IMF: Haiti economic activity “broadly satisfactory”

WASHINGTON, CMC – The International Monetary Fund (IMF) says that economic activity has recovered and programme implementation under the Extended Credit Facility (ECF) arrangement in Haiti has been “broadly satisfactory.”



After conducting discussions for the second and third reviews under the ECF, the Washington-based financial institution said on Thursday, that real Gross Domestic Product (GDP) in the earthquake-ravaged, French-speaking Caribbean country grew by 5 per cent in 2011.



The IMF said this is in spite of contraction in agricultural output owing to adverse harvest conditions.



It also said 12-month inflation reached 10.4 per cent in October, mainly as a result of higher food prices.



“The fiscal position has strengthened reflecting a strong performance in domestic revenue and lower than budgeted expenditure,” it said, adding that credit to the economy has picked up, and gross international reserves exceeded the equivalent of five months of imports at end-October.



Mission chief Boileau Loko said the Haitian government and the mission reached understandings in principle on a macroeconomic and structural reform program for Fiscal Year 2012, noting that the authorities’ programme aims at safeguarding macroeconomic stability, supporting the recovery, and further reducing poverty.



“The outlook for 2012 remains favorable, assuming that the new government accelerates reconstruction, and the security and political situations remain stable,” he said.



“A rebound in agriculture and buoyant activity in construction and manufacturing will contribute to boosting growth to around 7.8 per cent,” he added, stating that the fiscal policy aims at strengthening domestic revenue and containing current spending, “so as to create fiscal space for public investment and poverty-related spending.”



Loko said the appropriate macroeconomic policies are designed to help bring down inflation to single digits, adding that the external position “would remain strong.”



He said the structural reform agenda will focus on further raising domestic revenue, improving public financial management and economic governance, enhancing institutional capacities for better public investment management, strengthening market-based monetary operations and liquidity management, and reforming investment climate.



Loko said close coordination between the Government and the donor community will be “critical” for the success of the reform programme.



He said the IMF staff will recommend that management request the completion of the second and third reviews under the ECF to be taken up by the executive board in March 2012.