## 1htiea2023002

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### Executive summary — context and recent developments
- Food inflation reached 44 percent in September 2022; rice inflation nearly 70 percent.
- More than half the population assessed below the poverty line (Percent of population below poverty line (2021): 52.3).
- Expected financing gap in FY2023 of at least US$105 million (0.5 percent of GDP), assuming import compression and pending additional external financing.
- Public health emergency (cholera) and serious security risks, including surge in armed-gang activity disrupting fuel distribution and economic activity.
- Recent macro outcomes and policy responses:
  - Real GDP likely contracted in FY2022 at about -1.5 percent.
  - Inflation reached 38.7 percent (y/y) in September 2022.
  - BRH raised short-term interest rates to 11.5 percent in August (from 10 percent since March 2020); boosted mandatory reserve requirements on liabilities in US dollar terms to 53 percent; increased interest rates on credit lines.
  - NFPS fiscal deficit for FY2022 (including grants) estimated at 2.2 percent of GDP.
  - Gross international reserves estimated at 4.6 months of projected imports; net international reserves declined by about US$240 million since end-FY2021.
- IMF engagement: First Review of the Staff Monitored Program (SMP) approved December 21, 2022.

### Food Shock Window (FSW) request and staff assessment
- Authorities requested RCF/FSW support to address urgent balance-of-payments (BOP) needs attributable to acute food insecurity and higher food import costs exceeding the five-year average.
- Staff proposes access at SDR 81.9 million (about US$105 million), equivalent to 50 percent of quota, to cover the estimated BOP gap in FY2023.
- Financing rationale: elevated food prices and humanitarian crisis widen the current account deficit relative to June 2022 SMP projections, creating an urgent BOP gap.

### Impact of the food price shock — findings and key statistics
- Food inflation and prices:
  - Food inflation nearly 44 percent (y/y) in September 2022 and 8 percent (m/m).
  - Rice and milk powder surged to 70 and 60 percent (y/y), respectively.
  - Imported products inflation at 52 percent (y/y) in September.
- Balance-of-payments and import bill:
  - Import bill expanded nearly 40 percent during FY2020-22—from about $3.7 billion in FY2020 to some $5.1 billion in FY2022.
  - Nearly half of FY2022 imports are for fossil fuels and food.
  - Fossil fuel bill grew 44 percent and food import bill 40 percent over FY2020-22.
- Selected BOP changes (FY2022-23 SMP approval vs RCF request, in millions of US$):
  - Current account: -108 vs -199; Difference -91.
  - Trade Balance: -4,796 vs -452; Difference 3,272.
  - Textile exports: 1,218 vs 125; Difference 941.
  - Oil imports: -1,156 vs -100; Difference 1,147.
  - Food imports: -901 vs -949; Difference -48.
  - Remittances: 3,835 vs 3,216; Difference -619.
  - Official Disbursements: 500 vs 610; Difference 110.
  - Overall Balance: 30 vs -73; Difference -103.
  - Financing: 217 vs 352.
  - RCF: 105.
  - Other incl. decline in reserves: -30 vs -32; Difference -2.
- Key assumptions behind BOP gap estimates:
  - Lower remittance flows.
  - Exports remain subdued, including a 2 percent of GDP decline in textile exports.
  - Weak FDI at 0.4 percent of GDP in FY2023.
  - Import compression pending additional external financing.
  - Declining Net International Reserves (NIR).

### Fiscal and social mitigation measures — scope and costs
- Emergency financing intended to support budgeted spending to mitigate the food price shock: increases in cash transfers and dry food rations, school feeding programs, hot meals for vulnerable households, community restaurants, waiving school fees.
- Additional expenditures related to food price shock (Text Table 2, in Millions of HTG and share of GDP):
  - Dry food rations: 3,707; Share of GDP 0.14.
  - Transfers to poor families: 8,237; Share of GDP 0.31.
  - Other transfers: 481; Share of GDP 0.02.
  - Total: 12,425; Share of GDP 0.47.
- Measures to support vulnerable households in FY2023 (selected scope, Text Table 3):
  - 250 community restaurants (300 meals/day).
  - 100,000 dry rations (per month).
  - Creation of more than 57,000 temporary jobs country-wide.
  - School feeding: 25,000 parents each receiving HTG 10,000; HTG 375,000,000 subsidy for 50 new buses.
  - Six cash transfer cycles, each reaching 50,000 households; register more than 200,000 new households in SIMAST.
  - Executing parties: Ministry of Economy and Finance (MEF), Ministry of Social Affairs and Labor (MAST); financing: Budget, WB, IDB, USAID, WFP.

### Outlook, risks, and debt sustainability — projections and assessments
- Growth and inflation projections:
  - Growth projected to turn positive in FY2023 at 0.3 percent (weaker than 1.4 percent forecast at SMP approval in June 2022).
  - Medium-term growth expected to reach 1.5 percent.
  - Inflation projected to decline to 21 percent by end-FY2023.
- Fiscal projections:
  - NFPS fiscal deficit projected at 2 percent of GDP in FY2023, 0.3 percentage point lower than at SMP approval.
  - Deficit projected to increase to around 2.7-2.8 percent of GDP over the medium term, driven primarily by capital spending.
- External accounts:
  - Current account deficit expected to narrow to 0.8 percent of GDP in FY2023 and to 0.6 percent of GDP in the medium term.
- Debt assessment:
  - Public debt assessed as sustainable but with “high risk of distress.”
  - Debt-carrying capacity rated “medium” (Composite Indicator CI cited as 2.767 / 2.77 in DSA excerpts).
  - Present value of PPG external debt as a share of exports starts about 93.6 percent in FY2022 and reaches 189.3 percent in FY2035 (breaching 180 percent threshold).
- Balance of risks tilted to the downside:
  - Domestic: intensified political instability, gang disruptions, cholera spread, natural disasters.
  - External: volatile remittances, lower-than-expected external financing, renewed surges in global food and energy prices.

### Debt sustainability framework — key numeric highlights
- Public sector debt trajectory (Percent of GDP):
  - 2020: 23.3; 2021: 28.5; 2022: 29.4; 2023: 25.3; 2033: 34.7; 2043: 48.0.
- Primary deficit (Percent of GDP):
  - 2020: 2.1; 2021: 2.3; 2022: 1.9; 2023: 1.8; 2033: 3.0; 2043: 4.0.
- PV of external debt to GDP threshold (medium capacity): 40 (percent of GDP).
- PV of external debt to exports threshold: 180 (percent of exports of goods and services).
- Gross financing needs projected about 15.4 percent of GDP by FY2033 compared to 2.4 percent of GDP in FY2023.

### Safeguards, governance, and capacity to implement emergency spending
- Authorities committed to track, record, and publish all emergency spending; include all spending and associated financing in the TSA at the central bank; abide by proper procurement procedures.
- Commitments:
  - Internal expenditure audits by all line ministries via General Inspectorate of Finance; communicate to Supreme Audit Court (CSCCA).
  - CSCCA to conduct compliance audits bi-annually and publish findings within six months of end of audit period (starting July–December 2022).
  - Consolidation into one Treasury Single Account (TSA) at BRH completed.
  - Publication (June 9, 2022) of financial and operational audit on COVID-related spending; auditor flagged lack of supporting documentation.
  - Authorities agreed to continue implementing 2019 safeguards assessment recommendations and to undergo a new safeguards assessment as soon as feasible.

### Monitoring, transparency, tax administration, and PFM actions
- All emergency resources included in budget and financing recorded in TSA; continued strengthening of social safety net supported by development partners.
- Continued regular publication of FAES financial operations and centralization of social spending under MAST per PNPPS.
- Tax administration actions and revenue mobilization:
  - Administrative changes at end-June 2022 boosted domestic revenues to a monthly average of 6.4 billion gourdes (from 2.2 billion gourdes in April–June, and to 3.4 billion gourdes in July–August).
  - Staff estimated a shortfall of 5 billion gourdes in domestic revenue in FY2022 relative to June 2022 outlook.
  - Monetary financing increased to 2.3 percent of GDP (49.5 billion gourdes), 0.1 percent more than expected.
- PFM and transparency progress:
  - New customs tariffs finalized with Fund TA.
  - TSA consolidation completed.
  - Medium-term budget framework approved December 19.
  - Authorities to publish comprehensive monthly budget execution reports no later than 45 days after month-end.

### Monetary, exchange policy, and BRH measures
- Central bank lending to NFPS below end-June target; increased in September as revenue collection strained.
- Authorities committed to limit monetary financing to 1.5 percent of GDP in FY2023.
- Any excess reserves to be sterilized by liquidity absorption.
- Staff notes large negative real rate (about 15 percent); further increase in short-term interest rates would aid disinflation.
- BRH will limit FX intervention to smoothing excess volatility (LOI ¶8).

### Banking supervision, AML/CFT, and BRH governance reforms
- BRH strengthening banking supervision, moving to risk-based supervision with TA.
- November instruction to financial institutions supporting sanction regime against gangs and criminal activities.
- BRH completed external audit (KPMG) published June 30, 2022; drafting amendments to organic act; further strengthening needed on governance arrangements, mandate, autonomy safeguards.
- Priority recommendations in progress: adopt IFRS, phase-out BRH involvement in development activities via medium-term plan, align foreign investment strategy with best practices.

### Annex I — Social safety net: FY2022 execution and planned FY2023 expansion (selected figures)
- Cash transfers — social safety net (planned FY2022): 22,000 households, US$ 45 monthly for 24 months; execution FY2022: 2,278 households; Expenditure: HTG 53,490,349.
- Cash transfer (planned FY2022): 150,000 households; execution FY2022: 50,000 households received HTG 3,105 per month (July–Sep. 2022); Expenditure: HTG 155,250,000.
- "Panye Solidarite" (planned FY2022): 210,000 food kits; execution FY2022: 63,720 food kits; Expenditure: HTG 82,850,000.
- "Restoran Kominote" (planned FY2022): 684 community restaurants; execution FY2022: 157 community restaurants; Expenditure: HTG 39,547,440.
- Selected FY2022 social spending expenditures:
  - Temporary social safety net and skills training for youth: HTG 951,783,398.
  - Social safety for the vulnerable affected by Covid-19: HTG 1,703,926,700.
  - Expansion of the social safety net for those affected by Covid-19: HTG 2,823,454,469.

