IMF reaches agreement with Haiti on staff-monitored program
PORT-AU-PRINCE, Haiti — An International Monetary Fund (IMF) staff team led by Chris Walker, IMF mission chief for Haiti, visited Port-au-Prince from June 5-9, to carry out discussions with the Haitian authorities on a staff-monitored program (SMP).
Walker issued the following statement at the end of the visit:
“Following productive discussions, the IMF team reached a staff-level agreement with the authorities on an SMP covering the period of June-December, 2017. Haiti completed a successful cycle of elections in early 2017, with the installation of a new government and a new Parliament. The new government is committed to push ahead economic reforms and improve governance to promote economic growth and alleviate poverty in Haiti. The international community and key donors welcome the government’s determination to macroeconomic stability and reforms that will generate sustainable and inclusive growth.
“Under the SMP, fiscal policy will focus on mobilizing domestic budget revenue to make room for needed increases in public investment, notably with regard to reconstruction from the effects of Hurricane Matthew, and investments in health, education, and social services. This will be achieved in part through the elimination of excessive subsidies, including subsidies for retail fuel sales. Crucially, these actions will be accompanied by mitigating measures to protect the most vulnerable. The SMP also recognizes that to provide the resources for increasing public investment and raising economic growth over the medium term, it is vital to bring an end to the large losses arising from the operations of the public electricity utility EDH, which in recent years have been responsible for approximately half of the public sector deficit.
“The Central Bank of Haiti (BRH) will aim to protect international reserves and preserve exchange rate flexibility, while acting as necessary to contain disorderly market conditions. Under the SMP, the BRH will limit monetary financing of the government deficit, based on the SMP agreement, and will strive to achieve low inflation, while maintaining an adequate flow of credit to the private sector. Structural reforms under the SMP will focus on tax reform and on improving transparency of public accounts.
“IMF staff will work closely with the authorities to monitor progress in the implementation of their economic program. In addition, the IMF will continue to provide technical assistance to support Haiti’s capacity-building efforts and its reform program. The SMP is designed to build a track record and successful performance will catalyze donor flows and support a future request for an Extended Credit Facility (ECF) arrangement.”