IMF Regional Economic Outlook for sub-Saharan Africa projects 3.0 real GDP growth rate for Gambia in 2017 compared to 2.6% for the region.
The report was released in Oct 2017, and it discusses the impact of fiscal consolidation on growth and economic diversification within Sub-Saharan Africa.
Sub-Saharan Africa (SSA)
According to this report, the SSA Growth is expected to reach 2.6 percent in 2017, but the pickup reflects one-off factors, notably a recovery in oil production in Nigeria and the easing of drought conditions in eastern and southern Africa. While a third of the countries in the region continue to grow at 5 percent or more, 12 countries home to 40 percent of the region’s population are expected to see per capita income decline. The external environment has improved somewhat, facilitating sovereign bond issuances by the region’s frontier economies.
Foreign exchange market pressures appear to have decreased, but international reserves remain low in many countries within SSA. Public debt has been rising rapidly across the region, including in the fast-growing economies. In this context, implementing the planned fiscal consolidations and reforms to tackle constraints on growth are the key policy priorities.
The Gambia Economy
Consolidation efforts including equal distribution between expenditure cuts and revenue measures are expected to improve fiscal balances in The Gambia, Guinea-Bissau, and Togo.
Economic policies have varied across the region. However, The Gambia have put in place policy frameworks to achieve or preserve macroeconomic stability while supporting growth and poverty reduction, which has enabled close engagement with the IMF and the international community.
There are prospects for gradual improvements in economic conditions in most sub-Saharan African countries in fragile situations, but risks abound. Economic growth is expected to pick up in the Central African Republic, Chad, Comoros, the Republic of Congo, The Gambia, Liberia, and Malawi while improvements in fiscal balances are projected to be modest because of spending needs and relatively subdued commodity prices.
The report scored the Gambia with fragile situation among public stability, security, economic policies, and governance. Good progress has been made in the security situation and political stability and economic reforms, mainly fiscal balance. It also acknowledges that Gambia’s public debts need continued attention as it is forecasted to be 113% of GDP. Furthermore, the report noted that Gambia’s governance and public service faces serious constraints and improvement is essential in the period ahead.
Overall, the Gambia GDP growth is projected to 3% in 2017 and 3.5% in 2018. Similarly, inflation is forecasted to be 8.3% and 7.1%.
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This article was prepared base on IMF Economic Outlook for SSA.