### Staff appraisal, policy implications, and operational priorities
- Staff supports RCF/FSW access of SDR 81.9 million (about US$105 million) to address urgent BOP needs and avert severe economic disruption.
- Operational priorities:
  - Protect spending on food and cash transfers; emergency financing earmarked for these measures.
  - Strengthen social safety nets and expand SIMAST registration.
  - Maintain macroeconomic and financial stability via SMP policies to catalyze donor funds and pave way for an eventual UCT-quality program.
  - Mobilize domestic resources, implement tax and customs reforms, and secure concessional external financing; contain central bank financing to about 2 percent of GDP annually.
  - Prepare for and mitigate natural-disaster-related contingent liabilities given high vulnerability.
- Staff considers Haiti’s proposed access appropriate given financing needs of at least US$105 million in FY2023, debt sustainability assessment, and capacity to repay at proposed access level, contingent on authorities’ commitments and implementation of safeguards.

*Source: EXECUTIVE SUMMARY and supporting excerpts, January 6, 2023; Annex I and Letter of Intent excerpts from the provided IMF document.*

### EXECUTIVE SUMMARY

### EXECUTIVE SUMMARY

### Context and recent developments
- Haiti has been hit hard by the global food price shock: food inflation reached 44 percent in September 2022, with rice inflation nearly 70 percent.
- More than half the population is assessed to be living below the poverty line.
- Expected financing gap in FY2023 of at least US$105 million (0.5 percent of GDP), assuming import compression and pending additional external financing from development partners.
- Country is also suffering a public health emergency (cholera) and serious security risks, including a surge in armed-gang activity that disrupted fuel distribution and economic activity.
- Recent macro developments:
  - Real GDP likely contracted in FY2022 at about -1.5 percent.
  - Inflation reached 38.7 percent (y/y) in September 2022.
  - BRH policy responses included raising short-term interest rates to 11.5 percent in August (from 10 percent since March 2020); boosting mandatory reserve requirements on liabilities in US dollar terms to 53 percent; and increasing interest rates on credit lines.
  - NFPS fiscal deficit for FY2022 (including grants) estimated at 2.2 percent of GDP, about 0.7 percent of GDP larger than projected at SMP approval in June 2022.
  - Gross international reserves estimated at 4.6 months of projected imports; net international reserves have declined by about US$240 million since end-FY2021.
- IMF engagement: First Review of the Staff Monitored Program (SMP) approved by IMF Management on December 21, 2022.

### Food Shock Window (FSW) request and staff assessment
- Authorities requested support under the Rapid Credit Facility (RCF) through the Food Shock Window to address urgent balance-of-payments (BOP) needs attributable to acute food insecurity and higher food import costs that exceed the last five-year average.
- Staff supports the request and proposes access at SDR 81.9 million (about US$105 million), equivalent to 50 percent of quota, or to the estimated BOP gap in FY2023.
- Financing rationale: elevated food prices and humanitarian crisis are expected to widen the current account deficit relative to June 2022 SMP projections, creating an urgent BOP gap.

### Impact of the food price shock (findings and key statistics)
- Food inflation and price dynamics:
  - Food inflation reached nearly 44 percent (y/y) in September 2022 and 8 percent (m/m).
  - Rice and milk powder surged to 70 and 60 percent (y/y), respectively.
  - Imported products inflation at 52 percent (y/y) in September.
- Balance-of-payments and import bill:
  - Haiti’s import bill expanded nearly 40 percent during FY2020-22—from about $3.7 billion in FY2020 to some $5.1 billion in FY2022.
  - Nearly half of FY2022 imports are for fossil fuels and food.
  - Fossil fuel bill grew 44 percent and food import bill 40 percent over FY2020-22.
- Text Table 1 (selected BOP changes, FY2022-23 SMP approval vs RCF request):
  - Current account: -108 (SMP approval) vs -199 (RCF request); Difference -91 (in millions of US$).
  - Trade Balance: -4,796 vs -452; Difference 3,272.
  - Textile exports: 1,218 vs 125; Difference 941.
  - Oil imports: -1,156 vs -100; Difference 1,147.
  - Food imports: -901 vs -949; Difference -48.
  - Remittances: 3,835 vs 3,216; Difference -619.
  - Capital and financial accounts: 138 vs 126; Difference -12.
  - Official Disbursements: 500 vs 610; Difference 110.
  - Overall Balance: 30 vs -73; Difference -103.
  - Financing: 217 vs 352.
  - RCF: 105.
  - Other incl. decline in reserves: -30 vs -32; Difference -2.
- Key assumptions behind BOP gap estimates:
  - Lower remittance flows.
  - Exports remain subdued, including a 2 percent of GDP decline in textile exports.
  - Weak FDI at 0.4 percent of GDP in FY2023.
  - Import compression pending additional external financing.
  - Declining Net International Reserves (NIR).

### Fiscal and social mitigation measures (costs and program scope)
- Emergency financing intended to support spending allocated in the budget to mitigate the food price shock, including increases in cash transfers and dry food rations, school feeding programs, hot meals for vulnerable households, community restaurants, and waiving school fees.
- Text Table 2: Additional expenditures related to food price shock (in Millions of HTG and share of GDP)
  - Dry food rations: 3,707; Share of GDP 0.14.
  - Transfers to poor families: 8,237; Share of GDP 0.31.
  - Transfers to teachers: 0; Share of GDP 0.00.
  - Transfers to textile workers: 0; Share of GDP 0.00.
  - Other transfers: 481; Share of GDP 0.02.
  - Capital expenditures (University hospital): 0; Share of GDP 0.00.
  - Total: 12,425; Share of GDP 0.47.
- Text Table 3: Measures to support vulnerable households in FY2023 (selected items and scope)
  - Expansion of social assistance programs: 250 community restaurants (300 meals/day); 100,000 dry rations (per month); hot meals (mobile canteens); subsidies to industrial park workers for food and transportation.
  - Temporary job creation: creation of more than 57,000 temporary jobs country-wide in agriculture, environment, and public sectors.
  - School feeding program: 25,000 parents each receiving an allowance of HTG 10,000; HTG 375,000,000 subsidy to transportation company for 50 new buses.
  - Public transit subsidy program: fuel for registered buses.
  - Youth vocational training programs: 5,000 young people country-wide.
  - Support artisans and small businesses: 5,000 artisans receiving an allowance of HTG 5,000 for two months.
  - Socio-cultural and sports-based activities: 100 projects.
  - Register more than 200,000 new households in SIMAST country-wide; Six cash transfer cycles, each reaching 50,000 households.
  - Executing parties include Ministry of Economy and Finance (MEF), Ministry of Social Affairs and Labor (MAST); financing sources include Budget, WB, IDB, USAID, WFP.

### Outlook, risks, and debt sustainability
- Growth and inflation projections:
  - Growth projected to turn positive in FY2023 at 0.3 percent (weaker than 1.4 percent forecast at SMP approval in June 2022).
  - Medium-term growth expected to reach 1.5 percent.
  - Inflation projected to decline to 21 percent by end-FY2023.
- Fiscal projections:
  - NFPS fiscal deficit projected at 2 percent of GDP in FY2023, 0.3 percentage point lower than at SMP approval.
  - Deficit projected to increase slightly to around 2.7-2.8 percent of GDP over the medium term, driven primarily by capital spending.
- External accounts:
  - Current account deficit expected to narrow to 0.8 percent of GDP in FY2023 and to 0.6 percent of GDP in the medium term.
- Balance of risks tilted to the downside:
  - Domestic: intensified political instability, gang disruptions, cholera spread, natural disasters.
  - External: volatile remittances, lower-than-expected external financing, renewed surges in global food and energy prices.
- Debt assessment:
  - Public debt assessed as sustainable but with “high risk of distress.”
  - Debt carrying capacity rated “medium.”
  - Slightly higher primary deficits and gradual increase in external concessional financing raise the present value of public and publicly guaranteed external debt as a share of exports into the “high” range of DSA thresholds.

### Safeguards, governance, and capacity to implement emergency spending
- Authorities committed to control, track, record, and publish all spending related to the emergency response.
- Commitments include:
  - Internal expenditure audits by all line ministries involved, conducted by the General Inspectorate of Finance and communicated to the Supreme Audit Court (CSCCA) in a timely way.
  - CSCCA to conduct compliance audits related to food insecurity measures bi-annually and publish audit findings.
  - Publication (June 9, 2022) of financial and operational audit on COVID-related spending under the 2020 RCF arrangement, with auditor flagging lack of supporting documentation that impeded a full audit opinion; audit quality deemed adequate and highlighted PFM issues needing improvement.
  - Consolidation of central budgetary units into one Treasury Single Account (TSA) at the central bank with Fund technical assistance.
  - Authorities agreed to continue implementing the 2019 safeguards assessment recommendations.

### Staff appraisal and engagement
- Staff supports the RCF Food Shock Window request (SDR 81.9 million / about US$105 million) to address urgent BOP needs and prevent immediate severe economic disruption.
- Fund engagement via the SMP is expected to help catalyze donor funds and close the BOP gap within a year.
- Continued implementation of macroeconomic stability policies and structural reforms remains critical to restore stability and protect the most vulnerable.

*Source: EXECUTIVE SUMMARY, January 6, 2023.*

### 9.      To monitor implementation of these

### 9.      To monitor implementation of these

### Monitoring, transparency, and social protection arrangements
- All spending related to the new resources, including social spending, are included in the budget and the associated financing recorded in the Treasury Single Account at the central bank, while abiding by proper procurement procedures.
- Strengthening the social safety net will continue to be supported by financing from development partners (Annex I).
- Continued regular publication of the financial operations of the Economic and Social Assistance Fund (FAES) using a template of financial statements for public institutions is a key objective of the SMP program.
- Planned institutional reform as part of the national policy for social protection and promotion (PNPPS) will centralize social spending initiatives and their execution under the ministry of social affairs and labor, in line with IMF recommendations (IMF 2020).
- Authorities aim to enhance collaboration with the UN World Food Program (WFP) and expand the partial registry, SIMAST (national vulnerability database, in which about 420,000 Haitian poor households, or 2,500,000 people, are registered).
- Staff will continue engagement with development partners including the EU, IADB, the UN WFP, and the World Bank to support transparent deployment of measures to protect the most vulnerable.

