Macroeconomic Performance
Table 1: Overview of some macroeconomic indicators
The Gambia recorded a GDP growth of 5.6 per cent in 2023, up from 4.9 per cent in 2022, on the back of improved growth in agricultural output, supported by favourable rainfall patterns, a rebounding tourism sector and improved remittances. Average inflation increased to 17.0 per cent in 2023 from 11.5 per cent in 2022, spurred by price increases in education (an average of 56% year-on-year), fuel, utilities and food prices. Fiscal balance improved to -3.0 per cent of GDP in 2023, from -4.9 per cent of GDP in 2022, with public debt also easing to 71.7 per cent of GDP over the period, compared to 82.9 per cent of GDP in 2022. Current account balance also improved to -4.1 per cent of GDP in 2023, from -4.2 per cent of GDP in 2022.
Outlook
Economic activity is projected to grow by 5.9 per cent in 2024, stabilising around that figure in 2025. This is on the back of a continuous recovery of the tourism sector, an improvement in agriculture output and remittance-fuelled private sector demand. Average inflation is projected to remain elevated, even though decelerating to 15.5 per cent in 2024 and further to 13.1 per cent in 2025. Fiscal balance is projected to decline consistently from -2.6 per cent of GDP to -1.3 per cent of GDP in 2024 and 2025, respectively, with the debt-to-GDP ratio falling below the 70 per cent convergence threshold for the first time in a long while. Public debt is projected to end 2024 at 64.3 per cent of GDP, declining further to 59.7 per cent of GDP in 2025. Current account balance is projected to experience an uptick to -5.5 per cent of GDP in 2024 and decline to -4.0 per cent in 2025.
Probable Headwinds
Given that tourism and remittances are key elements of The Gambian economy, any glitches in feeder economies could have catastrophic consequences for the economy. Climate change remains a constant threat to agricultural output. If any of these risks should crystalise, The Gambia’s economy could face serious challenges. Furthermore, The Gambia could suffer from Mali’s decision to exit the Community, given its level of exports to Mali.