## IMF Executive Board Concludes 2019 Article IV Consultation with Haiti

_IMF News, January 28, 2020_

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**Canonical URL:** [IMF Executive Board Concludes 2019 Article IV Consultation with Haiti](https://www.imf.org/en/news/articles/2020/01/28/pr2021-haiti-imf-executive-board-concludes-2019-article-iv-consultation)

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## Bibliographic details
- Published: January 28, 2020

---

### Context and recent developments
- Since March 2019, Haiti has been experiencing a protracted political crisis and prolonged civil unrest that has at times shut down most economic activity.
- Economic effects during FY2019 (ending September 30):
  - Inflation exceeded 20 percent year-on-year in September.
  - Output is estimated to have contracted by an estimated 1.2 percent in fiscal year 2019.
  - The exchange rate depreciated by 25 percent over the same period.
  - Fiscal deficit widened to 3.8 percent of GDP in FY2019.
  - Domestic arrears rose sharply.
  - Public debt-to-GDP ratio jumped from 40 percent to 47 percent over the fiscal year.
- Policy responses:
  - The ministry of finance is implementing measures to improve revenue collection and better control spending.
  - In November, the ministry signed a new agreement with the central bank to strengthen fiscal discipline and limit monetary financing of the government.
  - The central bank has been adjusting its interest rates to contain inflation while trying to support the private sector through the recession.

### Outlook and scenarios
- Baseline projection (assuming some political stabilization in 2020 without major political or economic reforms):
  - Growth would improve but remain negative in 2020 and below 1.5 percent over the medium term.
  - Inflation is expected to decline slightly before eventually falling to below 10 percent by 2025.
- Risks:
  - Primarily on the downside if political instability persists.
  - Upside potential if political stability is restored, a new government committed to reforms is appointed, and international support returns—leading to higher investment and potential growth.

### Executive Board assessment and policy recommendations
- Overall concerns and priorities:
  - Urgency of restoring political and macroeconomic stability, addressing poverty and inequality, and tackling corruption.
  - Call for a broad‑based national dialogue and continued close cooperation with donors and the Fund, including through technical assistance.
  - Welcome of the Country Engagement Strategy as a basis for future Fund engagement.
- Fiscal policy:
  - Severe fiscal constraints necessitate shifting scarce resources away from non‑priority spending toward social programs and investment.
  - Importance of limiting monetary financing of fiscal deficits and preparing a notional budget for FY2020.
  - Encourage measures to boost domestic revenues and reduce exemptions in the near term.
  - Strengthen tax administration, prepare a resolution plan for budget arrears, and bolster public financial management.
  - Commendation for progress on the new national plan for social protection and emphasis on advancing its approval and focusing on a limited number of cash transfer programs.
- Governance and anti‑corruption:
  - Urgency of updating anti‑corruption policy priorities, including setting up the steering committee envisioned in the 2009 anti‑corruption strategy.
  - Need to enforce the asset declaration system and conduct regular audits of state‑owned enterprises and other public entities.
- Monetary and financial sector:
  - Encourage authorities to allow the exchange rate to adjust in an orderly fashion.
  - Recommend setting a quantitative monetary target and advancing other institutional reforms.
  - Support for the central bank’s efforts to deepen financial intermediation and inclusion, including via fintech.
- Energy and structural reforms:
  - Well‑sequenced reform of the energy sector is crucial for fiscal sustainability and higher growth; must be accompanied by clear communications and measures to offset the impact on vulnerable groups.
  - Encourage overhaul of the management and performance of EDH, work with stakeholders to reduce electricity costs, improve reliability and efficiency of energy supply, and lower the related fiscal burden.
  - Broader structural reforms needed to improve competitiveness: streamline regulations, remove infrastructure bottlenecks, strengthen property rights, and enhance governance.
  - Building resilience to natural disasters is a priority.
- Data and capacity:
  - Urged steps to improve the quality and timeliness of economic data, with the help of further Fund technical assistance.