### Revenue mobilization and recent tax administration actions
- Recent reforms include amendments to the tax code and tax procedure code; next steps entail following through with implementation of the tax code (and the tax procedure code) and customs and tax administration reforms.
- Administrative measures at end-June 2022, including replacing management at the revenue agency, boosted domestic revenues to a monthly average of 6.4 billion gourdes, from average of 2.2 billion gourdes in April-June—and to 3.4 billion gourdes in July-August.
- Worsening security undermined tax collection capacity in September-October.
- Relative to the June 2022 outlook, staff estimated a shortfall of 5 billion gourdes in domestic revenue in FY2022.
- As a result, monetary financing increased to 2.3 percent of GDP (49.5 billion gourdes)—0.1 percent more than expected.

### Budget framework for FY2023 and fuel subsidy reallocation
- The 2023 budget, approved on December 19, aims for a budget deficit of about 1.5 percent of GDP (staff projected 2 percent of GDP).
- Net fuel revenues are projected at 1.1 percent of GDP in FY2023 (vs. -1.5 percent in FY2022), assuming prices at the pump remain near cost and global oil prices moderate in line with WEO projections.
- Additional budget space is expected to raise non-fuel transfers to 1.2 percent of GDP and pro-growth capital spending to 3.5 percent of GDP (1.4 percent domestically funded).
- Authorities intend to use freed-up resources to compensate those most affected by food price rises, including through their Programme d’urgence.

Key FY2022–FY2023 budget and fuel-related figures (as presented)
- Energy: FY2022 HTG 38,886 (1.8 percent of GDP); FY2023 HTG 10,506 (0.4 percent of GDP)
- EDH: FY2022 HTG 7,644 (0.4 percent of GDP); FY2023 HTG 10,506 (0.4 percent of GDP)
- Fuel (net subsidies): FY2022 HTG 31,242 (1.5 percent of GDP); FY2023 HTG 0.0 (0.0 percent of GDP)
- Non-Energy: FY2022 HTG 5,820 (0.3 percent of GDP); FY2023 HTG 48,034 (1.7 percent of GDP)
- Re-allocation from fuel subsidies: FY2023 HTG 33,480 (1.2 percent of GDP)
- IMF FSW loan: FY2023 HTG 12,379 (0.4 percent of GDP)
- Other (including social spending): FY2022 HTG 5,820 (0.3 percent of GDP); FY2023 HTG 2,174 (0.1 percent of GDP)

Selected price and impact figures (FY2022 → FY2023, % change)
- Formula-cost price (weighted average) HTG/gallon: 559 → 605 (8.3)
- Price at the pump (weighted average) HTG/gallon: 291 → 621 (113.2)
- Fuel budget impact (% GDP): Subsidies 2.9 → 0.1; (Forgone) Taxes 1.5 → 1.1; Net tax collection -1.5 → 1.1
- Memorandum items: World oil price (USD/gallon) 94.6 → 81.5 (-13.9); Exchange rate (HTG/USD) 107 → 117.1 (9.3)

### Public financial management (PFM) and transparency progress
- Finalized new customs tariffs with Fund technical assistance (to be published later in December).
- Consolidation into the Treasury Single Account (TSA) of all bank accounts of the central budgetary units has been completed.
- Medium-term budget framework with the non-financial public sector (NFPS) deficit as the main anchor was approved on December 19.
- Policy priorities aim to simplify the tax and customs systems and enhance transparency, accountability, and audit capacity.
- Authorities to publish comprehensive monthly budget execution reports no later than 45 days after the end of each month.
- Internal expenditure audits by all line ministries using emergency resources will be conducted via the General Inspectorate of Finance and communicated to the Supreme Audit Court (CSCCA) in a timely manner.
- CSCCA to receive adequate resources to conduct compliance audits related to these measures on a bi-annual basis, starting for the period July-December 2022; these compliance audits are to be completed and published within six months of the end of the audit period (LOI ¶5).

### Monetary, exchange policy, and central bank measures
- Central bank lending to the NFPS was below the end-June target, although increased in September as revenue collection was under strain.
- Authorities committed to limiting monetary financing to 1.5 percent of GDP in FY2023 (assessed by staff as non-inflationary).
- Any excess reserves will be sterilized by liquidity absorption.
- Staff notes a large negative real rate (about 15 percent); a further increase in short-term interest rates would help to initiate disinflation.
- BRH will limit foreign exchange intervention only to smoothing excess volatility (LOI ¶8).
- Additional financing needs in FY2023 could be covered by domestic borrowing since public debt is sustainable (Text Table 6).

Selected financing of the fiscal deficit (FY2022 and FY2023)
- External financing: FY2022 HTG -5,822 (-0.3 percent of GDP); FY2023 HTG -11,110 (-0.4 percent of GDP)
  - Project loans: FY2022 HTG 3,450 (0.2 percent of GDP); FY2023 HTG 0 (0.0 percent of GDP)
  - Amortization: FY2022 HTG -9,272 (-0.4 percent of GDP); FY2023 HTG -11,110 (-0.4 percent of GDP)
- Domestic financing: FY2022 HTG 63,240 (3.0 percent of GDP); FY2023 HTG 68,678 (2.4 percent of GDP)
  - BRH: FY2022 HTG 49,515 (2.3 percent of GDP); FY2023 HTG 45,803 (1.6 percent of GDP)
  - IMF FSW loan: FY2023 HTG 12,379 (0.4 percent of GDP)
  - Commercial bank deposits and T-Bills: FY2022 HTG 15,950 (0.7 percent of GDP); FY2023 HTG 10,496 (0.4 percent of GDP)
  - Domestic suppliers: FY2022 HTG 10,950 (0.5 percent of GDP); FY2023 HTG 0 (0.0 percent of GDP)
  - Domestic debt amortization: FY2022 HTG -13,175 (-0.6 percent of GDP); FY2023 HTG 0 (0.0 percent of GDP)

### AML/CFT, banking supervision, and BRH governance reforms
- BRH is strengthening banking supervision to upgrade the regulatory framework and move to risk-based supervision, with technical assistance.
- In November, BRH issued detailed instruction to financial institutions to support implementation of a sanction regime against gangs and criminal activities.
- Authorities should accelerate progress on items in the FATF recommendations to meet action-plan deadlines.
- BRH is addressing deficiencies in AML/CFT preventative measures applicable to entities under its supervision.
- BRH completed a central bank external audit (KPMG) published on June 30, 2022, and submitted drafting amendments to its organic act; some areas (governance arrangements, mandate, autonomy safeguards) need further strengthening.
- Priority recommendations in progress include adoption of International Financial Reporting Standards, a medium-term plan to phase-out BRH involvement in development activities, and alignment of the foreign investment strategy with best practices.

### Food Shock Window (FSW) financing, safeguards, and capacity to repay
- Authorities requested access under the RCF of 50 percent of quota (SDR 81.9 million) through the new FSW.
- Financing under the FSW will be disbursed to the central bank and is expected to be on-lent to the government for budget support to finance response to the food price shock, including purchases of food and cash transfers to the most vulnerable households.
- Haiti qualifies for the FSW because it faces an urgent BOP need attributable to acute food insecurity and increase in food import costs exceeding the relevant threshold (qualification based on criterion (i)).
- Haiti’s debt is considered sustainable, although at high risk of debt distress (See DSA Supplement).
- The Fund’s exposure to Haiti will increase to 115.2 percent of quota or 1.1 percent of GDP and future debt service to the Fund is expected to reach 2.6 percent of exports of goods and services and almost 2 percent of gross international reserves, which are higher than PRGT comparators.
- Risks: country’s high fragility, institutional weakness, and high risk of debt distress; mitigation: authorities’ commitment to close engagement with the Fund and to pursue structural reforms and governance strengthening.

Risk mitigation and safeguards measures (authorities’ commitments)
- Carefully track, record, and publish all expenditures related to the emergency response.
- Publish all public procurement contracts awarded since November 2021, including regular (monthly) information on beneficiaries of successful bidders.
- Consolidation into one Single Treasury Account at the BRH (including central budgetary units).
- Enforce compliance with proper expenditure execution procedures and controls.
- Publish comprehensive monthly budget execution reports no later than 45 days after the end of each month.
- Conduct internal expenditure audits by all line ministries and communicate them to the CSCCA in a timely manner.
- Provide adequate resources to the CSCCA to conduct bi-annual compliance audits starting for July-December 2022; audits to be completed and published within six months of the end of the audit period (LOI ¶5).
- Provide staff access to BRH’s most recently completed external audit reports and authorize BRH’s external auditors to hold discussions with staff.

### Staff appraisal and conclusion
- Staff supports the authorities’ request for Fund emergency financing of 50 percent of quota under the Food Shock Window under the Rapid Credit Facility.
- Staff assesses that Haiti qualifies for support as it faces an urgent balance of payments need that, if not addressed, would cause severe economic disruption.
- Staff considers the proposed access appropriate given Haiti’s large and urgent financing needs of at least US$105 million in FY2023, its debt sustainability, and adequate capacity to repay the Fund at the proposed level of access, given strength of authorities’ policies under the SMP.
- The proposed disbursement would provide critical and timely support to help the government finance its response to the food price shock and act as a catalyst to official multilateral and bilateral financial assistance.
- Staff considers the authorities’ commitments in their Letter of Intent appropriate to ensure macroeconomic stability.

*Source: IMF staff report excerpt.*

### 20.      The authorities are committed to advancing policies that will ensure continued

### 1htiea2023002 - 20.      The authorities are committed to advancing policies that will ensure continued

### Authorities' policy stance and program objectives
- The authorities are committed to advancing policies that will ensure continued macroeconomic stability and support the poor, and have shared a detailed strategy to enhance social safety nets.
- They remain in close consultation with staff to implement policies under the SMP that will:
  - promote macroeconomic and financial stability,
  - foster domestic resource mobilization,
  - ensure continued donor support,
  - pave the way for an eventual full-fledged Fund Upper-Credit-Tranche (UCT)-quality program.
- The authorities’ LOI specifies that the emergency financing will be used to support spending allocated in the budget on food and cash transfers to mitigate the impact of the food price shock on the population.

