In-Depth Analysis
Lesotho
The kingdom’s economy is heavily dependent on that of South Africa and the US. The primary sector has increased its contribution to GDP through the rise of mining operations since 2004, while the secondary sector has declined due to the clothing and textiles subsector losing competitiveness against Asian peers. The economy has been under pressure of late, largely tied to a dismal performance in South Africa.
Lesotho’s weak economic performance in recent years has left it ill-prepared for the 8.1% estimated contraction in 2020. Furthermore, the expected loss of Agoa membership in 2021 and the introduction of a stricter lockdown at the start of January 2021 will most likely lead to constrained economic recovery in the mountain kingdom. Looking forward, the weak regional performance will also be a drag on economic growth given the uncertain economic recovery in South Africa. Increasing cases of the new more-infectious South African Covid-19 strain could prompt potential hard lockdowns while vaccine rollout is expected to be tepid in 2021. (Source: Lesotho Quarterly Update, published February 2021.)
Macroeconomic Data
(2020)
|
Fiscal Balance (as a % of GDP) |
-9.7 |
|
Consumer Price Index (% change y-o-y, avg) |
5.0 |
|
Current Account Balance (as a % of GDP) |
-5.8 |
|
Real GDP (annual % change) |
-8.1 |
|
GDP per Capita, US$ |
931.2 |
|
Import Cover (months) |
4.7 |
|
Population, million |
2.1 |
| Total External Debt (as a % of GDP) |
49.7 |