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

Author/Editor:

International Monetary Fund. African Dept.

Publication Date:

February 28, 2018

Electronic Access:

Free Full Text (PDF file size is 1757 KB).Use the free Adobe Acrobat Reader to view this PDF file

Summary:

Following the sharp fall in SACU revenues, the fiscal deficit is likely to exceed 6 percent of GDP for the second year. The government has financed the deficit by using its deposits at the Central Bank of Lesotho (CBL), which is the root cause of the sharp drop in the CBL’s international reserves. Political fragility has created a difficult environment for fiscal adjustment. The third government in five years was elected in June 2017 and formed a coalition of four parties. While some progress has been made in political and military reforms laid out by a SADC Commission report after a coup attempt in 2014, building a consensus on the fiscal policy response to the SACU revenue shortfall has been challenging.

Series:

Country Report No. 18/54