Gambia, The PPP Conversion Factor

The Gambia’s purchasing power parity (PPP) conversion factor has risen dramatically from 2.36 in 1990 to 17.46 in 2025, marking both the all‑time trough and the current peak over a 36‑year span. This more than seven‑fold increase reflects sustained real‑exchange‑rate appreciation and higher domestic price levels relative to the U.S. dollar, positioning the country at rank 74 globally. By contrast, Mauritius records a slightly higher factor of 17.67, while Afghanistan lags at 14.57, underscoring the Gambia’s relative progress among comparable economies. The steep upward trajectory began in the early 2000s as structural reforms and modest fiscal consolidation reduced inflationary pressures, and it accelerated after 2015 when external debt relief and modest growth in services boosted domestic consumption. If inflation remains contained and export diversification strengthens, the PPP conversion factor is likely to stabilize near its 2025 high; however, a resurgence of imported inflation or currency depreciation could reverse the trend and pull the index toward earlier levels.