IMF Executive Board Concludes 2024 Article IV Consultation with Haiti

IMF News, December 10, 2024

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IMF Executive Board Concludes 2024 Article IV Consultation with Haiti

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• Published: December 10, 2024

Overview and Context

• The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Haiti.
• Haiti faces an unprecedented multidimensional crisis encompassing humanitarian, economic, social, and security problems.
• Since the last 2019 Article IV consultation, Haiti experienced: the pandemic; a devastating earthquake in 2021; cholera outbreaks; and economic spillovers of the war in Ukraine that led to a food crisis and acute hunger.
• Deterioration of security has magnified these problems, causing a surge in displaced people and a significant drop in potential growth.
• Haiti’s economy has a low tax base and a large informal sector that relies heavily on volatile remittance flows.

Macroeconomic Outlook and Risks

• The macroeconomic outlook is challenging and subject to elevated uncertainty.
• The supply-side shock caused by the security crisis would continue to greatly affect growth and feed inflation unless the security outlook improves.
• Fiscal revenues are only slowly recovering; remittances will continue to finance consumption but reflect an exodus of human capital that could undermine sustainable recovery.
• Growth projection: barely positive in 2025 and stabilization at only 1½ percent over the medium term (pending further improvements in the security outlook).

Executive Board Assessment — Key Messages

• Directors agreed with the thrust of the staff appraisal and acknowledged the severity of Haiti's multidimensional crisis and the uncertain outlook due to deteriorating security.
• Recognition of authorities’ achievements in implementing reforms to strengthen economic resilience and restore macroeconomic stability.
• Normalization of security is essential to improve economic prospects; international community support is critical for security normalization, reform efforts, and rebuilding critical infrastructure.
• Welcome for the authorities’ interest in a new Staff Monitored Program as a useful policy anchor.

Policy Recommendations and Priorities (Directors’ Guidance)

• Revenue mobilization:
  • Further advance the authorities’ revenue mobilization agenda to address development needs, notably through implementation of the new tax code to broaden the tax base.
• Public spending and audit:
  • Step up efforts to enhance quality, efficiency, and transparency of public spending.
  • Continue strong scrutiny and prompt audit of resources provided through the Fund’s Food Shock Window.
• Debt and financing:
  • Preserve debt sustainability; avoid non‑concessional lending.
• Social protection and inclusion:
  • Strengthen social safety nets to protect the most vulnerable and alleviate widespread poverty.
  • Continue endeavors to foster gender equality.
• Monetary and financial policies:
  • Maintain monetary financing of the deficit at zero.
  • Continue efforts to promote price stability and enhance the monetary policy framework.
  • Conclude and publish the 2023 central bank audit.
  • Limit FX interventions to smoothing excessive exchange rate volatility.
  • Closely monitor rising banking sector vulnerabilities, particularly from non‑performing loans, and continue improvements to regulatory and supervisory frameworks.
  • Further strengthen the AML/CFT framework.
• Structural and governance reforms:
  • Strongly underscore progress in implementing structural and governance reform agenda to lift potential growth.
  • Publish the governance diagnostic assessment and accompanying action plan as soon as finalized.
  • Build resilience to natural disasters and foster financial inclusion.
• Data and capacity development:
  • Improve data adequacy for surveillance, prioritizing the quality and timeliness of monetary and reserve assets data.
  • Continue well‑prioritized engagement with the Fund, particularly through capacity development guided by the Strategy for Fragile and Conflict Affected States.

Key Economic and Financial Indicators, FY2021–27

(Fiscal year ending September 30; "Proj." denotes projections)

National Income and Prices (Change over previous year; unless otherwise indicated)

• GDP at constant prices:
  • FY2021: -1.8
  • FY2022: -1.7
  • FY2023: -1.9
  • FY2024: -4
  • FY2025: 1
  • FY2026: 1.5
  • FY2027: (not provided)
• GDP deflator:
  • FY2021: 19.3
  • FY2022: 29.8
  • FY2023: 31.5
  • FY2024: 29.1
  • FY2025: 23.2
  • FY2026: 17.6
  • FY2027: 10.4
• Consumer prices (period average):
  • FY2021: 15.9
  • FY2022: 27.6
  • FY2023: 44.1
  • FY2024: 25.9
  • FY2025: 19.8
  • FY2026: 15.4
  • FY2027: 10.6
• Consumer prices (end-of-period):
  • FY2021: 13.1
  • FY2022: 38.7
  • FY2023: 31.8
  • FY2024: 27.9
  • FY2025: 18.7
  • FY2026: 12.2
  • FY2027: 9.3

