Haiti: Staff-Monitored Program-Press Release; and Staff Report

STAFF-MONITOREDPROGRAM—PRESS RELEASE;ANDSTAFF REPORT In the context of the First Review Under the Staff-Monitored Program (SMP), the followingdocuments have been released and areincluded in the package: •APress Release •TheStaff Reportprepared by a staff team of the IMF for the Executive Board’sinformation following discussions that endedonDecember 8,with the officials ofHaition economic developments and policiesunderpinning the First Review Under theStaff-MonitoredProgram.Based on information available at the time of thesediscussions, the staff report was completed onJune30, 2023. TheIMF’s transparency policyallows for the deletion of market-sensitive information andpremature disclosure of the authorities’ policy intentions in published staff reports andother documents. Copies of this report are available to the public from International Monetary Fund•Publication ServicesPO Box 92780•Washington, D.C. 20090Telephone: (202) 623-7430•Fax: (202) 623-7201E-mail:publications@imf.org Web:http://www.imf.orgPrice: $18.00per printed copy International Monetary FundWashington, D.C. IMF ManagementApproves a NewStaff Monitored-Programwith Haiti FOR IMMEDIATE RELEASE StaffMonitoredPrograms(SMPs)areinformalarrangementsbetweennationalauthoritiesandIMFstaff to monitor the authorities’ economicprogram. As such, they donot entail endorsement by the IMF Executive Board. SMP Staff reports are issued to theBoard for information. •Management of the International Monetary Fund (IMF) approved onJune29,2023,aStaff-MonitoredProgram(SMP)with Haiticovering the periodthroughMarch2024. •Building on progress achieved under the previous SMP,which was satisfactorily concludedin May 2023, thenew 9-monthSMPshouldcontribute tomacroeconomic stabilitybyhelpingHaitisustain recentpolicyreformsdesignedto enhance economic resilience andgovernance. •Fund management also welcomes the authorities’ requestfor an IMF Governance Diagnostic. Washington, DC–August30, 2023:Management of the International Monetary Fund (IMF)approved onJune29, 2023a Staff-MonitoredProgram(SMP) with Haiti which runs throughMarch31, 2024.Thenew 9-monthSMP was designed by IMF staff and the Haitianauthorities, keeping in mind Haiti’s fragility and capacity constraints while supporting theauthorities’ economic policy objectives.The SMP may be extended by three additional monthsat the request ofthe authorities through June 2024. SMPs are arrangements between country authorities and the IMF to monitor theimplementation of the authorities’ economic programandto establish a track record of policyimplementation. SMPsare not accompanied byIMFfinancial assistance. Haiti faces a challenging macroeconomic outlook amid a dire humanitarian crisis. The countryhas been hit hard by economic spillovers from Russia’s invasion of Ukraine,includingfoodprice inflationthat hastriggereda hunger crisis. This global shock has been compounded by ahighly volatile security situationin Haiti, which has heightened the economy’s fragility. Despite the very challenging environment, signs of resilience have emerged. Net internationalreserves have been rebuilt, although from a low base; custom duties helped boost fiscalrevenue by 50 percent in the first six months ofthe fiscal year of2023startingin October2022, monetary financing of the budget has declined; and the exchange rate has recentlystabilized.Efforts tofurther tostabilize the macroeconomic outlook should continueunder theSMP,as well as reforms aimed at reducing governance vulnerabilities. Building on the satisfactory outcome of thepreviousSMP,which concluded in May,the newSMPshould help strengthenHaiti’sdomestic revenues mobilization and raise taxes by supporting the implementation of the tax code. This should contribute tothecontinuedlowering the monetary financing of the budget.The fiscal measures shouldalso helpenhancetransparency andaccountability in the use of public spending,continue to enhance theAML/CFT framework,and build administrative and institutional capacityin Haiti. Sustaining progress on reforms to strengthen governance is paramountto ensureinclusivegrowth and build the trust of the private sector and of development partners. Recent progressin reducing governance vulnerabilitiesiswelcome and should continue to be effectivelyaddressed. Governance and anti-corruption measures were key components of reforms underthe 2022 SMP and will continue to be key in the new SMP. The authorities have acted tostrengthen accountability in the use of public resourcesand have boosted the transparency ofpublic procurement for emergency resources. The recent finalization of revisions to theCentral Bank and to the AML/CFT legal frameworks are also critical for improving governanceand transparency. Theauthoritieshavealso recently made a formal request for an IMFGovernance Diagnostic,which is a very welcome developmentand will help Haiti solidify the early improvementsachieved during therecentlyconcluded SMP.The diagnostics are designed toh