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View of a shanty town in Port-au-Prince, Haiti. (Photo: Blockchain Land)

IMF urges Haiti to improve economic reporting

View of a shanty town in Port-au-Prince, Haiti. (Photo: Blockchain Land)

The board of the International Monetary Fund (IMF) has advised Haitian authorities to take steps to improve the quality and timeliness of economic data with the help of the fund’s technical assistance.

The IMF, however, understands that several occurrences have impeded the process of submitting information.

“Since March 2019, Haiti has been experiencing a protracted political crisis and prolonged civil unrest that has at times shut down most economic activity in the country. The crisis has taken a toll on the economy and the already vulnerable population: inflation exceeded 20 per cent year-on-year in September, output is estimated to have contracted by an estimated 1.2 per cent in fiscal year 2019 (ending September 30), and the exchange rate depreciated by 25 per cent over the same period,” the IMF said in a statement.

President of the Republic of Haiti Jovenel Moise (File photo)

The statement followed the conclusion of the IMF’s 2019 Article IV Consultation with Haiti.

“As fiscal revenues have plummeted and the cost of energy subsidies increased, the fiscal deficit widened to 3.8 per cent of GDP in FY2019 and domestic arrears rose sharply. The public debt-to-GDP ratio jumped from 40 percent to 47 percent over the fiscal year,” the statement continued.

” The crisis has taken a toll on the economy and the already vulnerable population: inflation exceeded 20 per cent year-on-year in September, output is estimated to have contracted by an estimated 1.2 per cent in fiscal year 2019 (ending September 30), and the exchange rate depreciated by 25 per cent over the same period.”

— International Monetary Fund

IMF directors recognised — and admitted — that Haiti’s Ministry of Finance has implemented measures that will improve revenue collection and better control spending. The institution further pointed out that, in November, Haiti’s authorities signed a new agreement with the central bank to enhance fiscal discipline and limit monetary financing of the Government.

Policy reforms needed

In the meantime, the central bank has been adjusting interest rates to moderate inflation while supporting the private sector through the recession, the IMF said.

The organisation pointed out further that the Caribbean country’s economic outlook will continue to remain gloomy if authorities fail to consistently implement policies and comprehensive reforms. Political instability, the IMF board noted, will also continue to threaten Haiti’s outlook.

“A resolution of the current crisis, [the] appointment of a new Government committed and able to implement reforms, and return of support from the international community could lead to higher investment and potential growth,” the IMF directors outlined.

Among other concerns raised by the IMF’s board of directors were: the socio‑political crisis in Haiti, poverty and inequality, financial constraints, foreign exchange, and corruption.

A Haitian protester salutes during a violent demonstration again the Jovenel Moise-led Administration. (File photo)

In terms of Haiti’s outlook, the IMF predicted, “Under the baseline assumption of some political stabilisation in 2020 without major political or economic reforms, growth would improve but remain negative this year and below 1.5 per cent over the medium term. Inflation is expected to decline slightly before eventually falling to below 10 per cent by 2025.”