Investigating the Determinants of Commercial Bank Interest Rate Spreads in Lesotho:Evidence from ARDL and Non-Linear ARDL Approaches
December 26, 2020The Evolution of Labour Market Trends in Lesotho’s Manufacturing Sector: Lessons and Policy Implications
December 26, 2020
THE OBJECTIVE of this paper is to construct a fiscal vulnerability indicator for Lesotho using annual fiscal and macroeconomic data from 1993 to 2017 and a Dynamic Debt Equation for calculating Fiscal Vulnerability (DDE-FV) that estimates a debt stabilising primary balance. A normal fiscal vulnerability range of 2 to 4 per cent of GDP and a severe fiscal vulnerability range of 8 to 10 per cent of GDP were identified.
Results show few periods of severe fiscal vulnerability compared to normal fiscal vulnerability episodes during 1993 to 2017. Severe fiscal vulnerability was observed in two out of the 25 years. Normal fiscal vulnerability was observed for 11 out of the 25 periods. Lesotho’s fiscal policy was above the normal fiscal vulnerability threshold between 1992 and 2001 before returning to levels largely within the tolerable fiscal vulnerability level for the remainder of the 1993 – 2017 period. Keywords: Fiscal Policy, Budget Deficit, Fiscal vulnerability, Public Debt, Lesotho JEL classification: H2; H3
