## 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_

## Source details

**Canonical URL:** [Kingdom of Lesotho: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Kingdom of Lesotho](https://www.imf.org/en/publications/cr/issues/2018/03/01/kingdom-of-lesotho-2017-article-iv-consultation-press-release-staff-report-and-statement-by-45653)

## Other formats

- [Markdown version](/en/publications/cr/issues/2018/03/01/kingdom-of-lesotho-2017-article-iv-consultation-press-release-staff-report-and-statement-by-45653/index.md)
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## Bibliographic details
- Published: February 28, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484343289.002

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### Summary and key findings
- 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.

### Growth projections and drivers
- 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.

### Fiscal outlook and risks
- 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.

### Structural and labor issues
- Persistent structural challenges: unemployment, poverty, inequality.
- Labor-related focus: Labor and Wages listed among subjects and keywords.

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## Content in this bundle

- **Country Report**
  - [Country Report (Markdown version)](/-/media/files/publications/cr/2018/cr1854.pdf.md){rel="alternate" type="text/markdown"}
  - [Country Report (PDF)](/-/media/files/publications/cr/2018/cr1854.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2018/03/01/kingdom-of-lesotho-2017-article-iv-consultation-press-release-staff-report-and-statement-by-45653_