### Key statistics (Selected Economic and Financial Indicators)
- Nominal GDP (2018): US$9.7 billion
- GDP per capita (2018): $890
- Population (2016): 10.847 million
- Percent of population below poverty line (2012): 58

- Output — Real GDP growth (%):
  - 2017: 1.2
  - 2018: 1.5
  - 2019: -1.2
  - 2020 (proj): -0.4
  - 2021 (proj): 0.9

- Prices — Inflation, (end of period) (%):
  - 2017: 15.4
  - 2018: 13.3
  - 2019: 20.1
  - 2020 (proj): 17.5
  - 2021 (proj): 14.5

- Central Government Finances (In percent of GDP):
  - Revenue and grants:
    - 2017: 17.7
    - 2018: 17.3
    - 2019: 13.6
    - 2020 (proj): 13.4
    - 2021 (proj): 14.2
  - Domestic Revenue:
    - 2017: 14.0
    - 2018: 13.0
    - 2019: 10.8
    - 2020 (proj): 10.0
    - 2021 (proj): 11.1
  - Grants:
    - 2017: 3.7
    - 2018: 4.3
    - 2019: 2.8
    - 2020 (proj): 3.4
    - 2021 (proj): 3.0
  - Expenditures:
    - 2017: 19.0
    - 2018: 16.1
    - 2019: 15.6
    - 2020 (proj): 16.2
    - 2021 (proj): (not provided)
  - Current expenditures (percent of GDP):
    - 2017: 12.2
    - 2018: 12.7
    - 2019: 12.5
    - 2020 (proj): 11.5
    - 2021 (proj): 11.4
  - Capital expenditures (percent of GDP):
    - 2017: 5.3
    - 2018: 6.2
    - 2019: 3.6
    - 2020 (proj): 4.1
    - 2021 (proj): 4.8
  - Overall balance of the nonfinancial public sector, incl. grants2:
    - 2017: -0.9
    - 2018: -2.9
    - 2019: -3.8
    - 2020 (proj): -3.4
    - 2021 (proj): -3.1
  - Total public sector debt:
    - 2017: 38.3
    - 2018: 39.9
    - 2019: 47.0
    - 2020 (proj): 46.1
    - 2021 (proj): 44.9

- Money and Credit:
  - Broad money (% change):
    - 2017: 12.9
    - 2018: 13.7
    - 2019: 18.9
    - 2020 (proj): 18.6
    - 2021 (proj): 17.0
  - Credit to private sector (% change):
    - 2017: 4.5
    - 2018: 9.9
    - 2019: 14.6
  - 3-month BRH bond interest rate (%):
    - 2017: 12.0
    - 2018: 22.0
    - 2019: 19.4
    - 2020 (proj): 16.4

- Balance of Payments:
  - External current account balance (incl. official grants):
    - 2017: -1.0
    - 2018: -3.9
    - 2019: -2.0
    - 2020 (proj): -1.1
  - External current account balance (excl. official grants):
    - 2017: -5.6
    - 2018: -7.9
    - 2019: -4.8
    - 2020 (proj): -3.2
    - 2021 (proj): -4.1
  - Foreign direct investment (FDI):
    - 2018: 1.1
    - 2019: 1.3
  - Reserves (in months of imports of the following year):
    - 2017: 4.4
    - 2018: 4.7
    - 2019: 4.9
  - External public debt:
    - 2017: 24.2
    - 2018: 23.5
    - 2019: 27.4
    - 2020 (proj): 25.4
    - 2021 (proj): 24. 2

- Exchange Rate:
  - Real effective exchange rate (% change) (+ appreciation):
    - 2017: -10.8

- Nominal GDP:
  - Nominal GDP (millions of gourdes):
    - 2017: 551,911
    - 2018: 631,829
    - 2019: 732,545
    - 2020 (proj): 868,582
    - 2021 (proj): 1,015,809
  - Nominal GDP (millions of U.S. dollars):
    - 2017: 8,409
    - 2018: 9,658
    - 2019: 8,708
    - 2020 (proj): 8,533
    - 2021 (proj): 8,842

*Source: Press Release No. 20/21, IMF Executive Board Concludes 2019 Article IV Consultation with Haiti, January 28, 2020.*

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## References

- [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)
- [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)
- [Haiti and the IMF](http://www.imf.org/external/country/HTI/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
- [The IMF and Good Governance -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/the-imf-and-good-governance)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2020/01/28/pr2021-haiti-imf-executive-board-concludes-2019-article-iv-consultation_