Haiti: Ex Post Assessment of Longer-Term Engagement

IMF Staff Country Reports, January 5, 2015

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Two Fund-supported programs: 2006 program and 2010 program.
2006 program began as Haiti was making progress toward macroeconomic stabilization.
2010 program began in the aftermath of a devastating earthquake and faced a huge inflow of aid and the need to scale up public investment.
Shared main objectives:
- Preserving macroeconomic stability.
- Creating conditions for a sustained growth takeoff through structural reform.
- Fostering reforms to address long-standing governance and transparency concerns.
- Improving revenue mobilization to increase fiscal space and reduce fiscal vulnerabilities.
Growth target: rise to 4-6 percent, described as an ambitious objective given Haiti’s long history of serious fragility with near zero or negative growth.

Inflation remained in single digits despite a series of shocks.
International reserves increased by more than expected, helping to limit exchange rate volatility amid a large aid inflow.
Program performance criteria effectively eliminated central bank credit to the government, reducing risks of fiscal dominance.
Structural reforms advanced, particularly during the 2006 program which coincided with the HIPC process.
Revenue administration improved, with tax revenue rising steadily over the two programs.
Achievements characterized as notable given Haiti’s history.

Fiscal policy and fiscal space:
- Improved revenue mobilization contributed to increased fiscal space and reduced fiscal vulnerabilities.
- Elimination of central bank credit to the government reduced fiscal dominance risks.
Public financial management and governance:
- Structural reforms targeted governance and transparency concerns; progress was made especially during the 2006 program.
External sector and reserves:
- International reserves increased more than expected, aiding exchange rate stability during large aid inflows.
Program design and shock responsiveness:
- The 2010 program had to address post-earthquake challenges, including managing a large aid influx and scaling public investment.

Continue strengthening revenue administration to further increase fiscal space.
Maintain program constraints that prevent central bank financing of the government to guard against fiscal dominance.
Sustain efforts on governance and transparency reforms to support structural change and durable growth.
Manage large aid inflows to preserve exchange rate stability and build international reserves.

Source: Haiti: Ex Post Assessment of Longer-Term Engagement, IMF Staff Country Report No. 2015/004.