PESA Editorial on Lesotho: 1H2023/24

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Lesotho’s economy has had a mixed recovery from the global shocks caused by the COVID-19 pandemic in 2020 and the Russia-Ukraine conflict in 2022. The Central Bank of Lesotho (CBL) does not have an explicit inflation target and utilises an exchange rate targeting monetary policy framework by maintaining foreign exchange reserves to defend the LSL peg to the ZAR. The Government of Lesotho has followed procyclical fiscal policy by reducing government spending during economic downturn and increasing public spending during economic recovery. Lesotho’s external sector has not recovered from the global shock caused by the COVID-19 pandemic in 2020 and has not benefited from the higher commodity prices in the aftermath of the Russia-Ukraine conflict in 2022. Lesotho held its most recent national elections in October 2022. Lesotho is grappling with ongoing political instability, fuelled by long-standing divisions within the ruling ABC. Read more accurate and balanced analysis of the political economy in Lesotho here: https://politicaleconomy.org.za/2023/12/pesa-editorial-on-lesotho-1h2023-24/.