[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111256-en":3,"doc-seo-111256-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},111256,1649267921044,"Ava Thompson","https://us-avatar.wpscdn.com/avatar/1800007509477c92dfb?_k=1782875107921204101",8,"Research & Report","Kingdom of Lesotho - Joint Bank-Fund Debt Sustainability Analysis - External and Overall Risk Assessment","Joint Bank-Fund Debt Sustainability Analysis for the Kingdom of Lesotho evaluates the risk of external and overall debt distress under a baseline and extreme shock scenarios. The results show moderate risk overall, with a slight improvement in the debt path since the prior DSA, driven by lower total debt at end FY2024/25, arrears clearance, stronger domestic debt redemption, and a higher grant element. Risks remain elevated due to contingent liabilities and global uncertainty, and key indicators breach thresholds under adverse growth and exchange-rate depreciation shocks. The analysis recommends continued fiscal prudence, debt-management conservatism, improved investment efficiency, and targeted spending support.","Public Disclosure Authorized  \nPub lic Disc losure Authorized  \nApproved by:  \nManuela Francisco and Hassan Zaman (IDA) , and Andrea Richter Hume (AFR), Anna Ivanova (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF)  \n\n| KINGDOM OF LESOTHO: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS |  |\n| --- | --- |\n| Risk of external debt distress | Moderate |\n| Overall risk of debt distress | Moderate |\n| Granularity in the risk rating | Limited space |\n| Application of judgment | No |\n\nLesotho’s risk of external and overall debt distress remains moderate, with a slight improvement in the debt path since the last DSA.1 A lower total debt stock for end FY2024/25, reflecting arrears clearance and higher domestic debt redemption, and an increase in the grant element in future borrowing terms, have placed debt on a more favorable trajectory, lowering the debt-to-GDP ratios in present value terms. However, risks remain elevated, including from persistent contingent liabilities and growing global uncertainties. A reversal of current fiscal discipline could also put upward pressure on future debt levels. The uncertainty surrounding the [of U.S. trade](of U.S. trade) policies poses a new downside risk to growth and external sector performance, further weighing on the macroeconomic outlook. While the debt path remains below key thresholds under the baseline, external and public debt indicators continue to breach thresholds under the most extreme shock scenarios, including growth and exchange rate depreciation scenarios, respectively, for public debt and external debt. The DSA highlights the importance of continued fiscal prudence to stabilize debt levels, building buffers against future volatility while directing fiscal space toward targeted support for those most affected by shocks, and also using the revenue windfalls, including from higher water royalties, to retire costly debt. Improving public investment efficiency, addressing contingent liabilities, and maintaining a conservative debt management strategy remain essential for safeguarding debt sustainability and supporting growth.  \n1 This DSA updates the previous Joint DSA from September 2024 (IMF Country Report No. 24/288) . The DSA analysis reflects a debt carrying capacity of Medium considering Lesotho’s Composite Indicator Index of 3.03, based on the IMF’s April 2025 World Economic Outlook and the 2023 World Bank Country Policy and Institutional Assessment (CPIA) .  \n1. Debt coverage remains the same as in the last DSA in 2024 (Text Table 1) . It includes both external and domestic obligations2 of the central government, central bank debt taken on behalf of the government, and government-guaranteed debt of state-owned enterprises (SOEs) .3 Debt also includes domestic arrears, estimated at 0.3 percent of GDP as of end-FY24/25 .4 Since FY22/23, the authorities have been publishing a quarterly Debt Transparency Report, though usually with a 3-to 6-month lag, in agreement with the World Bank under the Sustainable Development Financing Policy (SDFP) . While total SOE debt is not yet available, publicly guaranteed debt of SOEs and private enterprises are available in the report.  \n2. The DSA includes a contingent liability stress test to capture in the assessment extrabudgetary units, SOEs, and a financial market shock (Text Table 2) .5 The contingent liability stress test incorporates the following shocks:  \n• The pension fund financing gap—estimated at 2.4 percent of GDP.6  \n• Liabilities associated with potential asset seizures—estimated at 3.2 percent of GDP.7  \n2 Definition of external/domestic debt is based on currency principle as the data on residency basis is not available, and there are neither locally issued FX-denominated debt nor significant foreign holdings of local currency debt.  \n3 The DSA does not include the central bank’s net liability to the IMF SDR department in line with the Guidance Note for Fund ","cbCaish3BYx06Ko9","https://ap.wps.com/l/cbCaish3BYx06Ko9","pdf",849333,1,22,"English","en",105,"# Risk rating and assessment summary\n## Baseline outlook and changes since last DSA\n## Key drivers of improvement and remaining risks\n## Shock scenarios and threshold breaches\n# Debt coverage and methodology\n## Debt scope and coverage sources\n## Contingent liability stress test and shocks","[{\"question\":\"What is Lesotho’s assessed risk of external and overall debt distress?\",\"answer\":\"Both external debt distress risk and overall risk of debt distress are rated as moderate.\"},{\"question\":\"Why has Lesotho’s debt path improved slightly since the last DSA?\",\"answer\":\"A lower total debt stock at end FY2024/25, driven by arrears clearance and higher domestic debt redemption, combined with a higher grant element in future borrowing terms, has improved the trajectory and reduced present-value debt-to-GDP ratios.\"},{\"question\":\"What risks remain elevated despite the baseline staying below key thresholds?\",\"answer\":\"Persistent contingent liabilities and growing global uncertainties remain key concerns, and external and public debt indicators breach thresholds under extreme shock scenarios, including growth and exchange-rate depreciation.\"}]",1784489330,55,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":27},"kingdom-of-lesotho-joint-bank-fund-debt-sustainability-analysis-external-and-overall-risk-assessment","",{"@graph":35,"@context":85},[36,53,68],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/kingdom-of-lesotho-joint-bank-fund-debt-sustainability-analysis-external-and-overall-risk-assessment/111256/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-20","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"What is Lesotho’s assessed risk of external and overall debt distress?","Question",{"text":75,"@type":76},"Both external debt distress risk and overall risk of debt distress are rated as moderate.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"Why has Lesotho’s debt path improved slightly since the last DSA?",{"text":80,"@type":76},"A lower total debt stock at end FY2024/25, driven by arrears clearance and higher domestic debt redemption, combined with a higher grant element in future borrowing terms, has improved the trajectory and reduced present-value debt-to-GDP ratios.",{"name":82,"@type":73,"acceptedAnswer":83},"What risks remain elevated despite the baseline staying below key thresholds?",{"text":84,"@type":76},"Persistent contingent liabilities and growing global uncertainties remain key concerns, and external and public debt indicators breach thresholds under extreme shock scenarios, including growth and exchange-rate depreciation.","https://schema.org",{"og:url":51,"og:type":87,"og:title":13,"og:site_name":58,"og:description":14},"article",{"robots":89,"canonical":51},"index,follow",{"doc_id":7,"site_id":24},{"code":4,"msg":5,"data":92},[93,97,101,105,110,115,120,123,128,131,135],{"id":20,"doc_module":4,"doc_module_name":45,"category_name":94,"show_sort_weight":95,"slug":96},"Story & Novel",90,"story-novel",{"id":46,"doc_module":4,"doc_module_name":45,"category_name":98,"show_sort_weight":99,"slug":100},"Literature",80,"literature",{"id":52,"doc_module":4,"doc_module_name":45,"category_name":102,"show_sort_weight":103,"slug":104},"Exam",70,"exam",{"id":106,"doc_module":4,"doc_module_name":45,"category_name":107,"show_sort_weight":108,"slug":109},5,"Comic",60,"comic",{"id":111,"doc_module":4,"doc_module_name":45,"category_name":112,"show_sort_weight":113,"slug":114},6,"Technology",50,"technology",{"id":116,"doc_module":4,"doc_module_name":45,"category_name":117,"show_sort_weight":118,"slug":119},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":45,"category_name":12,"show_sort_weight":121,"slug":122},30,"research-report",{"id":124,"doc_module":4,"doc_module_name":45,"category_name":125,"show_sort_weight":126,"slug":127},9,"Religion & Spirituality",20,"religion-spirituality",{"id":126,"doc_module":4,"doc_module_name":45,"category_name":129,"show_sort_weight":126,"slug":130},"World Cup","world-cup",{"id":132,"doc_module":4,"doc_module_name":45,"category_name":133,"show_sort_weight":132,"slug":134},10,"Lifestyle","lifestyle",{"id":136,"doc_module":4,"doc_module_name":45,"category_name":137,"show_sort_weight":106,"slug":138},19,"General","general"]