Output in the agricultural sector, which on average contributed 6.4 per cent of GDP in 2004, declined significantly in 2005 due to the weak performance of the traditional export crops. Production of bananas, sugar, nutmegs, and cocoa fell sharply. The rate of inflation in the currency union for 2005 has been provisionally estimated at 3.5 per cent.
But the topography of the region, the dispersal of population, transport bottlenecks and law and order conditions in some areas inhibit branch expansion other than in certain commercial centres. Hence, all the stake-holders – banks, state governments and the Reserve Bank – need to work in close co-ordination for increasing banking penetration and promoting financial inclusion in the region.