The Economy of The Gambia Is Resilient Despite Global Challenges

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The Third Gambia Economic Update states that the country’s economy has proven remarkably resilient in the face of international economic difficulties.

The nation’s real GDP increased by 4.3% in 2022 despite a weak global economy, indicating a sustained recovery from the COVID-19 pandemic’s effects. The paper emphasizes how The Gambia’s economic development has been impeded by the feeble expansion of the services sector, especially in tourism. The amount of tourists visiting the country increased, but not by enough to make up for the slow growth in other subsectors. In addition, the economy has been negatively impacted by trade disruptions and negative terms of trade, given that the nation is a net importer of food and oil and had negative terms of trade in 2022.

A major worry for the nation has been inflation, which in 2022 surged to ten-year highs mostly as a result of shocks to the price of commodities globally. In response, The Gambia’s Central Bank tightened monetary policy to reduce inflation, increasing the policy rate by 1% in May, September, and December 2023.
The slight increase in per capita income hasn’t had enough of an effect to significantly lower poverty. It is anticipated that the number of people living in poverty has increased, primarily as a result of slower GDP growth per capita and rising food prices that further reduce household purchasing power.

Looking ahead, The Gambia’s economy is expected to increase by 5.5% over the 2023–2025 timeframe, maintaining a positive outlook. Increased economic activity across all sectors, especially in industry and services, will boost growth. However, dangers to the nation’s economic prospects include a protracted conflict in Ukraine, budgetary mishaps, climate change, and political unpredictability, all of which exacerbate already-existing structural economic limitations.

In The Gambia, financial inclusion is generally low, despite the fact that it is essential for promoting economic progress. The percentage of adults (15 years of age and older) without access to a transaction account is approximately 69%. Financial inclusion is hampered by a number of factors that come from both the supply and demand sides. Gambian families and small and medium-sized companies (SMEs) have challenges in realizing their full potential for growth, prosperity, and job creation due to low financial inclusion.

The World Bank is prepared to assist The Gambia in achieving sustainable development, poverty reduction, and economic strengthening going forward.

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