### Food prices, social indicators, and humanitarian consequences (Figure 1)
- Inflation, largely imported, accelerated in 2022 (contribution to inflation by category shown: Others; Housing, water, electricity; Food and non-alcoholic beverages; CPI - local products; CPI - imported products; Overall CPI).
- US rice exports to Haiti showed a decline in import volume (time series shown from Oct-19 to Sep-22 in metric tons).
- Domestic cereal production and total cereals production (In tonnes) display trends across 2010–2020 (charted).
- The absolute number of people undernourished has reached historic highs (Number of People Undernourished in millions, three-year average: series from 2001-03 to 2019-21).
- Poverty rates have reversed meager progress: Percent of population below poverty line (2021): 52.3.
- Security problems have led to displacement of thousands of people (Total Displaced Persons by Violence, number of people: Haiti and comparators shown for 2010–2022; IOM estimate for Haiti for 2022 as of September 2022).

### Macroeconomic outlook and key projections (Table 1 — FY2019–25, fiscal year ending September 30)
- Nominal GDP (2021): US$21.0 billion; GDP per capita (2021): US$1,765; Population (2021): 11.9 million.
- Percent of population below poverty line (2021): 52.3.
- Real GDP growth (GDP at constant prices, change over previous year):
  - FY2019: -1.7
  - FY2020: -3.3
  - FY2021: -1.8
  - FY2022 (Prog.): 0.3
  - FY2022 (Est.): -1.5
  - FY2023 (Proj.): 0.3
  - FY2024 (Proj.): 1.2
  - FY2025 (Proj.): 1.5
- GDP deflator (change over previous year):
  - FY2019: 17.6
  - FY2020: 20.6
  - FY2021: 19.3
  - FY2022 (Prog.): 26.1
  - FY2022 (Est.): 27.6
  - FY2023 (Proj.): 33.4
  - FY2024 (Proj.): 14.0
  - FY2025 (Proj.): 12.9
- Consumer prices (period average):
  - FY2019: 17.3
  - FY2020: 22.9
  - FY2021: 15.9
  - FY2022 (Prog.): 26.1
  - FY2022 (Est.): 27.6
  - FY2023 (Proj.): 33.4
  - FY2024 (Proj.): 14.0
  - FY2025 (Proj.): 12.9
- Consumer prices (end-of-period):
  - FY2019: 19.7
  - FY2020: 25.2
  - FY2021: 13.1
  - FY2022 (Prog.): 27.5
  - FY2022 (Est.): 38.7
  - FY2023 (Proj.): 21.0
  - FY2024 (Proj.): 13.4
  - FY2025 (Proj.): 12.4
- External sector (exports/imports, percent changes):
  - Exports (goods, valued in U.S. dollars, f.o.b.): FY2019: 11.4; FY2020: -26.3; FY2021: 27.7; FY2022 (Prog.): 7.0; FY2022 (Est.): 13.1; FY2023 (Proj.): 4.8; FY2024 (Proj.): 6.1; FY2025 (Proj.): 6.2
  - Imports (goods, valued in U.S. dollars, f.o.b.): FY2019: -6.0; FY2020: -16.7; FY2021: 22.3; FY2022 (Prog.): 12.8; FY2022 (Est.): 8.4; FY2023 (Proj.): 7.6; FY2024 (Proj.): 5.2; FY2025 (Proj.): 4.6
- Real effective exchange rate (eop; + appreciation): FY2019: -11.0; FY2020: 34.2; FY2021: -5.2.
- Money and credit (12-month percentage change):
  - Credit to private sector (in U.S. dollars and gourdes): FY2019: 24.0; FY2020: -11.2; FY2021: 15.2; FY2022 (Prog.): 5.8
  - Base money (currency in circulation and gourde deposits): FY2019: 22.9; FY2020: 22.4; FY2021: 21.5; FY2022 (Prog.): 21.5
  - Broad money (excl. foreign currency deposits): FY2019: 20.4; FY2020: -0.3; FY2021: 38.2; FY2022 (Prog.): 20.8
- Central government (percent of GDP; FY2019–25 projections):
  - Overall balance (including grants): FY2019: -2.1; FY2020: -2.4; FY2021: -2.6; FY2022 (Prog.): -1.5; FY2022 (Est.): -2.2; FY2023 (Proj.): -2.0; FY2024 (Proj.): -2.5; FY2025 (Proj.): -2.7
  - Domestic revenue: FY2019: 6.4; FY2020: 6.2; FY2021: 5.9; FY2022 (Prog.): 5.8; FY2022 (Est.): 5.4; FY2023 (Proj.): 6.6; FY2024 (Proj.): 6.9; FY2025 (Proj.): 7.3
  - Grants: FY2019: 1.7; FY2020: 1.3; FY2021: 2.3; FY2022 (Prog.): 2.7; FY2022 (Est.): 2.8; FY2023 (Proj.): 2.5; FY2024 (Proj.): 2.3; FY2025 (Proj.): 2.2
  - Total expenditure: FY2019: 10.1; FY2020: 9.9; FY2021: 10.8; FY2022 (Prog.): 10.1; FY2022 (Est.): 10.3; FY2023 (Proj.): 11.1; FY2024 (Proj.): 11.7; FY2025 (Proj.): 12.2
  - Health, education and agriculture spending (memorandum): FY2019: 1.5; FY2020: 2.0; FY2021: 1.7; FY2022 (Prog.): 1.7; FY2022 (Est.): 1.7; FY2023 (Proj.): 1.8; FY2024 (Proj.): 1.8; FY2025 (Proj.): 1.9
- Public debt:
  - External public debt (medium and long-term, eop): FY2019: 15.8; FY2020: 10.5; FY2021: 12.9; FY2022 (Prog.): 11.2; FY2022 (Est.): 12.9; FY2023 (Proj.): 11.1; FY2024 (Proj.): 11.1; FY2025 (Proj.): 11.2
  - Total public sector debt (end-of-period): FY2019: 26.5; FY2020: 23.3; FY2021: 28.5; FY2022 (Prog.): 27.3; FY2022 (Est.): 29.4; FY2023 (Proj.): 25.3; FY2024 (Proj.): 25.5; FY2025 (Proj.): 25.9
- Memorandum items:
  - Nominal GDP (millions of U.S. dollars): FY2019: 14,787; FY2020: 14,508; FY2021: 21,017; FY2022 (Prog.): 20,135; FY2022 (Est.): 20,223; FY2023 (Proj.): 24,236; FY2024 (Proj.): 25,192; FY2025 (Proj.): 26,128
  - Net international reserves (program definition): FY2019: 732; FY2020: 677; FY2021: 452; FY2022 (Prog.): 492; FY2022 (Est.): 142; FY2023 (Proj.): 203; FY2024 (Proj.): 242; FY2025 (Proj.): 285
  - Gross international reserves (millions of dollars): FY2019: 2,100; FY2020: 2,501; FY2021: 2,534; FY2022 (Prog.): 2,574; FY2022 (Est.): 2,328; FY2023 (Proj.): 2,348; FY2024 (Proj.): 2,373; FY2025 (Proj.): 2,398

### Fiscal operations and public financing (Table 2a — NFPS operations, FY2019–25, in millions of gourdes)
- Total revenue and grants:
  - FY2019: 99,665
  - FY2020: 108,524
  - FY2021: 139,852
  - FY2022 (Prog.): 184,082
  - FY2022 (Est.): 173,689
  - FY2023 (Proj.): 259,708
  - FY2024 (Proj.): 302,124
  - FY2025 (Proj.): 357,280
- Domestic revenue:
  - FY2019: 79,071
  - FY2020: 90,046
  - FY2021: 100,635
  - FY2022 (Prog.): 125,552
  - FY2022 (Est.): 114,919
  - FY2023 (Proj.): 187,736
  - FY2024 (Proj.): 226,608
  - FY2025 (Proj.): 275,792
- Grants (total):
  - FY2019: 20,594
  - FY2020: 18,478
  - FY2021: 39,217
  - FY2022 (Prog.): 58,530
  - FY2022 (Est.): 58,770
  - FY2023 (Proj.): 71,972
  - FY2024 (Proj.): 75,515
  - FY2025 (Proj.): 81,488
- Total expenditure:
  - FY2019: 125,952
  - FY2020: 143,265
  - FY2021: 184,164
  - FY2022 (Prog.): 217,344
  - FY2022 (Est.): 220,400
  - FY2023 (Proj.): 317,276
  - FY2024 (Proj.): 384,959
  - FY2025 (Proj.): 459,694
- Capital expenditure:
  - FY2019: 26,117
  - FY2020: 25,786
  - FY2021: 58,107
  - FY2022 (Prog.): 74,939
  - FY2022 (Est.): 73,564
  - FY2023 (Proj.): 101,117
  - FY2024 (Proj.): 129,122
  - FY2025 (Proj.): 155,941
- Central government balance including grants (in millions of gourdes):
  - FY2019: -26,286
  - FY2020: -34,741
  - FY2021: -44,313
  - FY2022 (Prog.): -33,262
  - FY2022 (Est.): -46,710
  - FY2023 (Proj.): -57,568
  - FY2024 (Proj.): -82,835
  - FY2025 (Proj.): -102,414

