2010

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    The Gambia Monthly Economic Bulletin- August 2010

    THE GAMBIA MONTHLY

    ECONOMIC BULLETIN1

    August 2010

    Institutional Support Project for Economic and Financial Governance (ISPEFG)Ministry of Finance (MOF)The Republic of Gambia

    The Quadrangle, Banjul, the Gambia

    1The Gambia Monthly Economic Bulletinprovides an update on the recent economic developments andpolicies in the Republic of the Gambia. This Bulletin has been prepared, under the overall guidance of the

    Honorable Permanent Secretary Mr. Serign Cham, by a research team comprising Tarun Das,

    Macroeconomic Adviser (ISPEFG); Momodou Taal, Acting Director; Lamin Camara, Principal

    Economist and Ms. Ceesay Chiel and Alhagi Jalllow, Economists in the Statistics and Special Studies

    Division (SSSD), Ministry of Finance; with key inputs from the Central Bank of Gambia (CBG), the

    Gambian Bureau of Statistics (GBOS), and the Gambian Revenue Authority (GRA).

    It may also be noted that the views expressed in this Bulletin solely indicate the views of the Research

    Team, which need not necessarily imply the views of the MOF, the other budgetary agencies or the

    organizations they are associated with.

    Any questions and feedback can be addressed to: Tarun Das (das.tarun@hotmail.com)

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    mailto:das.tarun@hotmail.commailto:das.tarun@hotmail.com
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    The Gambia Monthly Economic Bulletin- August 2010

    Political and Administrative Structure

    The Gambia is divided into seven regions comprising two Municipalities namely, Banjul City

    Council (BCC) and the Kanifing Municipal Council (KMC) and five provincial administrative

    regions namely, Western Region (WR), North Bank Region (NBR), Lower River Region (LRR),

    Central River Region (CRR) and Upper River Region (URR). Politically, the relevant units are

    Local Government Areas (urban), Districts, Wards and Villages. The Gambia has 35 districts

    and about 1870 villages with an average of 13 compounds.Basic Facts about Gambia:

    Fiscal year: 1st January to 31st DecemberItems (Year) Units Value Rank in the World

    from topin descending order

    Area (2009) Sq. km. 11,300 171 out of 248countries

    Population (2008) Million 1.735 148 out of 241countries

    GDP PPP (2006) Million US$ 2061 184 out of 229countries

    GDP Nominal (2006) Million US$ 511 199 out of 229countries

    GDP PPP per capita (2006) US$ 1921 140 out of 169countries

    GDP per capita (2006) US$ 329 192 out of 207countries

    Poverty Ratio (% of peoplebelow One-US$ per day) (2004)

    Percent 59 7 out of 95 countries

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    The Gambia Monthly Economic Bulletin- August 2010

    Source: http://www.nationmaster.com

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    http://www.nationmaster.com/http://www.nationmaster.com/
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    The Gambia Monthly Economic Bulletin- August 2010

    Contents

    Items Page

    Basic Facts about the Gambia 2

    Contents 3

    ISPEFG Project/ Research Team and Document History 4

    Highlights 5-6

    At a Glance 7

    1. Global Economic Outlook

    1.1Global recovery is stronger than expected but risks rise1.2Global inflation pressures are generally subdued but diverge

    8-128

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    2. Current State of the Gambian Economy

    2.1 Overall and Sectoral GDP Growth Rates2.2 Consumer Price Index (CPI) and Inflation2.3 Projection of CPI inflation for the year 20102.4 Producers Price Index (PPI)2.5 Government Fiscal Performance2.6 Expected Fiscal Outturn for the Year 20102.7 Domestic Debt and Outstanding Treasury Bills2.8 Treasury Bills Yields2.9 Money Supply

    2.10 Performance of Commercial Banks2.11 Commercial Banks Assets2.12 Commercial Banks Liabilities2.13 Interest Rates and Central Banks Policy Rates2.14 BOP, Foreign Exchange Reserves and Exchange Rates2.15 Exchange Rates

    13-2913151718192022242526

    2728293032

    3. Recent Policy Developments and Development Issues 3.1 Budget Call Circular for Preparation of 2011 Budget

    3.2 IMF Technical Assistance Missions on VAT Tax Administration andPublic Financial Management (PFM) Reforms

    33-363336

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    The Gambia Monthly Economic Bulletin- August 2010

    ISPEFG Project and Monthly Economic Bulletin Research Team

    Project Supervisor Honorable Mr. Serign Cham,Permanent Secretary

    Acting Project Coordinator Mr. Mod Lamin Ceesay,Deputy Permanent Secretary

    Acting Director (SSSD)Principal Economist (SSSD)Economist (SSSD)Economist (SSSD)

    Mr. Momodou TaalMr. Lamin CamaraMs. Ceesay ChilelMr. Alhagie Jallow

    Technical Assistants:Macroeconomic AdviserDebt Adviser

    Fiscal/ Financial Adviser

    Dr. Tarun DasMr. Adam Aikuta

    Mr. Dan Mwanje

    Document History:

    This report is an update of the following reports prepared by the Research Team:

    1. The Gambia Quarterly Economic Bulletin, pp.1-30, 31 March 2009.2. The Gambia Monthly Economic Abstract, pp.1-16, 31 March 2009.3. The Gambia Monthly Economic Bulletin, pp.1-40, 30 April 2009.4. The Gambia Monthly Economic Abstract, pp.1-16, 30 April 2009.

