Central Bank Governor speaks of economic recovery

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By Lineo Ramatlapeng

The Central Bank of Lesotho (CBL) Governor Retšelisitsoe Matlanyane has said the country economy is projected to grow by 4.3 percent in the medium term following the Bank’s 88th monetary policy committee meeting held yesterday, March 30.

She said through a virtual press briefing that the committee is committed to the conduct of its monetary policy in line with the maintenance of macroeconomic stability in the country.

Dr Matlanyane said, “global growth prospects remain weak, uneven and largely dependent on the course of the virus and country progress in vaccinations”.

Matlanyane emphasized the committee considered international, regional and domestic economic developments and financial market conditions, with a view to determining the adequacy of monetary targets.

Since the last MPC meeting, Matlanyane said many countries around the world have rolled out their COVID-19 vaccination programs and others have approved further economic recovery and support measures.

Matlanyane explained that in the Euro Area, real GDP contracted by 5.1 percent in the 4th quarter, after a decline of 5.0 percent in the 3rd quarter.

US real GDP declined at the annual rate of 2.5 percent compared to a 2.8 percent decline in the 3rd quarter, Matlanyane added that in emerging market economies, China realized an annual real GDP growth of 6.5 percent in the 4th quarter compared to 4.9 percent in the 3rd quarter.

In South Africa, Matlanyane mentioned that real GDP declined by 4.1 percent after declining by 6.2 percent in the preceding quarter.

In the medium term, the economy is projected to recover gradually and grow by 4.3 percent in 2021 and at an average rate 5.2 percent over the period 2022-2023 said Matlanyane.

Matlanyane said that in the last quarter of 2020, domestic labour market conditions remained weak in all the 3 sectors that are monitored by the bank and it was because of COVID-19 lockdown restrictions.

“The government budgetary operations recorded a fiscal surplus equivalent to 11.9 percent of GDP during the 3rd quarter of 2020/21, as opposed to a revised fiscal deficit of 2.7 percent of GDP in the 2nd fiscal quarter of 2020/21,” Matlanyane added.

“The surplus indicated relatively higher collection of tax revenue,” said Matlanyane.

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