External Sector

• Exports (goods, valued in U.S. dollars, f.o.b.):
  • FY2021: 27.7
  • FY2022: 13.5
  • FY2023: -25.5
  • FY2024: -20
  • FY2025: 10
  • FY2026: 14.4
  • FY2027: 13.6
• Imports (goods, valued in U.S. dollars, f.o.b.):
  • FY2021: 7.8
  • FY2022: -1
  • FY2023: -9
  • FY2024: 11
  • FY2025: 6
  • FY2026: 5.5
• Remittances (valued in U.S. dollars):
  • FY2021: 22.5
  • FY2022: -7.3
  • FY2023: 0.1
  • FY2024: 5
• Real effective exchange rate (eop; + appreciation) 1/:
  • FY2021: -5
  • FY2022: 13.8
  • FY2023: 10.9
  • FY2024: 33
  • FY2025: …

Money and Credit (valued in gourdes)

• Credit to private sector:
  • FY2021: 15.2
  • FY2022: 17.4
  • FY2023: -6.2
  • FY2024: -5.3
  • FY2025: 21.1
  • FY2026: 14.7
  • FY2027: 12
• Base money:
  • FY2021: 21.5
  • FY2022: 23.1
  • FY2023: 3.1
  • FY2024: 11.5
• Broad money:
  • FY2021: 38.2
  • FY2022: 4.6
  • FY2023: 4.1
  • FY2024: 15.5

Central Government (In percent of GDP; unless otherwise indicated)

• Overall balance (including grants):
  • FY2021: -2.3
  • FY2022: 0.9
  • FY2023: 7.2
  • FY2024: -0.1
  • FY2025: -1.4
  • FY2026: -1.5
• Domestic revenue:
  • FY2021: 5.9
  • FY2022: 5.3
  • FY2023: 6.4
  • FY2024: 4.9
  • FY2025: 5.7
• Grants:
  • FY2021: 1.3
  • FY2022: 6.8
  • FY2023: 1.2
  • FY2024: 0.7
  • FY2025: 0.3
• Expenditures:
  • FY2021: 8.3
  • FY2022: 4.5
  • FY2023: 6.2
  • FY2024: 7.4
• Current expenditures:
  • FY2021: 3.4
  • FY2022: 4.2
  • FY2023: 4.3
• Capital expenditures:
  • FY2021: 1.9
  • FY2022: 1.6
  • FY2023: 1.1
  • FY2024: 2.1
  • FY2025: 3.2
• Overall balance of the nonfinancial public sector 2/:
  • FY2021: -2.2
  • FY2022: 0
  • FY2023: 6.6

Savings and Investment

• Gross investment:
  • FY2021: 18
  • FY2022: 13.9
  • FY2023: 6.1
  • FY2024: 10.7
  • FY2025: 14.2
  • Of which: public investment (not separately provided)
• Gross national savings:
  • FY2021: 18.5
  • FY2022: 9.8
  • FY2023: 13
• External current account balance (incl. official grants):
  • FY2021: 0.4
  • FY2022: -3.5
  • FY2023: -0.5
  • FY2024: -0.6
  • FY2025: -0.9
  • FY2026: -1.2
• Net fuel exports:
  • FY2021: -3.1
  • FY2022: -4.5
  • FY2023: -3.6
  • FY2024: -2.4

Public Debt

• External public debt (medium and long-term, eop):
  • FY2021: 12.9
  • FY2022: 12.3
  • FY2023: 1.4
  • FY2024: 2.7
• Total public sector debt (end-of-period):
  • FY2021: 28.9
  • FY2022: 29.5
  • FY2023: 28.5
  • FY2024: 11.4
• External public debt service 3/:
  • FY2021: 9.4
  • FY2022: 8.1
  • FY2023: 11.8
  • FY2024: 3.3
  • FY2025: 4.7

Memorandum Items (In millions of dollars, unless otherwise indicated)

• Net international reserves 4/:
  • FY2021: 456
  • FY2022: 119
  • FY2023: 391
  • FY2024: 960
  • FY2025: 1,159
  • FY2026: 1,341
  • FY2027: 1,501
• Gross international reserves:
  • FY2021: 2,534
  • FY2022: 2,067
  • FY2023: 2,346
  • FY2024: 2,496
  • FY2025: 2,621
  • FY2026: 2,771
  • FY2027: 2,921
• In months of imports of the following year:
  • FY2021: 5.6
• Nominal GDP (millions of gourdes):
  • FY2021: 1,699,208
  • FY2022: 2,168,223
  • FY2023: 2,798,324
  • FY2024: 3,468,166
  • FY2025: 4,315,508
  • FY2026: 5,151,163
  • FY2027: 5,772,370

Notes and Footnotes (as provided)

• 1/ The real effective exchange rate for FY2024 reflects August 2024 data.
• 2/ Includes transfers to the state-owned electricity company (EDH), and unsettled payment obligations.
• 3/ In percent of exports of goods and nonfactor services. Includes debt relief.
• 4/ Excludes banks’ FX deposits, Venezuela escrow account, IMF liabilities (except Food Shock Window), and swaps.

Source: IMF press release, December 10, 2024.

References

• Haiti and the IMF
• IMF Policy Advice -- A Factsheet
• Press Releases
• PRESS CENTER
• http://www.IMF.org/external/np/sec/misc/qualifiers.htm
• https://www.imf.org/en/home