Lesotho’s economic stability has improved, with inflation decreasing to approximately six percent and projections indicating a further drop to 5.4 percent for the 2025/26 fiscal year.
Speaking at a post-budget gala dinner on Thursday, independent economist Dr Ratjomose Machema said this decline in inflation suggests an improved cost of living, likely to benefit private consumption.
He also highlighted that while Lesotho’s gross domestic product (GDP) growth rate has remained between 1.2 and 1.4 percent over the past two to three years, it is expected to rise significantly to 3.4 percent in 2025/26.
“Much of this growth is attributed to the construction sector, which is forecasted to expand by 22.5 percent in 2025/26 and 30 percent in the following year before experiencing a decline of 8.5 percent,” Dr Machema stated.
He further pointed out that Lesotho’s economy is largely influenced by external factors, with large-scale projects playing a key role in driving economic growth.
These insights followed the presentation of the 2025/26 fiscal budget earlier that day by the Minister of Finance and Development Planning, Dr Retšelisitsoe Matlanyane, in the National Assembly.
The post-budget gala dinner was hosted by the Revenue Services Lesotho (RSL) and Nedbank Lesotho.
At the same occasion, RSL Commissioner ‘Mathabo Mokoko stated that the budget shapes the fiscal landscape within which they operate.
She underscored RSL’s commitment to renewing its social contract with taxpayers and stakeholders by enhancing service delivery through digital solutions, ensuring compliance efficiency, and eliminating service bottlenecks.
“We commit to doing everything in our power to fight corruption and invest in our employees’ well-being to guarantee a sustainable source of government financing, ultimately improving the livelihoods of our people,” Mokoko said.
She also stressed the importance of maintaining professional integrity and ethical standards, noting RSL’s plans to institutionalise a cadet programme as part of its long-term vision.
Additionally, she encouraged strengthened partnerships between the government, financial institutions like Nedbank Lesotho, and the broader business community to drive economic progress.
Meanwhile, Dr Matlanyane expressed optimism about Lesotho’s economic trajectory, noting that significant improvements have been made.
“When we first took office, the economy was in disarray, but we have now achieved stability. Our primary goal was to stabilize the economy, secure some gains, and build resilience,” she said.
She also highlighted the government’s success in controlling inflation and managing the national debt to ensure the country remains financially sustainable.
With these developments, Lesotho is poised for economic growth and enhanced financial stability in the coming years.
