The Governor of the Central Bank of Lesotho, Dr Emmanuel Letete, delivered a cautiously optimistic outlook on global and local economic trends.
Dr Letete said IMF has maintained its global growth projections, signaling resilient economic prospects despite ongoing policy uncertainty. He attributed this to stronger-than-expected front-loading of production and exports, particularly ahead of anticipated U.S. tariffs. “Improved financial conditions and a weaker U.S. dollar have supported global trade and investment flows,” he said.
He further explained that economic growth in the second quarter of 2025 remained generally stable across most major economies. This was largely driven by robust export performance, increased manufacturing activity, and targeted fiscal stimulus—especially in countries like China.
However, Dr Letete also cautioned about lingering downside risks. “Persistent geopolitical tensions, rising effective tariff rates, and fiscal vulnerabilities in key economies may undermine global growth momentum,” he warned.
Lesotho experienced a slight uptick in economic activity in July 2025, primarily driven by growth in the transport and construction sectors. However, this positive momentum was dampened by weak domestic demand and a downturn in manufacturing, attributed largely to declining U.S. textile exports.
According to preliminary data, growth prospects in the medium term remain moderate, with external shocks—particularly those affecting export-oriented industries—expected to pose further challenges.
“Headline inflation rose marginally to 4.6% in August 2025 from 4.4 % in July 2025. This is mainly reflected an increase in food prices due to the supply constraint of wheat. In the near term, inflation is expected to be moderate, amid mixed prices pressure, but the Outlook is balanced”, he said.
The MPC has resolved to maintain the CBL rate at 6.75% per annum, ensuring consistency with current domestic and regional economic conditions.
Additionally, the Committee reaffirmed its commitment to maintaining the Net International Reserves (NIR) target floor at US$840 million, a move critical for supporting the credibility of the loti-rand peg and safeguarding price stability.
Source : Department of Information, PR Unit 24/9/25
