Kingdom of Lesotho: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Kingdom of Lesotho

IMF Staff Country Reports, February 28, 2018

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Canonical URL: Kingdom of Lesotho: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Kingdom of Lesotho

High levels of unemployment, poverty, and inequality persist in Lesotho despite faster growth compared with regional peers over the last decade.
GDP growth is expected to be about 3 percent in FY2017/18, below the average of 4.1 percent for the past decade.
Over the next three years, GDP growth is expected to be led by mining and construction related to the Lesotho Highlands Water Project Phase II.
A steep decline in Southern African Customs Union transfers, a major source of government revenue, will result in a fiscal deficit that is likely to exceed 6 percent of GDP for the second year.

FY2017/18 GDP growth: about 3 percent.
Past-decade average GDP growth: 4.1 percent.
Short-term growth drivers: mining and agriculture.
Medium-term growth drivers (next three years): mining and construction related to Lesotho Highlands Water Project Phase II.

Major revenue shock: steep decline in Southern African Customs Union (SACU) transfers.
Fiscal impact: fiscal deficit likely to exceed 6 percent of GDP for the second year.
Fiscal policy themes identified in subject keywords: Fiscal consolidation, Fiscal policy, Expenditure, Revenue administration, Public financial management (PFM), Wages.