### Banking system and monetary indicators (Table 3 and financial soundness indicators)
- Net international reserves (program definition, in millions of U.S. dollars):
  - FY2019: 732
  - FY2020: 677
  - FY2021: 452
  - FY2022 (Prog.): 492
  - FY2022 (Est.): 142
  - FY2023 (Proj.): 203
  - FY2024 (Proj.): 242
  - FY2025 (Proj.): 285
- Base money (in millions of gourdes):
  - FY2019: 126,411
  - FY2020: 154,758
  - FY2021: 188,101
  - FY2022 (Prog.): 228,532
  - FY2022 (Est.): 216,049
  - FY2023 (Proj.): 245,898
  - FY2024 (Proj.): 278,647
  - FY2025 (Proj.): 310,980
- Broad money (M3, in millions of gourdes):
  - FY2019: 370,830
  - FY2020: 369,728
  - FY2021: 510,963
  - FY2022 (Prog.): 617,036
  - FY2022 (Est.): 583,333
  - FY2023 (Proj.): 659,006
  - FY2024 (Proj.): 741,201
  - FY2025 (Proj.): 824,098
- Credit to the private sector (in millions of gourdes):
  - FY2019: 130,485
  - FY2020: 115,840
  - FY2021: 133,478
  - FY2022 (Prog.): 141,241
  - FY2022 (Est.): 142,109
  - FY2023 (Proj.): 155,470
  - FY2024 (Proj.): 172,953
  - FY2025 (Proj.): 194,583
- Financial soundness indicators (selected, percent):
  - Regulatory capital to risk-weighted assets: Jun-20: 21.3; Sep-20: 26.2; Dec-20: 27.3; Mar-22: 21.4
  - NPLs to gross loans: Jun-20: 8.0; Sep-20: 5.0; Dec-20: 5.4; Mar-22: 7.8
  - Return on assets (ROA): Jun-20: 2.1; Sep-20: 1.2; Dec-20: 1.4; Mar-22: 1.9
  - Foreign currency deposits to total deposits: Jun-20: 70.6; Mar-22: 66.3
  - Foreign currency loans to total loans (net): Jun-20: 57.0; Mar-22: 47.7

### Balance of payments and external financing (Tables 4a/4b and Table 6)
- Current account (including grants, in millions of US$):
  - FY2019: -169
  - FY2020: 158
  - FY2021: 98
  - FY2022 (Prog.): 154
  - FY2022 (Est.): -481
  - FY2023 (Proj.): -199
  - FY2024 (Proj.): -126
  - FY2025 (Proj.): -147
- Trade balance (in millions of US$):
  - FY2019: -3,318
  - FY2020: -2,879
  - FY2021: -3,474
  - FY2022 (Prog.): -3,984
  - FY2022 (Est.): -3,711
  - FY2023 (Proj.): -4,030
  - FY2024 (Proj.): -4,225
  - FY2025 (Proj.): -4,394
- Exports of goods (millions of US$): FY2019: 1,202; FY2020: 885; FY2021: 1,130; FY2022 (Prog.): 1,209; FY2022 (Est.): 1,278; FY2023 (Proj.): 1,339; FY2024 (Proj.): 1,421; FY2025 (Proj.): 1,509
- Imports of goods (millions of US$): FY2019: -4,520; FY2020: -3,764; FY2021: -4,604; FY2022 (Prog.): -5,193; FY2022 (Est.): -4,989; FY2023 (Proj.): -5,369; FY2024 (Proj.): -5,646; FY2025 (Proj.): -5,903
- Projected average oil price (U.S. dollars per barrel, APSP):
  - FY2019: 61.4
  - FY2020: 41.8
  - FY2021: 69.2
  - FY2022 (Prog.): 106.8
  - FY2022 (Est.): 96.8
  - FY2023 (Proj.): 81.1
  - FY2024 (Proj.): 75.4
  - FY2025 (Proj.): 71.9
- External financing requirements and sources (Table 6, selected, in millions of US$):
  - Requirements (FY2019–FY2025): FY2019: 445; FY2020: 66; FY2021: 131; FY2022: 715; FY2023: 916; FY2024: 809; FY2025: 816
  - Current account deficit, excluding grants (FY2019–FY2025): FY2019: 350; FY2020: -32; FY2021: 36; FY2022: 705; FY2023: 810; FY2024: 703; FY2025: 711
  - Sources (total): FY2019: 361; FY2020: -145; FY2021: 36; FY2022: 640; FY2023: 928; FY2024: 809; FY2025: 816
  - Official disbursements, excluding budget support (FY2019–FY2025): FY2019: 184; FY2020: 116; FY2021: 190; FY2022: 254; FY2023: 530; FY2024: 632; FY2025: 639
  - Change in central bank's NFA (+ is decrease): FY2019: 123; FY2020: -350; FY2021: -91; FY2022: 206; FY2023: -20; FY2024: -25; FY2025: -25

### IMF obligations and capacity indicators (Table 5)
- Fund obligations based on existing and prospective credit (in millions of SDRs, principal and interest):
  - Total obligations (in millions of SDRs): FY2019: 8.1; FY2020: 12.2; FY2021: 5.2; FY2022: 7.9; FY2023: 11.5; FY2024: 10.7; FY2025: 17.7; FY2026: 25.2; FY2027: 19.1
  - Total obligations (in millions of US$): FY2019: 11.2; FY2020: 17.0; FY2021: 7.5; FY2022: 10.6; FY2023: 15.3; FY2024: 14.3; FY2025: 23.9; FY2026: 33.9; FY2027: 25.7
- Outstanding Fund credit (end of period, in millions of SDRs and US$):
  - SDRs (end-period): FY2019: 58.4; FY2020: 128.3; FY2021: 123.4; FY2022: 115.9; FY2023: 188.8; FY2024: 180.7; FY2025: 164.8; FY2026: 142.3; FY2027: 122.9
  - US$ (end-period): FY2019: 80.7; FY2020: 178.6; FY2021: 175.8; FY2022: 155.9; FY2023: 251.0; FY2024: 241.7; FY2025: 221.7; FY2026: 191.4; FY2027: 165.2
- Memorandum items (selected):
  - Exports (in billions of U.S. dollars): FY2019: 1.7; FY2020: 1.0; FY2021: 1.3; FY2022: 1.3; FY2023: 1.4; FY2024: 1.5; FY2025: 1.6; FY2026: 1.7; FY2027: 1.8
  - Government revenues (in billions of U.S. dollars): FY2019: 3.1; FY2020: 1.2; FY2021: 1.1; FY2022: 1.7; FY2023: 2.3; FY2024: 2.4; FY2025: 2.5; FY2026: 2.7; FY2027: 2.8
  - Reserves (in billions of U.S. dollars): FY2019: 4/2.1; FY2020: 2.5; FY2021: 2.5; FY2022: 2.3; FY2023: 2.2; FY2024: 2.3; FY2025: 2.2; FY2026: 2.3; FY2027: 2.5

### Key policy implications and operational priorities (drawn from text and fiscal/financing tables)
- Protect spending on food and cash transfers: emergency financing is earmarked to support budgeted spending on food and cash transfers to mitigate the food price shock’s impact on the population.
- Strengthen social safety nets: authorities have shared a detailed strategy to enhance social safety nets as part of the program approach.
- Maintain macroeconomic and financial stability: SMP policies are intended to restore conditions conducive to a future full-fledged Fund UCT-quality program.
- Mobilize domestic resources and secure donor support: policy emphasis on fostering domestic resource mobilization and ensuring continued donor support to meet financing needs and reduce reliance on emergency financing.

*Source: IMF staff report and supporting tables and figures contained in the provided content unit.*

### Annex I. Social Safety Net

### Annex I. Social Safety Net

### Measures in Place to Strengthen the Social Safety Net in FY2022
- Cash transfers - social safety net (Purpose: Food security)
  - Planned (FY2022): 22,000 vulnerable households, receiving around US$ 45 monthly for 24 months
  - Execution (FY 2022): 2,278 households
  - Expenditure (in HTG): 53,490,349
- Cash transfer - earthquake early recovery (Purpose: Food security)
  - Planned (FY2022): US$ 100 for three months, covering 3,814 households country-wide
  - Execution (FY 2022): 1,609 households
  - Expenditure (in HTG): 36,629,600
- Cash transfer (Purpose: Food security)
  - Planned (FY2022): 150,000 households
  - Execution (FY 2022): 50,000 households received HTG 3,105 per month, July-Sep. 2022
  - Expenditure (in HTG): 155,250,000
- "Panye Solidarite" - food kits (Purpose: Food security)
  - Planned (FY2022): 210,000 food kits
  - Execution (FY 2022): 63,720 food kits to vulnerable households
  - Expenditure (in HTG): 82,850,000
- "Restoran Kominote" (Purpose: Food security)
  - Planned (FY2022): 684 community restaurants
  - Execution (FY 2022): 157 community restaurants located in vulnerable areas
  - Expenditure (in HTG): 39,547,440
- "Kantin Mobil" (Purpose: Food security)
  - Planned (FY2022): At least 120,000 hot meals
  - Execution (FY 2022): -
  - Expenditure (in HTG): -
- School rehabilitation (Purpose: Food security)
  - Planned (FY2022): 28 schools
  - Execution (FY 2022): No execution
  - Expenditure (in HTG): National school rehabilitation — Completed; 13,247,521
- Education quality improvement (Purpose: Social safety net)
  - Expenditure (in HTG): 33,776,593
- Temporary social safety net and skills training for youth (Purpose: Food security)
  - Expenditure (in HTG): 951,783,398
- Social safety for the vulnerable affected by Covid-19 (Purpose: Food security)
  - Expenditure (in HTG): 1,703,926,700
- Expansion of the social safety net for those affected by Covid-19 (Purpose: Food security)
  - Expenditure (in HTG): 2,823,454,469
- Executing parties and financing noted in source: Economic and Social Assistance Fund (FAES); IADB; Ministry of Social Affairs (MAST) and WFP; Budget, WB; Klere Chimen; Programme d'Urgence; Ministry of Social Affairs and Labor; others as listed.

