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Inflation rate declines

Mpeshe SelebaloMoeketsi Senaoana

MASERU — Lesotho’s rate of inflation stood at 8.1 percent in June down from 8.9 percent the previous month, according to Central Bank of Lesotho governor Moeketsi Senaoana.
“The decline in the inflation rate reflected a broad slowdown in price increases of various items.
“Both the food and non-food components of inflation declined between May and June,” Senaoana said in a statement.
The central bank chief said the decrease in the domestic inflation rate was in line with declining inflation rates in other Common Market Area countries.
For example, Namibia’s inflation rate fell to 9.1 percent in June which was the highest in the region.
Swaziland’s inflation rate declined to 7.9 percent while South Africa’s inflation rate dropped to 6.9 percent.
The central bank said Lesotho’s economy showed signs of partial improvement in the second quarter of 2009.
“Diamond mining production increased more than two-fold, boosting exports and the current account,” Senaoana said.
The central bank said the average price of rough diamonds had increased by 15 percent in the second quarter of 2009.
Lesotho has huge diamond reserves. The southern African country is famous for unearthing large gems.
The central bank said the textile sector continued to sing the blues over the period under review.
This was due to a fall in incomes in the United States which buys the bulk of Lesotho’s textile exports.
“Exports of textile and clothing declined by 8.6 percent in the second quarter and employment in the manufacturing sector also declined by one percent,” said Senaoana said.
“Employment in the government sector improved moderately while mine workers employment declined by 2.8 percent to 47 354 workers.”
Senaoana said preliminary estimates indicated that government budgetary operations will realise a large surplus in the second quarter of 2009.
“The surplus was mainly influenced by expenditure slowdown resulting from capacity constraints in operating the newly introduced Integrated Financial Management Information System,” he said.

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