Wed | Sep 20, 2017

IMF reaches staff-level agreement with Haiti

Published:Saturday | June 17, 2017 | 6:32 PM

PORT AU PRINCE, Haiti (CMC):
The International Monetary Fund (IMF) says it has reached agreement with Haiti on a staff-monitored programme (SMP).

An IMF delegation, headed Chris Walker, its mission chief for the French-speaking Caribbean Community (CARICOM) country, said that following “productive discussions” the staff-level agreement was reached 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.

[International Monetary Fund] “The international community and key donors welcome the government’s determination to macroeconomic stability and reforms that will generate sustainable and inclusive growth,” he said.

Walker said that under the SMP, fiscal policy will focus on mobilising 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.”

He said the SMP also recognises 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.

Walker said that 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.”

Walker said that the IMF staff worked closely with the Haitian authorities to monitor progress in the implementation of their economic programme and in addition, the IMF will continue to provide technical assistance to support Haiti’s capacity-building efforts and its reform programme.

“The SMP is designed to build a track record and successful performance will catalyse donor flows and support a future request for an Extended Credit Facility (ECF) arrangement.,” he added.