### Letter of Intent — Key Findings, Requests, and Commitments
- Context and shock impact
  - Annualized food inflation reaching nearly 44 percent in September 2022
  - Rice and milk powder prices surging 60-70 percent
  - About 4.7 million of people are suffering food insecurity
  - Haiti hit by a cholera outbreak and facing elevated import bill pressures in FY2023
  - Balance-of-payments financing gap of at least US$105 million (projection accounts for import compression and pending additional external financing)
- IMF assistance request
  - Requesting financial assistance under the Food Shock Window (FSW) of the Rapid Credit Facility (RCF) in the amount equivalent to SDR 81.9 million, corresponding to 50 percent of Haiti’s quota
  - Disbursement to the Treasury Single Account at the Bank of the Republic of Haiti (BRH)
- Governance, safeguards, and transparency commitments
  - Commit to a Memorandum of Understanding between BRH and the Ministry of Economy and Finance clarifying on-lending and servicing responsibilities
  - Commit to continued implementation of the 2019 safeguards assessment recommendations and to provide IMF staff access to BRH’s most recently completed external audit reports and to authorize its external auditors to hold discussion with staff
  - Undergo a new safeguards assessment as soon as feasible (safeguards assessment must be completed before approval of any subsequent IMF arrangement)
  - Commit to track, record, and publish all spending related to the emergency response; enforce proper expenditure execution procedures and controls without exception
  - Publish comprehensive monthly budget execution reports no later than 45 days after the end of each month
  - Continue to publish all procurement contracts, including information on the beneficial owners of successful bidders
  - Conduct internal expenditure audits by all line ministries involved in emergency resource use through the General Inspectorate of Finance; communicate these to the Supreme Audit Court (CSCCA)
  - Provide adequate resources to enable the CSCCA to conduct compliance audits bi-annually, starting with the July-December 2022 period; these compliance audits will be completed and published within six months of the end of the audit period
- Social safety net and program expansion commitments
  - Priority to cushion shocks for the most vulnerable (children, pregnant women, the disabled, and the elderly); support workers in the textile sector; increase food rations for households
  - Begun school feeding programs and providing hot meals for vulnerable households and community restaurants
  - Plan to waive school fees and boost cash transfers already in place for about 50,000 of the most vulnerable households
  - Plan to leverage digital tools for cash transfers with support from the World Bank and Inter-American Development Bank; work closely with the World Food Program
- Policy stance and publication
  - Continue implementing structural reform agenda supported by Staff Monitored Program (SMP)
  - Will not introduce or intensify exchange and trade restrictions that would compound balance-of-payments difficulties; limit foreign exchange intervention only to smoothing excess volatility
  - Authorize IMF to publish the letter and accompanying Executive Board documents immediately upon consideration

### Debt Sustainability Analysis — Summary Findings Relevant to Social Spending and Financing
- Risk ratings and capacity
  - Risk of external debt distress: High
  - Overall risk of debt distress: High
  - Debt-carrying capacity: medium (Composite Index (CI) estimated at 2.767 based on the Bank’s 2021 CPIA and the October 2022 WEO)
- Key contextual points affecting social spending capacity
  - Haiti is a Fragile and Conflict-Affected State (FCS) and tailored stress tests indicate vulnerability to large natural disaster shocks (statistically frequent)
  - Despite “high” risk of debt distress, overall public debt remains sustainable given current levels and some favorable debt profile characteristics (relatively long maturity of external debt and investment base) and implementation of structural reforms under the SMP baseline
  - DSA assumes potential growth of about 1.5 percent currently
- Public debt coverage and data gaps
  - Gross public debt coverage includes central government, local governments, extrabudgetary autonomous organisms, Electricité d’Haiti (EDH), and financing from BRH to the government; external debt defined on a residency basis
  - No data available on guaranteed debt to other SOEs and non-guaranteed SOE debt
  - Government committed to expanding debt coverage, improving debt data collection, and preparing a Debt Portfolio Review with World Bank support
  - Under the Sustainable Development Finance Policy (SDFP), FY2022 PPAs implemented: limit new external public or publicly guaranteed (PPG) non-concessional debt to zero; strengthen debt transparency (MEF staff received TA and training)
- Domestic public debt measurement notes
  - Gross domestic public debt calculated as claims of the overall banking sector (including BRH) to the non-financial public sector plus suppliers’ credits and domestic arrears as reported by the authorities
  - T-bills and bonds held outside the banking sector are not included in domestic public debt calculation (understood to be negligible)
- Central bank financing and treatment
  - Government debt to BRH about 11.8 percent of GDP in FY2021; MoU of July 2022 imputed accrued interest leading to increased BRH net claims on central government starting October 2021 balance sheet
  - MoU recommends converting most of these liabilities into negotiable securities bearing interest rate of 7.57 percent per annum payable over a fifty-year period with a grace period of 10 years
  - MoU supports BRH efforts to implement 2019 safeguards recommendations on International Financial Reporting Standards (IFRS)

*Source: Annex I. Social Safety Net; Appendix I. Letter of Intent; Haiti: Joint Bank-Fund Debt Sustainability Analysis (excerpts) from the provided IMF document.*

### 15.21 million) in April 2021 under the Fund’s updated CCRT covering debt service to the IMF falling due

### 1htiea2023002 - 15.21 million) in April 2021 under the Fund’s updated CCRT covering debt service to the IMF falling due

### Public debt stock and composition (end-FY2021)
- Total public sector debt: $5.0 billion (28.5 percent of GDP).
- External public debt: $2,258.3 million; 45.5 percent of total public debt (12.9 percent of GDP).
  - Multilateral creditors: $262.8 million; 5.3 percent of total debt; 1.5 percent of GDP.
    - o/w IMF: $175.1 million; 3.5 percent of total debt; 1.0 percent of GDP.
    - o/w OPEC: $42.9 million; 0.9 percent of total debt; 0.2 percent of GDP.
    - o/w IFAD: $44.8 million; 0.9 percent of total debt; 0.3 percent of GDP.
    - o/w IDA: $0.0 million; 0.0 percent of total debt; 0.0 percent of GDP.
  - Bilateral creditors: $1,993.1 million; 40.1 percent of total debt; 11.4 percent of GDP.
    - Venezuela: $1,853.0 million; 37.3 percent of total debt; 10.6 percent of GDP.
      - o/w PetroCaribe: $1,826.2 million; 36.8 percent of total debt; 10.5 percent of GDP.
      - o/w BANDES: $26.8 million; 0.5 percent of total debt; 0.2 percent of GDP.
    - Taiwan, Province of China: $140.1 million; 2.8 percent of total debt; 0.8 percent of GDP.
  - Restructured debt: $2.4 million; 0.0 percent of total debt; 0.0 percent of GDP.
- Total domestic debt: $2,708.1 million; 54.5 percent of total debt; 15.5 percent of GDP.
  - BRH: $2,063.6 million; 41.6 percent of total debt; 11.8 percent of GDP.
  - Other creditors: $644.6 million; 13.0 percent of total debt; 3.7 percent of GDP.
- Total debt: $4,966.4 million; 100.0 percent of total debt; 28.5 percent of GDP.
- Nearly 80 percent of domestic public debt was central bank financing to the government.
- Haiti continued to have “technical arrears” to Venezuela of about $425.57 million, about 2 percent of GDP (September 30, 2021).

### Recent financing, relief, and special instruments
- Haiti benefited from an SDR allocation of $224 million (SDR157 million) in August 2021; the central bank on-lent half to the government for emergency spending, including related to the 2021 earthquake recovery.
- The Fund’s updated CCRT covered debt service to the IMF falling due from April 14, 2020, to April 13, 2022.
- Present value of public debt in September 2022 is estimated at 23.3 percent of GDP.

### Macroeconomic outlook and baseline assumptions
- Baseline assumes normative policy implementation under a 12-month Staff-Monitored Program (SMP).
- Growth projections are conservative; baseline assumes modest recovery with select reforms and sufficient macro stability.
- Real GDP:
  - Projected to turn positive in FY2023 to 0.3 percent, after contracting by 1.5 percent in FY2022.
  - Historical: 1.8 percent in FY2021; 3.3 percent in FY2020; 1.7 percent in FY2019.
  - Long-term (baseline) growth could reach 1.5 percent over the medium term (with assumptions noted in text).
- Inflation:
  - Peaked at 25.2 percent year on year in FY2020; declined to 13.1 percent by September 2021.
  - Annual inflation estimated at 38.7 percent at the end of September 2022.
  - Projected to drop to 21 percent by the end of 2023, with a 12-month period-average rate of 33.4 percent contributing to a GDP deflator projected at 33.4 percent in FY2023.
- Fiscal and external balances:
  - Tax revenue collection low at 5.4 percent of GDP (FY2022).
  - NFPS primary deficit estimated at 1.9 percent of GDP in FY2022 (compared with 1.3 percent projected in July 2022 DSA).
  - NFPS deficit projected to decline to 2 percent of GDP in FY2023 from 2.2 percent in FY2022; expected to expand to about 2.7 percent of GDP in FY2025; long-term average deficit about 3.3 percent of GDP.
  - External current account deficit of 0.8 percent of GDP expected in FY2023, narrowing from a deficit of 2.4 percent in FY2022; medium- and long-term current account expected to stabilize at about 0.6 percent of GDP.
- Financing composition and constraints:
  - Future gross financing needs assumed to be funded mostly by a moderate rise in external concessional financing and domestic debt instruments.
  - Annual growth of central bank lending to the government expected to be contained at 2 percent of GDP or lower; central bank financing expected to increase at about 2 percent of GDP every year, with total stock projected at about 15 percent of GDP by 2033.
  - Remaining domestic financing assumed to come from short-term debt instruments purchased by commercial banks.

### Debt-carrying capacity and thresholds
- Composite indicator (CI) for debt-carrying capacity: 2.77; classified as “medium.”
  - Haiti’s classification would be “weak” if remittances as a share of GDP were not so high.
- Applicable thresholds under “medium” capacity:
  - PV of external debt to GDP threshold: 40 (percent of GDP).
  - PV of external debt to exports threshold: 180 (percent of exports of goods and services).
  - PV of total public debt benchmark: 55 (percent of GDP).
  - Debt service thresholds: 15 (percent of exports of goods and services) and 18 (percent of fiscal revenue).

