By: Fatou Krubally & Esi EJOH
The Monetary Policy Committee (MPC) of the Central Bank of The Gambia (CBG) has decided to maintain the Monetary Policy Rate (MPR) at 17 percent, according to the CBG’s official press release following its meetings held on June 11 and 12, 2025.
According to the Central Bank, the decision was based on a comprehensive review of recent global and domestic economic developments, with specific focus on inflation trends and risks to macroeconomic stability.
The CBG stated that the global economy continues to face a slow and uneven recovery, citing heightened trade fragmentation, increasing debt vulnerabilities, and climate-related supply disruptions. The IMF’s April 2025 World Economic Outlook, referenced in the press release, downgraded global growth to 2.8 percent for 2025, compared to 3.2 percent in 2024.
The Bank added that while global inflation is moderating, the pace of decline is slow. It cited the IMF’s projection of 4.3 percent global inflation in 2025, down from 5.8 percent in 2024, but noted that core inflation remains persistent due to wage and service sector pressures.
The CBG also warned that global trade is expected to remain subdued, with the IMF projecting growth of only 1.7 percent in 2025. The Bank attributed this to rising protectionism, trade barriers, and logistical challenges, particularly affecting low-income countries.
The press release further noted that commodity markets remain volatile. Brent crude oil prices fell to US$64 per barrel in May 2025 the lowest since the COVID-19 pandemic while the FAO Food Price Index fell 0.8 percent month-on-month in May. Despite that, food prices remain higher than a year ago, with rice prices rising 1.4 percent.
Domestically, the CBG reported that The Gambia’s real GDP grew by 5.3 percent in 2024 and is forecast to expand by 6.5 percent in 2025. The Bank credited this to growth in services, telecommunications, and infrastructure, though agriculture declined by 1.1 percent due to poor weather.
According to the CBG, inflation in The Gambia has begun to ease. Headline inflation declined to 8.1 percent in April 2025, from 9.1 percent in March. Food inflation dropped to 8.8 percent, while non-food inflation eased to 7.4 percent. However, core inflation increased to 6.9 percent, reflecting underlying pressures.
The MPC also noted improvements in the balance of payments. The current account deficit narrowed to US$13.2 million in Q1 2025, driven by higher tourism earnings and remittances. Foreign exchange market activity increased to US$670.1 million, while remittance inflows rose to US$207.9 million, with the U.S. accounting for 26.3 percent.
The CBG stated that the Dalasi remained relatively stable, depreciating modestly against the dollar (1.7%) and other major currencies, but appreciating against the Euro by 1.2 percent. Foreign reserves stood at US$508.5 million at end-May 2025, covering more than 4.6 months of imports.
On fiscal matters, the Bank reported that the budget deficit (excluding grants) fell to D2.7 billion in Q1 2025, compared to D4.6 billion a year earlier. Revenue and grants increased by 14.5 percent to D8.8 billion, while spending remained broadly stable.
The stock of domestic debt dropped slightly to D45.6 billion in March 2025, with short-term instruments comprising nearly half. The weighted average treasury bill rate increased to 14.6 percent, up from 11.3 percent in 2024.
According to the CBG, the banking sector remains stable and resilient. Total assets grew to D107.6 billion by March 2025, while deposits rose to D67.5 billion. Non-performing loans improved to 13.5 percent, and capital and liquidity ratios remained strong.
Finally, the CBG reported that money supply grew by 11.3 percent in March 2025, up from 9.4 percent a year earlier, driven by net foreign assets. Private sector credit grew by 15.1 percent, while reserve money declined slightly by 0.7 percent.
