Country Report The Gambia January 2011

Outlook for 2011-12: Economic growth

Recent estimates from the IMF indicate that real GDP grew by around 5.6% in 2010. This was driven mainly by strong growth in agriculture, which accounts for about one-third of GDP. Agricultural growth is expected to remain robust in 2011-12 as the government sustains its recent efforts to support the sector. The potential here is enormous as a significant share of arable land is uncultivated and yields for most crops are well below their global averages. For example, yields for the country's main cash crop, groundnuts, are just over one-half of the world average, according to the UN Food and Agriculture Organisation.

Contrary to trends in agriculture, the recovery in tourism-which accounts for about 16% of GDP-will falter as economic growth in The Gambia's main market for tourism, the EU, dips from 1.7% in 2010 to 1.1% in 2011 and 1.5% in 2012. Manufacturing, which accounts for a tiny share of GDP, will remain small and uncompetitive, partly because of poor infrastructure. Overall, real GDP is forecast to grow by 5.3% in 2011 and 5.5% in 2012. There are two main risks to this forecast: growth in agriculture would decline if the rains were to fail (cultivation is mostly rain-fed); and tourist arrivals would fall dramatically in the event of a coup.

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