A mission of the International Monetary Fund (IMF), led by Mr. Chris
Walker, visited the northern region of Haiti (Cap Haitien, Milot, Caracol,
Ouanaminthe) and Port-au-Prince from June 3 to 15, 2018 to conduct the 2018
Article IV consultation and to hold discussions on the first review of
Haiti under its Staff Monitored Program (SMP).
At the end of the visit, Mr. Walker issued the following statement:
"Based on preliminary results, Haiti’s growth outlook remains positive: GDP
growth has accelerated slightly, buoyed by public investment, to reach
about 2 percent for the current fiscal year ending in September. Annual
average inflation remains below 15 percent. The current account deficit is
expected to be contained at a relatively high level of 4 percent of GDP
this fiscal year amid investment-related imports and higher world prices
for petroleum products and grains, which constitute Haiti’s main imports
“The medium-term outlook is generally positive, linked to Haiti’s potential
for more rapid growth following the envisaged implementation of structural
reforms, but downside risks are significant. Economic activity is expected
to accelerate in 2019 on the back of both public and private investment. A
reduction of the public-sector deficit should allow the private sector to
benefit from new financing opportunities. The reduction of the fiscal
deficit should also limit monetary financing, which in turn should reduce
inflationary pressures. However, the country's economy is subject to
significant risks, including externally in the form of climate risks and
those related to changes in global oil prices.
"The performance of the authorities’ program was satisfactory in the first
quarter of 2018. The budget deficit was below 2.2 percent of GDP for the
fiscal year to date, after adjusting for expenditures on recovery from
Hurricane Matthew. All the structural benchmarks for end-March 2018 were
met, one with a delay. All performance criteria were met, except for the
floor of the fuel stabilization fund, which was missed due to
higher-than-expected global oil prices. Solid economic policies implemented
by the authorities under the SMP are expected to catalyze external
resources provided by Haiti’s technical and financial partners.
“The IMF team and the Haitian authorities have agreed on fiscal policy
measures for fiscal year 2018 to achieve the program's objectives. These
measures should enable the state to create the fiscal space needed to
improve social programs and increase public investment, particularly in
health, education, and social services. These measures should also allow
the authorities to contain the budget deficit at a sustainable level,
thereby limiting the need for central bank financing of the central
government.
"We also agreed with the authorities specifically on the need to improve
domestic resource mobilization in order to create fiscal space for priority
expenditures. In this regard, the mission welcomes the government's
intention to eliminate fuel price subsidies. The mission and the government
also agreed on the importance of implementing key social measures to
mitigate the impact of the subsidy reform on the most vulnerable segments
of the population.
"Staff congratulated the Haitian authorities for measures to reform the
electricity sector and to contain fiscal losses linked to the operations of
the public electricity utility (EDH). In addition to reducing the losses
due to EDH’s operations, the measures will help to ensure sustainable
medium-term growth of the electricity sector and improve the environment
for private investment. The team commended the authorities’ progress
towards greater transparency of the financial and public accounts sectors.
“Together with the authorities, we agreed on the need to accelerate the
pace of structural reforms that are essential for sustaining private
sector-led growth, thereby boosting economic growth and reducing poverty
more broadly. The mission encouraged the authorities to move forward with
reforms aimed at streamlining taxation and strengthening tax
administration. The mission and the authorities agreed that higher levels
of both public and foreign direct investment would help Haiti to achieve
higher growth over the long term.
"The IMF team would like to thank the authorities for their warm
hospitality and constructive dialogue during the mission.”
The IMF mission was hosted by Mr. Jude Salomon, Minister of Economy and
Finance and Mr. Jean Baden Dubois, Governor of the Bank of the Republic of
Haiti; in addition, it held discussions with other ministers, including the
Minister of Planning and External Cooperation, the Minister of Labor and
Social Affairs, and the Minister of Agriculture; and conducted meetings
with members of Parliament, other senior public officials, and
representatives of the private sector and civil society.
