IMF Concludes Staff Visit to HaitiPress Release No. 14/255
May 30, 2014
A mission from the International Monetary Fund (IMF) led by Mr. Gabriel Di Bella visited Port-au-Prince during May 14 – 23, 2014, to conduct discussions for the final review under the Extended Credit Facility (ECF) arrangement1. The mission met with Minister of Economy and Finance Marie Carmelle Jean-Marie; Governor of the Bank of the Republic of Haiti (BRH) Charles Castel; other senior government officials, representatives of the private sector, and development partners. At the end of the visit, Mr. Di Bella issued the following statement:
“Preliminary data for the first half of the fiscal year 2014 (i.e. October 2013 - March 2014) suggest that economic activity (as measured by gross domestic product, GDP), has advanced in line with projections, at a pace of about 3 – 4 percent. Inflation remained low, and it is projected to be in the mid-single digits by the end of the fiscal year (i.e. September 2014). The fiscal deficit was lower than programmed, largely due to delays in approving the budget, while domestic revenues have been close to projections. Monetary policy was adequately geared towards protecting reserves while ensuring a low and stable inflation.
“The implementation of measures to strengthen the effectiveness of fiscal policy advanced, in particular with respect to the establishment of the Treasury Single Account (TSA). To this end, continued close cooperation between the Ministry of Finance and the Central Bank will be essential. The implementation of measures to improve the effectiveness of public investment and debt management is also ongoing.
“The mission welcomed the approval of the budget for 2014, and discussed with the authorities the policy mix for fiscal year 2015. In this regard, the mission indicated the need to gradually reduce the fiscal deficit, which in turn will allow a progressive loosening of monetary policy. Successfully reducing the fiscal deficit will depend on containing the cost of energy subsidies and significantly and decisively improving the performance of the electricity sector. The mission underscored the need to implement measures in these areas together with well-designed programs to protect the most vulnerable. A lower fiscal deficit will allow maintaining appropriate international reserve buffers, which are essential to the effective implementation of monetary policy, and as a cushion to withstand unanticipated shocks.
“On the occasion of the final program review, the mission would like to commend the authorities for their implementation of sound macroeconomic policies in the difficult years following the 2010 earthquake. The hospitality and open discussions that prevailed throughout this period continued during this visit. Fund staff and the Haitian authorities will continue working during the upcoming weeks with the objective of finalizing the discussions in the context of the eighth and final review of the ECF, in order to present the related documents for the consideration of the Executive Board before end-August, 2014.”
1 The Extended Credit Facility (ECF) replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries. 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.