Kingdom of Lesotho: 2025 Article IV Consultation-Press Release; and Staff Report

Lesotho has long struggled with low growth, high unemployment, and widespread poverty. The country’s government-led growth model has resulted in an economy heavily reliant on inefficient public spending, with a small and undiversified private sector that has been stifled by restrictive regulations and lack of access to finance. This has led to low private investment, declining competitiveness, and high informality. In office for almost three years, the government’s fragile coalition has struggled to pass any meaningful reform through Parliament.