### Debt sustainability projections and stress tests
- Under the baseline:
  - Most indicators of Haiti’s external debt path are projected to breach indicative thresholds except for the present value of debt to GDP and debt-service-to-revenue.
  - Present value of PPG external debt as a share of exports starts at about 93.6 percent in FY2022 and reaches 189.3 percent in FY2035 (breaching the 180 percent threshold), rising to 264.2 percent by FY2043.
  - Debt-service-to-exports ratio remains below 15 percent until FY2040; it exceeds that threshold by FY2041 and reaches 16.8 percent by FY2043.
  - Present value of external debt to GDP projected to increase gradually to 10.4 percent by FY2033 from 6.5 percent in FY2022, reaching 18.3 percent in FY2043.
  - Debt-service-to-revenue ratio remains below the threshold until FY2043 in contrast to previous DSA, reflecting expected gradual recovery in fiscal revenues.
- Stress tests:
  - A one-off major natural disaster shock assumes damage equivalent to 25 percent of GDP (similar to Hurricane Matthew in 2016).
  - Historical scenario replacing baseline macro variables with 10-year historical averages yields much larger and unrealistic debt accumulation, underscoring realism of the SMP baseline.
- Drivers of long-term breaches: subdued export growth, institutional fragility, reduced productive capacity, prolonged petroleum product subsidization, vulnerability to natural disasters, and climate change impacts.

### Policy implications and recommended priorities (from text)
- Implement the SMP to restore macroeconomic stability and growth, catalyze external financing, and lay foundation for an eventual upper-credit-tranche arrangement.
- Pursue select structural reforms to attract external financing and FDI, boost investment, and raise productivity (including vocational training).
- Strengthen revenue mobilization: simplify tax and customs systems, enhance transparency, accountability, and audit capacity, and broaden the tax base.
- Contain central bank financing to the government at about 2 percent of GDP annually and deepen the market for government securities to shift financing to domestic market instruments.
- Reduce fuel subsidies and increase fuel tax revenues where feasible to create fiscal space for recurrent and growth-enhancing expenditures.
- Prepare for and mitigate natural-disaster-related contingent liabilities given Haiti’s vulnerability to frequent major disasters.

*Source: Haitian authorities; and Fund staff estimates and projections (excerpts from IMF document).*

### 18.      Stress tests confirm the vulnerability of debt to lower remittances and to natural disasters. A

### 1htiea2023002 - 18.      Stress tests confirm the vulnerability of debt to lower remittances and to natural disasters. A

### Stress test findings: external debt vulnerability
- A shock to non-debt-creating flows (i.e., a decline in both current transfers and FDI inflows by one standard deviation) would:
  - raise the present value of external debt above the 180 percent-of-export threshold much earlier (2025), and
  - raise the debt-service-to-export ratio above the 15 percent threshold after seven years (2029).
- A drop in remittances would pose a more severe shock (text notes greater severity but does not quantify further).
- A natural disaster shock has a sizable impact on the external debt trajectory, bringing the external-debt-to-export ratio above its threshold (Table 4).

### Public Sector Debt Sustainability Analysis — baseline and dynamics
- Baseline projections:
  - Total public debt projected at about 27 percent of GDP until 2027, rising to 48 percent by FY2043.
  - In present value terms, public debt would peak at 42 percent of GDP in FY2043, some 13 percentage points below the corresponding benchmark.
- Features limiting vulnerabilities:
  - relatively long maturity to multilateral creditors,
  - a relatively high share denominated in gourdes (about 57 percent),
  - investment base consisting mostly of public agencies.
- Debt service and financing notes:
  - Financing from the BRH constitutes a significant portion of public debt (including principal and interest payments) and are not serviced in the short term.
  - Repayment of the BRH financing will raise debt service substantially over the long run due to reimbursement conditions (see paragraph 4).
  - Gross financing needs projected at about 15.4 percent of GDP by FY2033 compared to 2.4 percent of GDP in FY2023.
  - About 90 percent of these gross financing needs expected to be covered by domestic borrowing and project loans — rollover risk would likely be mitigated.
  - Improved tax revenue collection and financial deepening (increased demand for government securities by domestic banks) would help fund Haiti’s annual gross financing needs over the medium and long terms.

### Public debt under stress: natural disasters and scenarios
- Under the most extreme natural disaster scenario:
  - The present value of the public debt-to-GDP ratio barely approaches 55 percent over a longer horizon (20-year) after the year of the shock (Table 5).
  - The public debt-to-GDP ratio grows by 60 percent in the aftershock to 44 percent in 2025 (against the 23.3 percent baseline) before declining steadily.
  - The ratio exhibits a tail effect over a longer horizon, slightly approaching the threshold by about FY2041, reflecting a higher probability of natural disasters over the longer term.
- External debt indicators under baseline and stress:
  - Two indicators of external debt (the present value of the debt-to-export ratio and debt-service-to-exports) would breach their indicative benchmarks by 2035 and FY2041 respectively, owing to subdued export growth.
  - A drop in remittances or a natural disaster shock similar in magnitude to Hurricane Matthew would bring higher debt ratios and breaches in some thresholds of external debt indicators.
  - External debt service capacity is vulnerable to a drop in official and private transfers and FDI, as illustrated by the debt-service-to-revenue proximity to the threshold (Table 4).

### Risk rating, vulnerabilities, and recommended reforms
- Current classifications:
  - Haiti’s debt-carrying capacity classification: “medium” (unchanged from last DSA).
  - Haiti’s debt distress risk rating: “high.”
- Key risk drivers and assumptions:
  - Outlook assumes increased external concessional financing in place of some monetary financing by the BRH to fund slightly higher primary deficits over the medium term amid subdued export growth and weaker revenue mobilization.
  - Central bank financing of the fiscal deficit is expected to stabilize at 2.0 percent of GDP over the long term, gradually replaced by issuance of short-term T-bills.
  - Potential growth assumed in this DSA: about 1.5 percent.
- Policy recommendations and priorities (as stated):
  - Step up efforts to strengthen revenue mobilization and reforms to raise investment and growth, as recommended by the SMP.
  - Follow through recent tax reforms to mobilize additional revenues and improve efficiency of government expenditures through ongoing PFM reforms linked to the IMF Staff Monitored Program (SMP).
  - Develop domestic markets.
  - Implement growth enhancement policies.
  - Avoid non-concessional external financing.
- Justification for “high” risk of debt distress:
  - Despite lower debt-to-GDP ratios after GDP rebasing, threshold breaches under baseline and stress scenarios (notably natural disasters and remittance shocks) justify maintaining the “high” risk of debt distress.
  - The DSA underscores the need to implement the authorities’ economic reform program supported by the SMP and to prepare for and manage the adverse effects of natural disasters.

### Authorities’ views
- Authorities agreed with the thrust of the debt sustainability analysis and its conclusions.
- They viewed staff’s baseline scenario as realistic but emphasized potential upside from increased tax revenue mobilization and exports if several important sectors rebound faster with further political stabilization.
- Authorities noted:
  - Haiti’s lower ratios of debt to GDP due to GDP rebasing.
  - Agreement that risk of debt distress merits classification of “high” while debt-carrying capacity remains “medium.”
  - Increased investment is critical for raising potential growth, which could widen the current account deficit over the medium term.
- BRH observations:
  - Reforms related to BRH governance and the ongoing transition to IFRS-9 could alter accounting of central bank advances to the government and interest payments.
  - Efforts to deepen financial markets and develop the market for government debt securities could help gradually reduce monetary financing to the government.

*Source: Haiti — Debt Sustainability Analysis and related stress test results (excerpt).*

### 4. Haiti: Public Sector Debt Sustainability Framework, Baseline Scenario, 2020–2043

### 4. Haiti: Public Sector Debt Sustainability Framework, Baseline Scenario, 2020–2043

### Public sector debt trajectory and key statistics
- Public sector debt (In Percent of GDP):  
  - 2020: 23.3; 2021: 28.5; 2022: 29.4; 2023: 25.3; 2024: 25.5; 2025: 25.9; 2026: 26.6; 2027: 27.4; 2028: 28.4; 2033: 34.7; 2043: 48.0.  
  - Historical average shown: 24.9; Projections average shown: 29.0.
- Of which: external debt (In Percent of GDP):  
  - 2020: 10.5; 2021: 12.9; 2022: 12.9; 2023: 11.2; 2024: 11.1; 2025: 10.8; 2026: 11.0; 2027: 11.2; 2028: 12.1; 2033: 17.0; 2043: 22.7.  
  - Historical average: 13.2; Projections average: 12.9.
- Change in public sector debt:  
  - 2020: -3.2; 2021: 5.1; 2022: 0.9; 2023: -4.1; 2024: 0.2; 2025: 0.4; 2026: 0.7; 2027: 0.8; 2028: 1.0; 2033: 1.4; 2043: 1.0.
- Identified debt-creating flows (sum):  
  - 2020: -5.4; 2021: 3.5; 2022: -2.2; 2023: -4.4; 2024: 0.2; 2025: 0.4; 2026: 0.8; 2027: 0.9; 2028: 1.1; 2033: 1.4; 2043: 1.1.  
  - Identified debt-creating flows averages: 0.5 (historical), 0.5 (projections).
- Primary deficit (In Percent of GDP):  
  - 2020: 2.1; 2021: 2.3; 2022: 1.9; 2023: 1.8; 2024: 2.3; 2025: 2.5; 2026: 2.8; 2027: 2.6; 2028: 2.6; 2033: 3.0; 2043: 4.0.  
  - Historical average: 2.1; Projections average: 2.6.
- Revenue and grants (In Percent of GDP):  
  - 2020: 7.5; 2021: 8.2; 2022: 8.1; 2023: 9.1; 2024: 9.2; 2025: 9.5; 2026: 9.8; 2027: 9.9; 2028: 10.0; 2033: 10.4; 2043: 11.3.  
  - Historical average: 9.7; Projections average: 9.9.  
  - Of which: grants: 2020: 1.3; 2021: 2.3; 2022: 2.8; 2023: 2.5; 2024: 2.3; 2025: 2.2; 2026: 2.2; 2027: 2.2; 2028: 2.3; 2033: 2.5; 2043: 3.0.
- Primary (noninterest) expenditure (In Percent of GDP):  
  - 2020: 9.6; 2021: 10.5; 2022: 10.0; 2023: 10.9; 2024: 11.5; 2025: 11.9; 2026: 12.5; 2027: 12.5; 2028: 12.6; 2033: 13.4; 2043: 15.2.
- Automatic debt dynamics (In Percent of GDP):  
  - 2020: -7.5; 2021: 1.2; 2022: -4.1; 2023: -6.2; 2024: -2.1; 2025: -2.0; 2026: -2.0; 2027: -1.7; 2028: -1.6; 2033: -1.6; 2043: -2.9.
  - Contribution from interest rate/growth differential: 2020: -0.9; 2021: -1.8; 2022: -3.5; 2023: -4.4; 2024: -2.0; 2025: -2.0; 2026: -1.9; 2027: -1.7; 2028: -1.6; 2033: -1.6; 2043: -2.1.
  - Contribution from average real interest rate (In Percent): 2020: -1.8; 2021: -2.2; 2022: -4.0; 2023: -4.4; 2024: -1.7; 2025: -1.6; 2026: -1.5; 2027: -1.3; 2028: -1.1; 2033: -1.1; 2043: -1.4.
  - Contribution from real GDP growth (In Percent): 2020: 0.9; 2021: 0.4; 2022: 0.4; 2023: -0.1; 2024: -0.3; 2025: -0.4; 2026: -0.4; 2027: -0.4; 2028: -0.4; 2033: -0.5; 2043: -0.7.
  - Contribution from real exchange rate depreciation: 2020: -6.6; 2021: 3.0; 2022: -0.5; additional years not fully displayed in source excerpt.
- Other identified debt-creating flows: all entries 0.0 for listed categories (Privatization receipts, Recognition of contingent liabilities, Debt relief, Other debt creating or reducing flow).
- Residual (In Percent of GDP):  
  - 2020: 2.2; 2021: 1.6; 2022: 3.1; 2023: -1.4; 2024: -0.1; 2025: -0.1; 2026: -0.2; 2027: -0.1; 2028: -0.1; 2033: -0.1; 2043: -0.9.  
  - Historical average: 0.1; Projections average: -0.2.

