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.
Sharp economic contractions are expected in all Southern African Customs Union (Sacu) member states in 2020, and Lesotho is no exception. We expect Lesotho’s real GDP to decline by 7.3% in 2020 and project a slow recovery over the medium term, with risks tilted to the downside. Nevertheless, growth should be underpinned by construction projects linked to Phase II of the Lesotho Highlands Water Project. The Covid-induced shock is expected to place downward pressure on Lesotho’s leading earners of foreign exchange, such as textiles, diamonds, Sacu transfers, and remittances. (Source: Lesotho Quarterly Update, published October 2020.)
Macroeconomic Data
(2019)
|
Fiscal Balance (as a % of GDP) |
-3.1 |
|
Consumer Price Index (% change y-o-y, avg) |
5.2 |
|
Current Account Balance (as a % of GDP) |
-6.0 |
|
Real GDP (annual % change) |
-1.2 |
|
GDP per Capita, US$ |
1,114.8 |
|
Import Cover (months) |
4.3 |
|
Population, million |
2.1 |
| Total External Debt (as a % of GDP) |
45.7 |