The Gambia’s economy has shown significant resilience in the face of heightened global and regional uncertainty. The Gambia’s Fourth Economic Update – Spring 2024. Despite the subdued global environment, the country’s real GDP rose to 5.3% in 2023, indicating continued recovery from the Covid-19 pandemic and persistent external headwinds.
„We are pleased to see that economic activity in The Gambia has improved,” said World Bank Resident Representative Faye Borofis. „Improved agricultural production and increased public consumption and private and public investment have driven this positive growth. However, challenges such as high inflation, monetary tightening and economic slowdown in advanced economies have disrupted the tertiary sector and reduced private consumption. The country’s overall performance”.
Inflation continued its rise throughout 2023, reaching the highest levels in a decade, mainly due to global commodity prices. The Gambia’s Central Bank has responded by further tightening monetary policy to control inflation, raising the policy rate to 17% in December 2023 from 13% a year ago.
Looking ahead, the economic outlook for The Gambia remains positive, with GDP forecast to increase by 5.6% over the period 2024-2026. Growth will be driven by increased economic activity across all sectors, while maintaining a continued commitment to macro-financial stability. However, lingering regional and global geopolitical tensions, credit strains, recurring foreign exchange pressures, extreme weather events, financial meltdown and continued fiscal tightening pose downside risks to the country’s economic prospects.
From a long-term perspective, the pace of economic growth has declined since independence and has been volatile, coupled with drought, economic malpractices and weak governance, poor infrastructure and other structural constraints, all of which have resulted in a negative long-run. – Time productivity growth.
Following its democratic transition in 2017, The Gambia recorded resilient growth and positive productivity growth thanks to relative improvements in macroeconomic and financial management and stability. Poverty and inequality remain high, while disparities in access to essential services persist. Furthermore, The Gambia’s labor market suffers from significant disadvantage, low labor force participation and high informal employment with large gender disparities. The Gambia’s economy, despite productivity gains following the country’s transition to democracy, suffers from a lack of structural change, with room for maneuver to promote inclusive growth.
„The Gambia’s economic recovery is encouraging, but there is a need to address the structural constraints that are holding back faster growth,” stressed Ephraim Nyong’abo, World Bank economist for The Gambia and author of the report. „It is critical that the government implement policies that promote the necessary, transformative structural changes to sustain productivity and productivity and support the country’s inclusive economic growth agenda.”
The World Bank stands ready to continue to support The Gambia’s efforts to strengthen its economy, reduce poverty and achieve sustainable and inclusive growth.
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