Economics & Development

Despite sustained growth since the democratic transition, The Gambia continues to face significant macro-fiscal and development challenges. Real GDP growth averaged 4.7 percent in 2019–24, up from 2.6 percent in 2007–16, reflecting improved macro‑fiscal management and external support. However, poverty reduction and per capita income gains have remained limited, constraining the translation of growth into domestic revenues. Weak growth in per capita income has constrained fiscal revenues by narrowing the income tax base, depressing consumption-driven VAT revenues, and expanding the informal sector, thereby limiting fiscal space for core public services and infrastructure. While structural shifts in sectoral allocation have boosted labor productivity growth, several structural constraints are hampering total productivity growth and, consequently, transformation of the economy.