IMF Management Approves the First Review New Staff Monitored-Program with Haiti

IMF News, May 1, 2025

Source details

Canonical URL: IMF Management Approves the First Review New Staff Monitored-Program with Haiti

Management of the International Monetary Fund (IMF) approved on April 15, 2025 the first review of Haiti’s Staff-Monitored Program (SMP).
Press Release No. 25/126.
The SMP is designed to support the authorities’ economic policy objectives, build a track record of reform implementation, and take into account Haiti’s fragility and capacity constraints linked to security.
SMPs are informal arrangements between national authorities and IMF staff to monitor the authorities’ economic program and do not entail endorsement by the IMF Executive Board. SMP Staff reports are issued to the Board for information.
The SMP could pave the way for financial assistance from the Fund under the Upper Credit Tranche (UCT) by establishing a track record of policy implementation.

Haiti faces a multidimensional crisis with a challenging outlook which is highly uncertain.
The country is affected by both global and country-specific shocks, which have worsened its fragility since the negotiation of the SMP.
Risks to the outlook are tilted to the downside and include worsening insecurity that would constrain activity, the ability to implement reforms, and the attraction of aid and foreign direct investment.
The supply-side shock caused by the security crisis will continue to suppress growth and feed inflation unless the security outlook improves.
Restoration of security is the priority.

Despite domestic and global difficulties, the authorities are firmly committed to implement this SMP and have managed to contain the impact of the various shocks, thereby averting even worse economic outcomes.
Net international reserves were valued at over US$1.1 billion at the end of December 2024.
Despite the political transition and insecurity both the Ministry of Finance and the Bank of the Republic of Haiti (the Central Bank) have remained continuously engaged.
Implementation under the SMP has been broadly satisfactory and its objectives remain achievable.
All quantitative targets have been met, with a comfortable margin.
Of the seven structural benchmarks assessed under this review, six were implemented and one is expected to be met by June (due to constraints related to insecurity).
The high-level Program Monitoring Committee meets with IMF staff on a continuous basis, demonstrating ownership and support for the SMP.

Fund management welcomes the authorities’ publication of the Governance Diagnostic Report.
The Governance Diagnostic Report and action plan should provide a road map for reforms to enhance governance and will require capacity development support from the Fund and development partners.
The FY2023 financial audit of the BRH is urgent; its eventual publication by August 2025 would be important for demonstrating transparency.
Strengthening governance reforms is paramount to help Haiti exit from fragility, ensure macroeconomic stability, and build trust with the private sector and development partners.

An urgent government priority is re-starting the mobilization of revenue to support the country’s massive development needs and boost well-targeted spending.
The measures under the SMP should help achieve these goals.
Continued strengthening of the social safety net is essential to cushion the impact of the shocks on the population and alleviate widespread poverty.
The spending commitments previously indicated by the authorities using Food Shock Window resources should be audited in line with SMP commitments.
The fiscal and monetary authorities’ commitment to keeping monetary financing of the deficit at zero is commendable and should continue.

A government-led strategy to continue to strengthen the economy’s resilience to multiple shocks requires the financial support of the international community.
This assistance is indispensable to allow quality spending, over the short, medium, and long term. Without it, Haiti will continue to suffer large import compression.
External assistance should take the form of grants.
The authorities should avoid contracting non-concessional loans, to ensure consistency with the SMP commitments. Non-concessional loans would not only be against SMP commitment. It would also undermine debt sustainability.

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 on governance and capacity development.

IMF Management Approves the First Review New Staff Monitored-Program with Haiti, May 1, 2025