Press Release No. 11/470

Press Release No. 11/470
December 15, 2011

An International Monetary Fund (IMF) mission, led by Mr. Boileau Loko, visited Port-au-Prince during December 6–14, 2011 to conduct discussions for the second and third reviews under the Extended Credit Facility (ECF) arrangement.¹ The mission met with the Minister of Economy and Finance Andre Lemercier Georges, and the Governor of the Bank of the Republic of Haiti Charles Castel, as well as with the Minister of Planning and External Cooperation, the Co-Chairman of the Advisory Board on Economic Growth and Investment, other senior officials and development partners. The mission would like to thank the authorities for their warm hospitality and close collaboration. At the end of its visit, Mr. Loko issued the following statement:

“Economic activity has recovered and program implementation under the ECF has been broadly satisfactory. Real Gross Domestic Product (GDP) grew by 5 percent in 2011 in spite of the contraction in agricultural output owing to adverse harvest conditions. Twelve-month inflation reached 10.4 percent in October, mainly as a result of higher food prices. The fiscal position has strengthened reflecting a strong performance in domestic revenue and lower than budgeted expenditure. Credit to the economy has picked up and gross international reserves exceeded the equivalent of five months of imports at end-October.

“The Haitian government and the mission reached understandings in principle on a macroeconomic and structural reform program for Fiscal Year 2012. The authorities’ program aims at safeguarding macroeconomic stability, supporting the recovery, and further reducing poverty.

“The outlook for 2012 remains favorable, assuming that the new government accelerates reconstruction, and the security and political situations remain stable. A rebound in agriculture and buoyant activity in construction and manufacturing will contribute to boosting growth to around 7.8 percent. Fiscal policy aims at strengthening domestic revenue and containing current spending so as to create fiscal space for public investment and poverty-related spending. Appropriate macroeconomic policies are designed to help bring down inflation to single digits. The external position would remain strong.

“The structural reform agenda will focus on: (i) further raising domestic revenue; (ii) improving public financial management and economic governance; (iii) enhancing institutional capacities for better public investment management; (iv) strengthening market-based monetary operations and liquidity management and (v) reforming investment climate. Close coordination between the Government and the donor community will be critical for the success of the reform program.

“The IMF staff will recommend that management request the completion of the second and third reviews under the ECF, to be taken up by the Executive Board in March 2012.”

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¹ The Extended Credit Facility (ECF) has replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries by providing a higher level of access to financing, more concessional terms, enhanced flexibility in program design features, and more focused, streamlined conditionality. Financing under the ECF currently carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years. The Fund reviews the level of interest rates for all concessional facilities every two years.