ENP Newswire -
Release date- 07082014 - Since the previous meeting of the
The earlier optimism of robust US growth of around 3.0 percent in 2014 has been revised downwards following the 2.1 percent contraction in economic activity in the first quarter partly due to temporary factors such as the slowdown in inventory investment, the expiration of some fiscal measures at the beginning of 2014 and severe winter weather.
Growth in advanced economies is forecast at 1.8 percent in 2014, higher than the 1.3 percent in 2013. Economic activity in the Euro zone continues to expand, albeit modestly. Growth was uneven with economic expansion in
The GDP growth for Sub-Saharan Africa is projected at 5.4 percent from 4.8 percent in 2013, premised on improved agricultural production, increased private consumption and expansion in commodity related projects.
Global inflation remains benign in advanced economies, although the risk of deflation in the Euro zone persists reflecting the combination of the substantial output gap, the decline in the prices of commodities, especially fuels and food and low inflation expectations. In emerging markets and developing economies, inflation is expected to decline from about 6 percent in 2014 to about 5 percent in 2015. To the extent that the decline in global commodity prices should help reduce price pressures, this reduction is more than offset by recent exchange rate depreciations in a number of emerging and developing countries, including The
Global crude oil prices have fluctuated in recent months reflecting mainly geopolitical developments. Year-to-date, oil prices averaged
The Domestic Economy
The growth outlook for the Gambian economy has moderated since the previous meeting of the MPC. Owing to uncertainties surrounding agricultural production due to the prospects of inadequate rainfall, real GDP is projected at 5.3 percent in 2014, slightly lower than the 5.6 percent in 2013 and the earlier forecast of between 6.0-6.5 percent. Agriculture value-added is forecast to increase by 12.5 percent, industry (2.9 percent) and services (3.6 percent).
Money and Banking Sector Developments
In the year to
Reserve money, the Bank's operating target increased to D5.78 billion, or 19.7 percent. Although reserve money growth was above the target of 13.5 percent, it was lower than the strong expansion of 26.4 percent a year earlier. The decrease in the pace of expansion of reserve money was mainly the result of the contraction in the NFA of the
The banking sector remains fundamentally sound. Recent data indicate that capital and reserves increased to D3.45 billion in
Total assets increased to D25.57 billion, or 14.2 percent from a year earlier. Gross loans and advances, which accounted for 23.4 percent of total assets, decreased to D5.97 billion, or 2.3 percent from
The industry recorded a net income of D197.0 million in the first six months of 2014 compared to D80.6 million in the corresponding period in 2013. The return on assets was 3.3 percent and return on equity (21.3 percent) compared to 1.7 percent and 10.8 percent respectively in the first half of 2013.
In the year to
Yields in all the maturities rose reflecting in the main the tight monetary policy stance. The yield on the 91-day, 182-day and 364-day bills increased from 12.40 percent, 13.44 percent and 14.54 percent in
Government Fiscal Operations
Provisional data on Government fiscal operations for the first half of 2014 indicate that total revenue and grants increased to D4.12 billion (22 percent of GDP), or 26.0 percent from the corresponding period in 2013. The outturn was also higher than the target of D4.10 billion (21.0 percent of GDP). Domestic revenue, comprising tax and non-tax revenue, amounted to D3.16 billion, higher than the D2.82 billion in the first half of 2013 and the target of D3.14 billion attributed mainly to the 14.0 percent increase in tax revenue. Non-tax revenue, on the other hand, rose by only 2.0 percent.
Expenditure and net lending totaled D4.9 billion (26 percent of GDP), higher than the outturn of D4.2 billion (25 percent of GDP) and the projection of D4.83 billion. Current and capital expenditure rose to D3.3 billion and D1.5 billion compared to D3.0 billion and D1.2 billion respectively in the corresponding period in 2013.
The overall budget balance (including grants) recorded a deficit of D778.5 million (4.0 percent of GDP) which was financed by both domestic and foreign sources.
External Sector Developments
Provisional balance of payments estimates indicate an overall surplus of
The surplus in the services account and the transfers account narrowed to
Volume of transactions in the foreign exchange market decreased to
Consumer price inflation, measured by the National Consumer Price Index (NCPI), declined to 5.4 percent in
At the last MPC meeting in
Monetary policy is forward looking because policy actions take time to work their way through the economy and have their full effect on inflation.
Although headline inflation trajectory has not deteriorated, the MPC sees the risks to the inflation outlook to be skewed to the upside. Apart from weather-related risks, the sharp depreciation of the Dalasi is expected to put upward pressure on inflation as higher import prices would pass-through to domestic consumer prices. In addition, readings of the latest private sector business sentiment survey indicate heightened inflationary expectations which could affect the price behavior of agents in the economy.
Against this backdrop, the MPC has decided to increase the policy rate by 2.0 percentage points to 22.0 percent. The MPC would continue to monitor price developments and take appropriate action.
Hispanic #1 Breaking News for Entrepreneurs, Professionals and Small Business Owners - HispanicBusiness.com
OCTOBER 31, 2014
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