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.
Following several years of economic recession, Lesotho’s economy contracted sharply last year as mining and textiles were hurt by frail external demand and containment measures affecting the domestic economy. Lockdowns also disrupted major infrastructure projects such as the LHWP II. The economy should experience some reprieve over the next few years as the scaling up of capital projects, such as the LHWP II and the Lowlands Water Project, will result in higher real GDP growth. As a result of somewhat disappointing data for Q2, we have slightly lowered our economic growth forecast for this year to 2.4%, from 2.5% previously. (Source: Lesotho Quarterly Update, published October 2021.)
Macroeconomic Data
(2020)
|
Fiscal Balance (as a % of GDP) |
0.5 |
|
Consumer Price Index (% change y-o-y, avg) |
5.0 |
|
Current Account Balance (as a % of GDP) |
-7.0 |
|
Real GDP (annual % change) |
-9.7 |
|
GDP per Capita, US$ |
876.2 |
|
Import Cover (months) |
4.58 |
|
Population, million |
2.1 |
| Total External Debt (as a % of GDP) |
52.8 |