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Mixed outlook as Haiti continues to grapple with economic challenges

The Bank of the Republic of Haiti (BRH) says the outlook for the local economy remains mixed and that the evolution of the economic situation for the next three months will be highly dependent on the socio-political climate.

View of a shanty town in Port-au-Prince, Haiti. (Photo: telegraph.co.uk)

“The negative shocks recorded in the country during the previous quarters still have an impact on the macroeconomic framework. Despite a relative recovery in activity towards the end of the first quarter, a wait-and-see attitude continues to prevail with regard to investment and production decisions; which affects the employment situation and the state’s ability to mobilise resources,” the BRH said in its first quarterly report for 2020.

The Central Bank said that the economy has been severely affected by the slowdown in activities during the months of October and November last year, adding “at the same time, for 65 per cent of the companies surveyed, this situation led to the layoff of 10 to 25 per cent of their workforce”.

People run during a protest to demand the resignation of Haitian President Jovenel Moise, in Port-au-Prince, Haiti September 30, 2019. (Photo: REUTERS/Andres Martinez Casares)

The BRH said that that 35 per cent of the companies questioned indicate that they suffered material damage during the unsettled political climate.

Opposition parties have been staging street demonstrations in support of their calls for President Jovenel Moise to step down amid allegations of corruption. But Moise, who came to office in 2017, has denied the allegations, and has been holding talks with some opposition parties in a bid to form a government of national unity.

Opposition parties have been staging street demonstrations in support of their calls for President Jovenel Moise to step down amid allegations of corruption.

In addition, Haitians have been hit by a shortage of food and petroleum-based energy products.

The BRH said that as of December 31, last year, the taxes and levies collected by the state increased by 4.5 per cent compared to the previous quarter, amounting to just over HTG19.6 billion (One Haitian Gourde =US$0.01 cents).

Bank of the Republic of Haiti (Photo: haitiliberte.com)

But it noted that at the same time, spending increased by 37.7 per cent compared to the previous quarter to reach a little over HTG 42.7 billion, which increase particularly reflects a seasonal effect linked to disbursements intended for end-of-year activities.

The BRH said that the slight quarterly increase in government revenues, however, could not compensate for the increase in government spending and consequently, a deterioration in the government’s overall net position vis-à-vis the BRH was recorded, materialised by a level of monetary financing of  HTG15.8 billion at December 31, 2019 compared to HTG 5.3 billion in the previous quarter.