According to the World Bank (WB) report on The Gambia’s Economic Update, inflation is projected to increase and reach 8% in 2022, as global supply disruptions and high commodity prices are expected to continue.
The report highlighted that since last year, these disruptions have been the main factor behind the persistent increase in inflation, primarily food inflation, adding rising food prices will remain a burden for vulnerable households thereby constraining their ability to escape poverty. The report further stated that the annual inflation will start falling in 2024, but will remain relatively high.
Calling for cautious monetary policy tightening, the report states that “elevated inflation amid a nascent economic recovery underscores the need for the Central Bank of The Gambia (CBG) to gradually wean the economy off the accommodative monetary policy in place since the onset of the pandemic.”
“The CBG continues to adjust its foreign exchange purchases, partly to mop up liquidity. As inflationary pressures build-up, it plans to continue the sale of CBG bills and increase the special deposit facility rate to effectively mop up excess liquidity and ensure attainment of the target inflation rate of 5% by 2025.”