The National Consumer Price Basket saw a marginal 2.9 per cent increase the Consumer Price Inflation from 6.8 per cent at the end of December 08 to 7 per cent at the end of January 09 according to recent data released by the Gambia Bureau of Statistics.
At the end of January 2009, CPI for some West African economies remained in double digits. Ghana’s CPI stood at 19.86 per cent while CPI in Nigeria and Sierra Leone is currently 14.03 per cent and 13.21 per cent respectively. Evidently, most economies in the sub-region had missed the single-digit target at the end of December 2008.
In Gambia, food prices continued to dictate the increase in the national price basket. On a year-on-year basis, food prices accelerated from 8.61 per cent in Dec 08 to 8.81 per cent at the end of Jan 09. This compares unfavourably with a decline from 9.45 per cent at the end of Jan 07 to 8.61 per cent in Jan 08.
On a month-on-month basis, food prices increased by 0.24 per cent at the end of Jan 09 from a marginal 0.05 per cent at the end of Dec 08. Non-food prices recorded a 4.77 per cent budge from 1.32 per cent at the end of January 08 (y/y); comparing negatively with a 4.33 per cent swell from 2.14 per cent at the end of Jan 08 and Jan 07 respectively. Month-on-month figures saw Non-food prices for Jan 09 inch-up to 0.42per cent from 0.24 per cent from 0.04 per cent at the end of Jan Dec 08 and Dec 07 respectively.
Outlook
The inch-up in the Consumer Price Inflation from 6.8 per cent at the end of Dec 08 to 7 per cent at the end of Jan 09 has been largely as a result of scanty increases in food prices though the strength of the Dalasi has provided some insulation to avert a protracted sharp increase.
The 2009 Budget Summary has highlighted a single digit inflationary target. Consequently, we maintain that the move towards the safeguarding, if not reducing the current single-digit inflation of seven (7) per cent remains attainable.
However, in the conduct of both monetary and fiscal policy, there is the need for the Central Bank to maintain a highly disciplined approach. Given the current global downturn, care must be taken in order not to expose the national price basket to the hikes in global food prices; no matter how inevitable such exposures may be. We are confident that the CPI (y/y) for February 09 will see a minor decline.
This isagainst the back drop of gains in the Dalasi against its major trading currencies; particularly the Dollar. In the event of this, import costs should ease down and transmit some downward revision in both food and non-food prices.
