In-Depth Analysis
Lesotho
The Mountain Kingdom's sometimes disruptive political dynamics are a perennial concern. The economy is not highly developed and is immeasurably volatile to economic and political developments in exchange-rate-pegged South Africa.
The mountain kingdom’s economy has been under pressure for several years and prospects are forecast to deteriorate even further in the short term. Real GDP is expected to contract by 3.7% in 2020, compared to our previous forecast for a 1.7% expansion. The revision reflects the massive impact of the recent global outbreak of Covid-19. The expected recession in the global economy in 2020 presents great uncertainty for the mountain kingdom. Disrupted global supply chains and the deteriorating performance of the South African economy will weigh on Lesotho’s economic outlook. We expect Southern African Customs Union revenue – a key source of government income – to reduce as countries bravely attempt to stave off the rapid spreading of the virus. Meanwhile, Lesotho’s political landscape plunged headlong into yet another crisis in recent months, with Prime Minister Thomas Thabane still facing murder charges related to his ex-wife, while further having to face a possible vote of no confidence which will cut his term in office short. (Source: Lesotho Quarterly Update, published April 2020.)
Macroeconomic Data
(2019)
|
Fiscal Balance (as a % of GDP) |
-3.2 |
|
Consumer Price Index (% change y-o-y, avg) |
5.2 |
|
Current Account Balance (as a % of GDP) |
-3.7 |
|
Real GDP (annual % change) |
-1.2 |
|
GDP per Capita, US$ |
1,102.7 |
|
Import Cover (months) |
4.3 |
|
Population, million |
2.1 |
| Total External Debt (as a % of GDP) |
46.2 |