The Central Bank of The Gambia has decided to maintain the Monetary Policy Rate (MPR) at 14 percent following its latest Monetary Policy Committee (MPC) meeting in Banjul, reflecting a cautious stance amid rising global uncertainty and emerging domestic inflationary pressures.
The decision was informed by a mixed economic environment. Globally, the outlook has weakened as geopolitical tensions, elevated energy prices, and policy uncertainty continue to weigh on growth and inflation dynamics. The International Monetary Fund (IMF) projects global growth to moderate to 3.1 percent in 2026, with inflation expected to rise temporarily due to higher oil and transport costs linked to ongoing conflicts and supply disruptions. These developments are particularly important for import-dependent economies like The Gambia, where global price shocks quickly translate into domestic inflation.
Despite these external challenges, the domestic economy remains broadly resilient. Economic activity in The Gambia has been supported by strong performance in tourism, construction, trade, and financial services. The Central Bank estimates GDP growth at 5.7 percent in 2026, even after a slight downward revision. Remittance inflows, improving foreign exchange liquidity, and stable tourism earnings continue to provide critical buffers against external shocks.
However, inflationary pressures are re-emerging. Headline inflation rose to 7.0 percent in April 2026, driven by increases in both food and non-food prices. More concerning for policymakers is the rise in core inflation, which suggests that underlying price pressures are becoming more persistent rather than temporary. This trend is reinforced by higher global commodity prices, particularly oil, which has surged significantly in recent months.
External sector developments also highlight vulnerabilities. The current account deficit widened in early 2026 due to rising import demand, especially for fuel, cereals, and machinery. Although exports and remittances have improved, they have not fully offset the growing import bill. At the same time, government domestic debt has edged higher, and money supply growth has accelerated, reflecting increased credit to the private sector and tighter liquidity conditions.
The banking sector, however, remains stable, with strong capital adequacy and high liquidity ratios, while non-performing loans have declined. Digital financial services and mobile money transactions are also expanding rapidly, supporting financial inclusion.
Against this backdrop, the Central Bank opted to maintain the MPR at 14 percent, along with unchanged reserve and standing facility rates. This signals a continued commitment to price stability while avoiding premature tightening or easing. The policy stance reflects a careful balancing act: supporting growth while containing inflation risks.
Overall, the decision underscores a cautious monetary policy approach aimed at anchoring inflation expectations and preserving macroeconomic stability in an increasingly uncertain global environment.
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