Banjul, Gambia (PANA) - Bakary K. Jammeh, governor of Central Bank of The Gambia, Tuesday projected the country’s economic growth at -1.2 per cent in 2020, reflecting the impact of the coronavirus (COVID 19) pandemic.
“The Central Bank's composite index of economic activity (CIEA), which is a statistical measure of aggregate economic activity, shows a marked slowdown in the second quarter of 2020, reflecting weaker demand.
“The indicators for both foreign and domestic demand weakened due to the impact of the pandemic,” he said at a briefing of commercial bank managers at the Monetary Policy Committee meeting here Tuesday.
He added: “According to the business sentiment survey conducted by the Bank in the second quarter of 2020, majority of respondents reported that risks to the outlook remain elevated across all sectors due to the COVID-19 pandemic. Majority of the firms also reported lower capital expenditure, sales and employment.”
Jammeh pointed out that the preliminary balance of payments estimates for the first six months of 2020 indicated that the current account balance worsened to a deficit of US$62.9 million (3.5 per cent of GDP) from a deficit of US$23.9 million (1.4 per cent of GDP) in the corresponding period of 2019.
“This reflects wider trade deficit and a decline in the service account balance,” he said.
Jammeh also said the goods account balance was estimated at a deficit of US$278.5 million (16.2 per cent of GDP) in the first six months of 2020, compared with a deficit of US$194.4 million (11.0 per cent of GDP) in the corresponding period in 2019.
He stated that the widening of the deficit in the goods account mainly reflected the increase in imports and a fall in exports, especially re-exports in the second quarter of 2020.
“From January to June 2020, imports amounted to US$336.4 million, higher than US$275.5 million in the same period in 2019. Exports decreased to US$52.1 million in the first six months of 2020 from US$70.1 million in the corresponding period of 2019.
"The surplus in the services account declined to US$38.3 million, or by 31.5 per cent in the first six months of 2020 from US$55.9 million in the same period a year ago,” he said.
Jammeh further revealed that the gross international reserves stood at US$306 million, equivalent to over five months of next year's imports of goods and services, adding that the total foreign assets of the bank amounted to US$325.4 million in August 2020.
“The supply conditions in the foreign exchange market continue to be favourable and the dalasi remains stable, supported by the higher-than-expected increase in private remittances and the steady inflow of official transfers.
“The volume of transactions in the foreign exchange market increased to US$2.14 billion in the12 months to end-July 2020 from US$2.12 billion in the corresponding period of the previous year,” he said.
According to the governor, purchases of foreign currency (indicating supply) increased by 0.1per cent to US$1.06 billion during the period, adding that, similarly, sales of foreign currency, which indicates demand, also increased by 1.5 per cent to US$1.07 billion in the review period.
Jammeh stated that the exchange rate remained stable during the review period.
“The dalasi has benefited from the implementation of prudent policies, higher inflows of private remittances and official inflows from our development partners. Remittances totalled US$307 million from January to July 2020.
“This trend is expected to continue for the remainder of 2020. From January to July 2020, the dalasi depreciated against the US dollar by 1.4 per cent and euro by 4.6 per cent but appreciated against the pound sterling by 1.1 per cent for Fiscal Operations,” he announced.
-0- PANA MSS/RA 1Sep2020