Inflation increases as Gambian Dalasi loses value

Inflation - the rate at which the prices of goods and services increase, is forecasted to have increased more than the target of 5 per cent in The Gambia. 

This is primarily because the national currency, the Dalasi, continues to weaken in value against all major international currencies, the Central Bank Governor has said.

The Central Bank Governor made this remark on Monday during the opening ceremony of the ‘regional course on fundamentals of macro-economic analysis’. 

The weeklong training course organized by the West African Institute for Financial and Economic Management (WAIFEM) underway in Banjul, is being attended by economists from central banks in the ECOWAS sub-region and other financial institutions. 

The Dalasi has depreciated against the British Pound by 12.62 per cent, the US dollar by 11.87 per cent and the Euro by 12 per cent. 

Governor Amadou Colley said in view of this unforeseen circumstance, the Central Bank of The Gambia (CBG) would therefore continue to implement prudent monetary policy critical to maintaining low, stable and predictable rate of inflation.

Among these prudent monetary policies the Bank is expected to undertake is price stability so as to promote economic growth by reducing uncertainty and preventing arbitrary redistribution of wealth.

The CBG Governor said in view of the uncertain economic environment, policy actions should be indicated by the prevailing economic circumstances of the country.

Economy expected to grow

It is projected that the Gambian economy would expand strongly by 9 per cent in 2013, despite the higher rate of inflation and continued weakening of the Dalasi.

This strong growth, Governor Colley noted, is premised on increased value-added of agriculture and tourism.

Preliminary estimates by the Gambia Bureau of Statistics indicated that the country’s economy grew by 6.2% per cent in real terms in 2012 supported by continuing recover of tourism and strong rebound of agriculture.

This followed a 4.3 per cent contraction of economic activity in 2011 as result of drought which caused agricultural output to decline by about 60 per cent.