In-Depth Analysis
Lesotho
The Mountain Kingdom's sometimes disruptive political dynamics are a perennial concern. The economy is not highly developed and remains highly dependent on neighbouring South Africa.
Real GDP is estimated to have grown by 0.8% in 2018, following another year of disappointing regional economic expansion. The mountain kingdom’s economic performance was mixed throughout the year, but managed to improve during the third quarter of 2018. The upturn in Q3 was underpinned by a positive performance in the manufacturing sector where employment in local firms grew at a steady pace. Lesotho’s economic prospects in the near term suggest an uptick in real economic activity, we believe the economy is set to grow by 2.9% in 2019. This optimism is backed by growth in the primary sector stemming from commercial operations in mining and construction activities associated with Phase II of the Lesotho Highlands Water Project (LHWP). Construction of the Polihali dam is expected to kick into full gear this year, which will more than likely boost growth in the short to medium term. In turn, mining’s contribution to GDP is expected to grow on the back of ongoing mining developments, with major mines set to reach full production capacity over the next few of years. (Source: Lesotho Quarterly Update, published January 2019.)
Macroeconomic Data
(2018)
|
Fiscal Balance (as a % of GDP) |
-6.6 |
|
Consumer Price Index (% change y-o-y, avg) |
4.8 |
|
Current Account Balance (as a % of GDP) |
-3.1 |
|
Real GDP (annual % change) |
0.8 |
|
GDP per Capita, US$ |
1,209.5 |
|
Import Cover (months) |
3.5 |
|
Population, million |
2.3 |
| Total External Debt (as a % of GDP) |
39.8 |