flag Lesotho Lesotho: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Lesotho's economy has been consistently deteriorating for about a decade. Structural bottlenecks, a weak regional environment, climate shocks and the outbreak of the Covid-19 contributed to this prolonged recession (IMF). Economic growth rebounded in 2021 (2.1% GDP), but stagnated in 2022 (2.1% GDP) in the context of weaker external demand, South Africa’s energy crisis and the spillovers from the war in Ukraine. Growth remains largely dependent on South Africa's economic recovery and uneven foreign investment in infrastructure mega-projects (IMF). The IMF forecasts economic growth to remain subdued at 2.2% in 2023 and 2.3% in 2024. More optimistically, the World Bank forecasts economic activity to pick up to 2.6% in 2023 and 3.1% in 2024, underpinned by the construction (particularly Phase II of the Lesotho Highlands Water Project), agriculture, services and mining sectors.

Lesotho's economy was already facing challenges when it was further hit by the Covid-19 pandemic, declining revenues from the Southern African Customs Union (SACU), the spillovers from the war in Ukraine and major flooding. Nonetheless, contained expenditures and increased revenues helped fiscal deficit reduce from -4.4% GDP in 2021 to -3.4% GDP in 2022, and according to IMF estimates a surplus of 2.5% GDP will be achieved in 2023, and 8.4% GDP in 2024. Public debt slightly increased from 56.4% GDP in 2021 to 57.9% GDP in 2022, and it is expected to reach 58.5% GDP in 2023 before declining to 57.3% GDP in 2024 (IMF). Considered sustainable by the IMF, it should remain below the SADC convergence criterion of 60% GDP. The public debt is mostly external and concessional, and relies on international lenders. If Lesotho’s fiscal performance was better than expected, its external position weakened. The war in Ukraine hindered food imports and raised commodity prices, exacerbating agricultural disruptions due to floods and the pandemic (IMF). Inflation increased from 6% in 2021 to 8.2% in 2022, and though declining it is expected to remain high at 6.8% in 2023 and 5.5% in 2024 (IMF). The priority of the new coalition government lead by the businessman Sam Matekane is to enhance economic growth and build resilience through economic transformation from a consumer-based economy to a producer and export-driven economy. Fiscal discipline, structural reforms to restore macro-fiscal stability and consolidate public financial management are the priorities.

Poverty and strong inequalities plague Lesotho’s social environment. Indeed, according to the World Bank, unemployment rate amounted to 18.3% in 2021 and according to national poverty lines, more than a third of the population lives in poverty. In terms of human development, the country is ranked 168th out of 191 countries in the Human Development Index published by UNDP.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 2.462.372.522.652.77
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 1,1661,1101,1671,2121,248
General Government Gross Debt (in % of GDP) 59.961.360.460.360.7
Inflation Rate (%) n/a6.
Current Account (billions USD) -0.20-0.07-0.12-0.24-0.21
Current Account (in % of GDP) -7.9-3.1-4.7-9.0-7.4

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data

Monetary Indicators 20162017201820192020
Lesotho Loti (LSL) - Average Annual Exchange Rate For 1 GBP 19.8617.1617.6718.1321.12

Source: World Bank - Latest available data.


Main Sectors of Industry

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 30.0 34.9 35.1
Value Added (in % of GDP) 3.5 24.9 49.6
Value Added (Annual % Change) -25.6 3.5 0.8

Source: World Bank - Latest available data.


The Active Population in Figures

Labour Force 962,776974,540967,513

Source: International Labour Organization, ILOSTAT database

Total activity rate 69.75%69.82%69.87%
Men activity rate 76.80%76.75%76.67%
Women activity rate 62.74%62.91%63.08%

Source: International Labour Organization, ILOSTAT database


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Country Risk

See the country risk analysis provided by Coface.


Indicator of Political Freedom


The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Partly Free
Political Freedom:

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House


Indicator of Freedom of the Press


The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:

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Sources of General Economic Information

Main Online Newspapers and Portals
Lesotho Newspapers and News Sites
Allafrica, Lesotho News
Afrol, News Lesotho
Public Eye
Lesotho Times
Sunday Express
The Post
Lesotho BBC Media Profile
Useful Resources
Ministry of Finance
Ministry of Water (website temporarily unavailable)
Ministry of Mining
Central Bank

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Latest Update: December 2023

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