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Haiti expected to grow at least 4% this year – IMF
Haiti is expected to record economic growth of 4 percent this year.
According to the International Monetary Fund (IMF), Haiti had in December last year, completed an arrangement under the Extended Credit Facility (ECF), which helped to support economic growth and maintain macroeconomic stability after the 2010 earthquake.
But it said a drought that affected agricultural output slowed gross domestic product (GDP) growth to 2.7 percent last year, from 4.2 percent, the previous year. The IMF said inflation remained in the mid-single digits.
“The overall fiscal deficit of the central government remained high, in part due to one-off investment related to the Sandy storm. International reserves remained appropriate at about five months of imports,” the IMF said, adding that the implementation of structural reforms to support growth underpins the medium-term outlook, which is nonetheless subject to downside risks.
“GDP growth in financial year 2015 is expected to be between two to three per cent, and to increase to three to four per cent in the medium-term. Inflation is projected to remain in the mid-single digits and gross international reserves to be equivalent to between four to five months of imports, thanks to a prudent policy mix”
But the IMF warned that risks are mainly associated with a rebound in international oil prices, a stop in external financing from Venezuela, and weather events.
The IMF commended the Michel Martelly administration for maintaining macroeconomic stability in the aftermath of the 2010 earthquake, noting positive growth, moderate inflation, adequate international reserves, and an improvement in Haiti’s debt assessment.
“Nevertheless, growth remains insufficient to reduce poverty significantly, and vulnerabilities remain against the backdrop of a challenging domestic and external environment,” the IMF said, adding that it agreed that the authorities’ new program appropriately focuses on entrenching macroeconomic stability, and ambitious structural reforms to enhance competitiveness, spur inclusive growth and strengthen policy buffers.
The IMF said that strong ownership and well-coordinated donor support will be important for the success of the program.
It also welcomed the approval of a revised 2015 budget consistent with reducing the deficit of the non-financial public sector to about 2.5 per cent of GDP over the medium term, in line with debt sustainability and program objectives.