### Sustainability indicators and financing pressures
- PV of public debt-to-GDP ratio (selected years shown): 23.3; 20.1; 20.3; 20.9; 21.6; 22.3; 23.1; 28.2; 42.0 (table partial).
- PV of public debt-to-revenue and grants ratio (selected years shown): 286.4; 220.7; 221.9; 220.9; 221.1; 225.8; 231.3; 272.4; 372.7.
- Debt service-to-revenue and grants ratio 3/ (In Percent): 13.5; 10.1; 10.2; 6.9; 24.2; 41.4; 59.1; 73.8; 87.2; 119.8; 193.1.
- Gross financing need 4/ (In Percent of GDP): 3.2; 3.1; 2.7; 2.4; 4.5; 6.4; 8.5; 9.9; 11.3; 15.4; 25.7.
- PV of contingent liabilities (not included in public sector debt): all entries 0.0 in the displayed table.

### Key macroeconomic and fiscal assumptions (selected)
- Real GDP growth (in percent): 2020: -3.3; 2021: -1.8; 2022: -1.5; 2023: 0.3; 2024: 1.2; 2025: 1.5; 2026–2033: 1.5 (each year); 2043: 1.5.  
  - Historical average: 0.6; Projections average: 1.4.
- Average nominal interest rate on external debt (in percent): 2020: 1.0; 2021: 0.9; 2022: 0.8; 2023: 0.8; 2024: 0.8; 2025: 0.8; 2026: 0.9; 2027: 0.9; 2028: 1.0; 2033: 1.0; 2043: 0.8.  
  - Historical average: 0.7; Projections average: 0.9.
- Average real interest rate on domestic debt (in percent): 2020: -15.9; 2021: -14.2; 2022: -20.2; 2023: -24.4; 2024: -11.3; 2025: -10.4; 2026: -9.3; 2027: -7.9; 2028: -6.5; 2033: -5.5; 2043: -4.7.  
  - Historical average: -10.6; Projections average: -8.9.
- Real exchange rate depreciation (in percent, + indicates depreciation): 2020: -40.7; 2021: 28.9; 2022: -4.4; later years partially shown (2023 onwards entries not fully displayed).
- Inflation rate (GDP deflator, in percent): 2020: 20.6; 2021: 19.3; 2022: 27.6; 2023: 33.4; 2024: 14.0; 2025: 12.9; 2026: 11.5; 2027: 9.7; 2028: 8.1; 2033: 7.0; 2043: 7.0.  
  - Historical average: 13.7; Projections average: 11.4.
- Growth of real primary spending (deflated by GDP deflator, in percent): 2020: -5.5; 2021: 6.9; 2022: -5.9; 2023: 9.1; 2024: 6.8; 2025: 5.6; 2026: 6.4; 2027: 1.6; 2028: 2.2; 2033: 2.4; 2043: 3.0.  
  - Historical average: -3.7; Projections average: 4.1.
- Primary deficit that stabilizes the debt-to-GDP ratio 5/ (In Percent of GDP): 2020: 5.3; 2021: -2.9; 2022: 1.0; 2023: 5.8; 2024: 2.1; 2025: 2.1; 2026: 2.1; 2027: 1.8; 2028: 1.6; 2033: 1.7; 2043: 3.0.  
  - Historical average: 1.1; Projections average: 2.2.

### Sensitivity analysis highlights (public and public guaranteed external debt; public debt)
- Multiple scenario and bound-test tables display projected indicators across 2023–2043. Selected baseline and scenario sample values (tables truncated in source):
  - Baseline paths and alternative scenarios (A1) show rising indicators over time; tailored tests (natural disaster, combined contingent liabilities) produce substantially higher ratios and breaches of benchmarks in many years (bold values indicate threshold breaches in source tables).
  - Public debt benchmark: 55 (constant across listed years).
  - Sample public debt projections (In Percent of GDP, Baseline): 2023: 20; 2024: 20; 2025: 21; 2026: 22; 2027: 22; 2028: 23; 2029: 24; 2030: 25; 2031: 26; 2032: 27; 2033: 28; through 2043 rising to 42.
  - PV of Debt-to-Revenue Ratio (selected Baseline values): 221; 222; 221; 221; 226; 231; 238; 245; 254; 263; 272; 283; 295; 307; 311; 322; 333; 346; 355; 363; 373 (years as in table).
  - Debt Service-to-Revenue Ratio (selected Baseline values): 7; 24; 41; 59; 74; 87; 95; 101; 107; 113; 120; 125; 132; 140; 144; 150; 156; 164; 173; 183; 193.
  - Sensitivity tests indicate that natural disaster and combined contingent liability scenarios can drive indicators substantially above benchmarks (e.g., Natural disaster scenario shows PV of Debt-to-Revenue and PV of debt-to-GDP rising dramatically in many projection years).

### Authorities' statement, reforms, and policy actions (Statement by Mr. Bevilaqua, Mr. Saraiva, Ms. Florestal — January 23, 2023)
- Appreciation and program context:
  - Authorities thanked the Managing Director, WHD management, the mission chief and team for support and Technical Assistance operations, and for completion of the first Review of the SMP in December (SMP approved in June 2022).
  - Emphasis on the importance of the Food Crisis Window (FSW) disbursement under the Rapid Credit Facility (RCF).
- Progress on reforms and governance:
  - Completed reforms: consolidation in the Single Treasury Account of central budgetary agencies’ bank accounts; Medium-Term Budget Framework; substantial reduction of unsustainable fuel subsidies; adoption and publication of a new tax code and associated procedure code; regular publication of beneficial owners of public procurement contracts.
  - BRH reforms: progress toward risk-based supervision and strengthening the monetary policy framework; steps to bring ALM/CFT law to international standards; implementation of Action Plan under FATF’s International Cooperation Review Group.
- Policy commitments and near-term priorities:
  - Authorities determined to implement the SMP to rejoin sustainable and inclusive growth path; priority to achieve minimum economic, political, and social stability to create conditions for a structured medium-term program and to build the one-year track record to access an Upper Credit Tranche (UCT) financing arrangement.
  - BRH committed to finalize amendments to its organic act to strengthen governance, mandate, and autonomy; use policy tools (interest rates and reserve requirements) to address inflationary pressures and exchange rate volatility; phase out foreign exchange repurchase requirements and constrain FX interventions to disorderly situations; purchase foreign exchange as conditions allow to secure adequate NIR.
- Social and balance of payments context:
  - Haiti’s BOP under pressure after four successive years of GDP contraction, surge in food and energy prices, limited external assistance, and decreasing remittances.
  - Humanitarian situation: United Nations warned catastrophic hunger; WFP notes nearly half the population not having enough to eat; WFP and FAO rank Haiti at catastrophic level on integrated Food Security Phase Classification Index.
  - FSW proceeds to be used for cash transfers and food rations; FY23 Budget includes temporary agricultural, environment protection, and public sector jobs, youth vocational training, and public transit subsidy programs for registered buses.
- Transparency, safeguards, and financial sector measures:
  - Authorities pledged strict governance arrangements for procurement and emergency spending; strengthen PFM practices; upgrade transparency and audit capacity; law governing the Supreme Court of Auditors and Administrative Disputes (CSCCA) under review to guarantee standards; publish comprehensive monthly budget implementation reports no later than 45 days after month-end.
  - Central Bank to continue implementing 2019 Safeguards Assessment recommendations and accelerate transition to IFRS.
  - Governance Diagnostic requested; recommendations to inform second review of the SMP.
- Innovation and inclusion:
  - Fiscal and monetary authorities exploring innovative digital tools with WB and IDB support to enhance financial inclusion; BRH testing a CBDC to diversify channels for public transfers.
- Security, anti-corruption, and stabilization:
  - Accelerated steps to quell gang violence, fight corruption, and strengthen public institutions: HNP arrests of high-profile gang leaders; anti-corruption unit intensifying action against embezzlement and money laundering; Economic and Social Assistance Fund governing board reconvened and publishing quarterly operations reports.
  - BRH issued instructions on sanction regime against gangs and criminal activities (November 2022) following UN Security Council resolution.
- Request for continued international support:
  - Authorities count on signaling effects of SMP review and FSW disbursement to catalyze donor funds; emphasize need for IMF and international community support, including posting a Resident Representative and resuming in-person missions as conditions allow.

*Sources: Country authorities; and staff estimates and projections.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1htiea2023002.pdf_