In-Depth Analysis
Lesotho
The mountain kingdom is enclosed by South Africa and characterised by high levels of poverty, inequality, and unemployment. The macroeconomy has underperformed amid political uncertainty, high public debt, weak public financial management, inadequate economic diversification, structural impediments, a reliance on fluctuating Sacu revenues, and the dismal performance of the South African economy.
The mountainous enclave signalled a gradual recovery from the Covid-19 pandemic and related containment measures by recording positive economic growth between April and September 2021. This trend is, however, unlikely to have been sustained in Q4 2021. Weak domestic and international demand conditions, foreign travel restrictions, disruptions to global supply chains, the downscaling of textile firms, and rising unemployment are expected to have contributed to weaker economic outcomes. Growth prospects are anticipated to improve over the medium term due to encouraging developments in the agriculture, construction, energy, mining and manufacturing sectors. Potential economic growth is nonetheless weighed down by several developmental impediments, including interminable political instability, policy uncertainty, inadequate sectoral diversification, fiscal constraints, acute socio-economic challenges, and an overreliance on Sacu revenue inflows and traditional trading partners. (Source: Lesotho Quarterly Update, published January 2022.)
Macroeconomic Data
(2021)
|
Fiscal Balance (as a % of GDP) |
-3.1 |
|
Consumer Price Index (% change y-o-y, avg) |
6.0 |
|
Current Account Balance (as a % of GDP) |
-6.2 |
|
Real GDP (annual % change) |
-0.5 |
|
GDP per Capita, US$ |
1,087.3 |
|
Import Cover (months) |
4.16 |
|
Population, million |
2.2 |
| Total External Debt (as a % of GDP) |
47.7 |