The International Monetary Fund, (IMF), in its latest report on Gambia, said the West African country’s “economic outlook is bright but with risks”, PANA reports from here Saturday.
“Prospects for the Gambian economy over the near- and medium-term are good and real GDP growth is projected to continue to grow at a robust pace (5½ percent a year), led by agriculture, a gradual, but sustained recovery in tourism and construction, and telecommunications,” the report highlighted, adding, “this outlook is predicated on a gradual fiscal adjustment to reduce the burden and risks of domestic debt.”
According to the IMF, the prospect is, however, subjected to some risks, including fiscal shocks such as unanticipated revenue shortfalls and higher-than-budgeted spending which could threaten macroeconomic stability.
The Gambian economy is also vulnerable to terms of trade and weather-related shocks.
The report added that weaker global economy poses a near-term risk to growth, particularly for the tourism sector, but that risk would likely be mitigated by lower international prices for fuels and other imported commodities.
It said: “Progress on reducing poverty has been mixed. The government’s recent initiative to provide greater support to agriculture is expected to have contributed to reducing the incidence of poverty, as most of the poor live in rural areas.”
“The Programme for Accelerated Growth and Employment (PAGE) is also expected to promote inclusive growth as it places emphasis on agriculture, as well as investment in infrastructure,” the report added.
“The Gambian authorities have made significant progress restoring fiscal discipline in 2011. By employing a strict cash budgeting approach to limit spending to available resources, government’s net domestic borrowing (NDB) was contained at just over 2½ percent of GDP in 2011. At the same time, the government has refrained from central bank financing of the deficit,” the IMF report stated