    5. The Gambia Monthly Economic Bulletin, pp.1-39, 31 May 2009.6. The Gambia Monthly Economic Abstract, pp.1-15, 31 May 2009.7. The Gambia Monthly Economic Bulletin, Part-1, pp.01-22, June 2009.8. The Gambia Monthly Economic Bulletin, Part-2, pp.23-46, June 2009.9. The Gambia Monthly Economic Abstract, pp.1-16, June 2009.10.The Gambia Monthly Economic Bulletin, Part-1, pp.01-22, July 2009.11.The Gambia Monthly Economic Bulletin, Part-2, pp.23-46, July 2009.12.The Gambia Monthly Economic Abstract, pp.1-16, July 2009.13.The Gambia Monthly Economic Abstract, pp.1-16, August 2009.14.The Gambia Monthly Economic Abstract, pp.1-16, September 2009.15.The Gambia Monthly Economic Bulletin, pp.1-25, October 2009.

    16.The Gambia Monthly Economic Bulletin, pp.1-37, November 2009.17.The Gambia Monthly Economic Bulletin, pp.1-37, December 2009.18.The Gambia Monthly Economic Bulletin, pp.1-36, January 2010.19.The Gambia Monthly Economic Bulletin, pp.1-40, February 2010.20.The Gambia Monthly Economic Bulletin, pp.1-40, March 2010.21.The Gambia Monthly Economic Bulletin, pp.1-31, June 2010.22.The Gambia Monthly Economic Bulletin, pp.1-36, July 2010.

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    The Gambia Monthly Economic Bulletin- August 2010

    HIGHLIGHTS

    Global Economic Recovery Is Stronger than Expected, but Speed Varies and Risks Rise

    The global economic recovery is stronger than expected, but there is greater risk forsustainability and the recovery is uneven across regions. As per the IMF World Economic Outlook

    (WEO) Update July 2010, world output is expected to grow by 4.6% in 2010 followed by 4.3% in2011. IMF projects continual global recovery, but cautioned that renewed financial turbulence andeuro area problems cloud the outlook, and advised fiscal consolidation based on credible medium-term plans.

    Sub-Saharan Africa has weathered the global crisis well and is expected to recover rapidly from theslowdown in 2009. Although some middle-income and oil-exporting economies were hit hard by thecollapse in export and commodity markets, the region managed to grow by 2.2% in 2009. Its growthis projected to accelerate to 5% in 2010 and further to 5.9% in 2011.

    Global Inflation Pressures are Subdued and Oil Prices are Moderate

    The global recession caused a large drop in inflation. Commodity prices have started to rebound dueto higher demand after the global economic recovery. But, the still-low levels of capacity utilization

    and well-anchored inflation expectations are expected to keep inflation low and subdued in 2010.Average Brent crude oil prices reached the peak level at $84.98 per barrel in April 2010, but starteddeclining since then and stood at US$74.74 in July 2010, compared to US$68.50 a year ago. In linewith futures market developments, the IMFs baseline petroleum price projection has been reviseddown to $75.3 a barrel for 2010 and $77.5 a barrel for 2011.

    Impact on the Gambian Economy

    Global recession had adverse impact on the Gambian economy in 2008 leading to decline of exportsand remittances and decline of manufacturing production, distributive trade, transport and telecom .However, thanks to bumper crops and very good performance by electricity, telecom and financialsectors, the real GDP growth improved from 6% in 2007 to 6.3% in 2008.

    As per revised estimates by GBOS, real GDP growth in 2009 is estimated to be 5.6% supported by agrowth of 9.8% in agriculture, 2.1% by industry and 4.3% in services production. With expectednormal monsoons, real GDP growth in 2010 is projected to be 5% aided by a growth of 4.6% inagriculture, 5.1% by industrial production and 4.9% in services production.

    CPI Inflation

    Annual point-to-point CPI inflation accelerated significantly from 4% (food 4.1% and non-food 3.8%)in July 2009 to 6.2% (food 8.2% and non-food 2.9%) in July 2010. However, the 12-month averageinflation rate decelerated from 6.1% in July 2009 to 3.6% in July 2010. Among other groups,transport recorded an inflation of 24.3%, clothing 2%, utilities 1.9%, restaurants and hotels 9% andmiscellaneous items 7.1% in July 2010.

    Government Fiscal Performance

    Governments fiscal performance was not satisfactory in Jan-July 2010 compared with Jan-July2009. Tax revenues declined by