PORT-AU-PRINCE: The International Monetary Fund (IMF) is predicting economic growth of 3.5 per cent for Haiti during the fiscal year 2015, and announced that preliminary data for this year suggests that the nation’s economic activity has advanced at a pace of nearly four per cent.
The IMF said Gabriel Di Bella led a mission last month to Haiti to complete discussions for the eighth and final review under the 2010 Extended Credit Facility (ECF) arrangement.
The ECF replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries. Financing under the ECF currently carries a zero interest rate, with a grace period of 5.5 years, and a final maturity of 10 years. The Fund reviews the level of interest rates for all concessional facilities every two years.
The delegation held talks with government, trade union and private sector officials and according to statement issued afterwards, “preliminary data for fiscal year 2014, October 2013–September 2014, suggest that economic activity as measured by gross domestic product (GDP), advanced in line with projections, at a pace of about 3.5 to four per cent”.
It said that inflation remained low, at around five per cent and the fiscal deficit was lower than programmed but remained high, in part due to costly fuel subsidies. Monetary policy was adequately geared towards protecting reserves while ensuring a low and stable inflation.
“For fiscal year 2015, growth is expected to be in the three to 3.5 per cent range, while inflation will remain contained,” said Di Bella.
He said reductions in fuel subsidies implemented together with programs to protect the most vulnerable, and increased billing and collection in the electricity sector should enable the authorities to reduce the fiscal deficit towards sustainable levels.
“Although the recent decrease in international oil prices would reduce the oil bill, it also increases financing risks. The mission discussed deficit reduction measures to mitigate this downside risk,” said Di Bella.
The IMF official said that the completion of remaining program measures, including with respect to the operation of accounting centers, should permit the Executive Board to consider this final ECF review in mid-December. The authorities expressed their intention to request a successor IMF arrangement.
“As we move to a successful conclusion of the ECF program, the mission would like to commend the authorities for maintaining sound macroeconomic policies in the difficult years following the 2010 earthquake,” said Di Bella. “The hospitality and open discussions that prevailed throughout this period continued during this visit.”