[ad_1]
In the central bank’s quarterly Monetary Policy Committee (MPC) meeting held on Tuesday (August 27, 2024), Governor Buah Saidy released the central bank’s latest findings on the country’s economy. He said that in terms of domestic price trends, the deflationary process that began four months ago continues to consolidate. The governor said: “In July 2024, the headline inflation rate declined to 9.7% from 14.9% in March 2024. The decline in inflation rates was broad-based, with both food and non-food inflation rates declining.”
Specifically, he noted: “Food inflation declined to 13.0% in July 2024, from 14.4% in June 2024 and 20.3% in March 2024. The decline in food inflation reflects a moderation in the main components of the food basket, including deceleration in the price indices of bread and cereals, fish, vegetables, fruits and nuts. Non-food inflation was 5.5% during the review period, unchanged from the June 2024 figure but lower than the 8.7% reported in March 2024.”
The Governor further analyzed that the central bank’s core inflation measure (excluding volatile energy and food) also declined during the review period. “This suggests that underlying inflationary pressures in the domestic economy are easing,” he reasoned. “The inflation outlook remains encouraging, with headline inflation expected to decline to close to the central bank’s target by the end of 2024, barring further surprises in international commodity prices.”
Although international food prices have also been falling in recent months, the central bank has proactively set this target to hedge against volatility.
“The FAO Food Price Index shows that international food prices declined in July 2024, down 0.7% from June 2024 and 3.1% from the same period last year,” said the Monetary Policy Committee report read out by Governor Saidi. “This slowdown was due to a decline in the cereal price index, which offset the increase in the vegetable oil, meat and sugar indices.
“In addition, the average international rice price fell for the third consecutive month in July 2024, mainly due to weak demand and expectations that India may revise its rice export restrictions. The FAO Rice Price Index fell 2.4% from June 2024 to its lowest level in 12 months.”
Coming back to the domestic front, the Gambian economy was said to continue to perform “robustly in the second quarter of 2024 with encouraging signs” in the fight against inflation.
Citing data recently released by the Gambia Bureau of Statistics (GBoS), the MPC report shows that the Gambia economy will grow by 4.8% in 2023, compared with a revised growth rate of 5.5% in 2022. “Growth was mainly driven by a recovery in the services and industrial sectors, reflecting the boom in private and public construction activities,” the report noted.
In light of recent developments outlined in the MPC report, the Committee concluded that monetary policy should remain on track to support the path toward deflation, or falling prices.
Therefore, the Monetary Policy Committee made the following policy decisions: the monetary policy rate (MPR) remained at 17.0%; the reserve requirement ratio (RR) of commercial banks remained at 13.0%; the standing deposit rate “remained unchanged at 3.0%”, and the standing lending rate remained at 18.0% or MPR plus 1.0 percentage point.
“The committee will continue to monitor developments in the domestic and global economies to determine next policy steps,” the governor said.
[ad_2]
Source link
