THIS PAPER estimates and evaluates the measures of core inflation in Lesotho for the sample period March 2009 to December 2017 using the CPI data. Using five exclusion-based measures and one limited influence estimator, the results reveal that the 30%-trimmed mean tracks trend inflation very well relative to other measures and using the one-month ahead forecasts only 30% trimmed mean core inflation indicator has significant predictive power for the future headline inflation. Nonetheless, as the forecasting horizon increases some measures have significant predictive content for the future headline inflation but the 30%-trimmed mean surpasses all of the calculated core inflation indicators. It is therefore adopted as the ideal measure of core inflation for Lesotho

LESOTHO HAS achieved solid economic growth and a seemingly positive shift in the output structure. Nonetheless, these have not translated into corresponding improvements in employment and poverty outcomes. The literature identifies a number of factors that explain this phenomenon. The empirical analysis and case studies included in this paper reveal that economic growth should be supplemented with employment generating economic structural transformation to have a meaningful poverty reducing impact. Effective economic transformation can be achieved when there is an effective institutional structure in place to support implementation of strategic development policies. Development of effective institutions could be the solution to Lesotho’s sluggish implementation of strategic development policies. Lesotho needs to define the kind of institutions that have to be developed to address all impediments to effective implementation of policies that have the potential to transform the economy, generate employment and address poverty.