IMF Management Approves a New Staff Monitored-Program with Haiti

IMF News, August 30, 2023

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Canonical URL: IMF Management Approves a New Staff Monitored-Program with Haiti

Management of the International Monetary Fund (IMF) approved on June 29, 2023, a Staff-Monitored Program (SMP) with Haiti covering the period through March 2024.
The new 9-month SMP runs through March 31, 2024.
The SMP may be extended by three additional months at the request of the authorities through June 2024.
SMPs are informal arrangements between national authorities and IMF staff to monitor the authorities’ economic program and establish a track record of policy implementation; they do not entail endorsement by the IMF Executive Board and are not accompanied by IMF financial assistance.
SMP Staff reports are issued to the Board for information.

Haiti faces a challenging macroeconomic outlook amid a dire humanitarian crisis.
The country has been hit hard by economic spillovers from Russia’s invasion of Ukraine, including food price inflation that has triggered a hunger crisis.
This global shock has been compounded by a highly volatile security situation in Haiti, which has heightened the economy’s fragility.

Building on progress achieved under the previous SMP, which was satisfactorily concluded in May 2023, the new SMP should contribute to macroeconomic stability by helping Haiti sustain recent policy reforms designed to enhance economic resilience and governance.
Signs of resilience have emerged:
- Net international reserves have been rebuilt, although from a low base.
- Custom duties helped boost fiscal revenue by 50 percent in the first six months of the fiscal year of 2023 starting in October 2022.
- Monetary financing of the budget has declined.
- The exchange rate has recently stabilized.
The new SMP is designed by IMF staff and the Haitian authorities, keeping in mind Haiti’s fragility and capacity constraints while supporting the authorities’ economic policy objectives.

Sustaining progress on reforms to strengthen governance is paramount to ensure inclusive growth and build the trust of the private sector and of development partners.
Governance and anti-corruption measures were key components of reforms under the 2022 SMP and will continue to be key in the new SMP.
The authorities have acted to strengthen accountability in the use of public resources and have boosted the transparency of public procurement for emergency resources.
Recent finalization of revisions to the Central Bank and to the AML/CFT legal frameworks are described as critical for improving governance and transparency.
The authorities have requested an IMF Governance Diagnostic; Fund management welcomes this request.
- The diagnostics are designed to help inform governance and anti-corruption strategies, including sequencing of reforms.

The new SMP should help strengthen Haiti’s domestic revenue mobilization and raise taxes by supporting the implementation of the tax code.
Fiscal measures under the SMP are expected to contribute to continued lowering the monetary financing of the budget.
The fiscal measures should also help enhance transparency and accountability in the use of public spending, continue to enhance the AML/CFT framework, and build administrative and institutional capacity in Haiti.
In line with the Fund Strategy for Fragile and Conflict-Affected States, IMF staff will continue to coordinate closely with Haiti’s main development partners, particularly given the critical role of development partners on capacity development and financing.

IMF Communications Department — Press Release No. 23/298 (August 30, 2023).