Financial Crime World

Haiti Makes Progress on Structural Reforms Despite Challenges

IMF Praises Haiti’s Progress on Implementing Structural Reforms

The International Monetary Fund (IMF) has commended Haiti for its progress in implementing structural reforms, despite multiple challenges. According to the IMF’s recent assessment, Haiti has achieved all structural benchmarks for the end-March 2023 period, albeit with some delays.

Key Areas of Progress

  • Fuel Price Increases: The authorities announced fuel price increases in September 2022 and implemented them in November 2022.
  • Governance and Public Financial Management: Transparency at the Economic and Social Assistance Fund (FAES) has been improved, and regular public procurement contracts have been published.
  • Tax Administration: A decree making Taxpayer Identification Numbers (TINs) compulsory for all finance departments was issued, and amendments to the central bank law were ratified by the Board of Directors in April 2023.
  • Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT): A new decree aligning with international standards has been drafted.
  • Tax Code: A new tax code has been adopted, simplifying the tax system and publishing all codes and tariffs related to customs.

Macroeconomic Outlook Remains Challenging

Despite these progress, Haiti’s macroeconomic outlook remains challenging. The IMF projects economic growth of 0.1 percent in FY2023, slightly lower than previously projected due to the security crisis. Inflation is expected to remain high, driven by food and energy prices.

  • Debt Path: The country’s debt path is a concern, with a high risk of debt distress.
  • Fiscal Discipline: The authorities have committed to implementing fiscal discipline and reducing monetary financing of the budget deficit.

Fiscal Policy Discussions

Haiti has made significant progress in revenue administration, with domestic revenue rising 48 percent in the first half of FY2023. Efforts have also been made to improve social spending, with total spending reaching 0.65 percent of GDP in the first semester of FY2023.

  • Social Welfare Fund (FSW): The authorities have committed to following proper procurement processes for resources related to FSW, and the IMF has provided a template to facilitate reporting on forthcoming spending under FSW.
  • Transparency and Accountability: Measures aim to enhance transparency and accountability in public spending.

Conclusion

Haiti’s progress on structural reforms is encouraging, but the country still faces significant challenges in terms of its macroeconomic outlook and debt sustainability. The authorities will need to continue implementing fiscal discipline and addressing these challenges to achieve sustainable economic growth.