The International Monetary Fund says the political crisis is taking a heavy toll on the already poor and vulnerable population in Haiti. The report concludes: “It is important to note that a continuation of the current political crisis would have devastating consequences for the country over the longer-term owing to the likely losses of physical and human capital.”
The IMF consulting mission says: “Haiti has the potential for much stronger and more inclusive growth.” It advises that in the short term, the priority is to restore macroeconomic stability, mobilize fiscal revenues, take steps to tackle corruption, and start to build a better social safety net. The IMF also states that “combating corruption is another short-term priority.”
The remarks are in a statement published on 25 November 2019 following the completing of an IMF consultation mission in Haiti led by Nicole Laframboise.
The statement reads: “The political, economic, and social crisis confronting Haiti is without precedent. As a consequence of repeated lock-downs in the country in November 2018 and February, June, and September 2019, growth for the 2019 fiscal year is expected to be negative, at about -1.2%, while inflation rose to above 20% at end-September. This has worsened poverty and insecurity and deprived the government of the means to make productive investments and support activity.
“The staff outlook assumes a stabilization of the political situation but no fundamental political or economic reforms—which are unrealistic to assume at this juncture. Over the course of 2020, this would permit output to stabilize before a slight resumption of growth to around 0.9% in 2021. Under this scenario of low growth and external assistance, inflation is expected to remain close to 20% over the next two years. Likewise, potential growth is estimated at 1.5% per year over the longer term.
On the other hand, a rapid resolution to the crisis could lead to a strong rebound in activity. The appointment of a government committed to reforming the economy and the resumption of support from the international community would permit a loosening of budgetary constraints and an increase in public spending—investment in particular. This would reduce the need for financing from the central bank, thereby helping to lower inflation and boost growth in the short and medium-term.”
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IMF
26 November 2019