Mr.Buah Saidy, Governor Central Bank of The Gambia has emphasized that his office has maintained the Monetary Policy Rate at seventeen percent ( 17 %) gearing towards sustaining the declining trend in domestic inflation.
He made the reevaluation at the Central Bank of The Gambia, Monetary Policy Committee (MPC) press and commercial bank managers briefing on Thursday.
According to him, global economic growth has lost momentum since the last MPC meeting in August of this year, with a slowdown in the manufacturing, trade, and services sectors, noting that this is attributed to the still-elevated inflation, high borrowing costs, moderate growth prospects in China, and intensified geopolitical tensions.
“In October 2023, the International Monetary Fund (IMF) maintained global growth forecast for 2023 at 3.0 percent but revised downwards the growth forecast for 2024 by 0.1 percentage points. Moreover, there are still significant headwinds that continue to cloud this outlook, including the impact of geo-economics’ fragmentation and heightened geopolitical tensions on international trade.
Global inflation continues to decelerate, driven by the tight monetary policy stance of central banks around the world and the continued easing of global commodity prices. The IMF forecast global headline inflation to decline from 8.7 percent in 2022 to 6.9 percent in 2023, before dropping further to 5.8 percent in 2024,” he disclosed
However, he added that this represents an upward revision of 0.1 percentage points from the July 2023 forecast and this suggests that while disinflation is in progress in many countries, the pace is slow, keeping inflation above central banks’ targets longer than anticipated.
He noted, that in this regard, monetary policy may remain tight in many countries longer than previously anticipated.
“International commodity prices fell in October 2023, driven by the combined effects of weak global demand and improved supply conditions. The IMF All Commodity Prices Index declined 3.9 percent from September to October 2023. Crude oil prices are declining despite production cuts by OPEC countries and the adverse developments in the Middle East.
From September to October 2023, crude oil prices fell by 4.8 percent, mirroring weaker demand and improved supply conditions from non-OPEC countries,” the Governor further disclosed.
He pointed out that prices dropped in the international food commodities market, reaching their lowest in over two years in October this year, adding that the FAO Food Price Index fell by 0.5 percent (month-on-month) in October 2023, reaching 10.9 percent below its level in the same period a year ago.
According to him, the fall in global food prices is attributed to the decline in the prices of cereals, sugar, vegetable oil, and meat prices, adding similarly, the FAO Rice Price Index fell by 2.0 percent from the previous month.
However, the Index is 24.0 percent above its level in the corresponding period a year ago. As a major rice importer, the fall in international rice prices is a welcomed development for the Gambia in the fight against inflation, he said.