--- Page 1 --- INTERNATIONAL MONETARY FUND IMF Country Report No. 25/19 HAITI STAFF-MONITORED PROGRAM- PRESS RELEASE AND January 2025 STAFF REPORT In the context of the Staff-Monitored Program, the following documents have been released and are included in the package: A Press Release The Staff Report prepared by a staff team of the IMF for the Executive Board's information following discussions that ended on December 16, 2024 with the officials of Haiti on economic developments and policies underpinning the Staff-Monitored Program. Based on information available at the time of these discussions, the staff report was completed on January 6, 2025. The IMF's transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities' policy intentions in published staff reports and other documents. Copies of this report are available to the public from International Monetary Fund o Publication Services PO Box 92780 o Washington, D.C. 20090 Telephone: (202) 623-7430 o Fax: (202) 623-7201 E-mail: publications@imf.org Web: http./Awww.imf.org Price: $18.00 per printed copy International Monetary Fund Washington, D.C. 0 2025 International Monetary Fund --- Page 2 --- PRESS RELEASE IMF PR24/498 Management Approves a New Staff with Monitored-Program Haiti FOR IMMEDIATE RELEASE Staff Monitored Programs (SMPs) are informal authorities and IMF staff to monitor the arrangements between national not entail endorsement by the IMF Executive authorities' economic program. As such, they do Board for information. Board. SMP Staff reports are issued to the Management of the International Staff-Monitored Program with Monetary Fund (IMF) approved on December (SMP) Haiti covering the period 20, 2024, a This new 12-month through December 2025. SMP is expected to contribute to support well-being of people and to enhance strengthen macroeconomic stability to anchor the government 'S macroeconomic economic resilience and governance. It will priorities for the year ahead. Fund management also welcomes the authorities' Governance Diagnostic Report. commitment to publish the forthcoming Washington, DC-December 21, 2024: (IMF) approved on December 20, 2024, Management of the International Monetary runs through December a Staff-Monitored Program Fund 19, 2025. The new (SMP) with Haiti which authorities and IMF staff, keeping in mind Haiti's 12-month SMP was designed by the Haitian supporting the authorities' economic fragility and capacity constraints while policy objectives. SMPs are arrangements between country implementation of the authorities' authorities and the IMF to monitor the implementation that could pave the economic program and to establish a track record Upper Credit Tranche way for financial assistance from the Fund of policy (UCT). under the Haiti faces a multidimensional country is beset by both crisis, a political transition, with a global and challenging outlook. The fragility. In addition to causing terrible country-specific human shocks, which have heightened its the flow of goods and services. These suffering, escalating gang violence has population suffering acute food events have further fueled inflation and left half blocked the will continue to suppress insecurity. The supply-side shock caused growth and feed inflation unless the by the security crisis security outlook improves. The top priority is to continue to restore stability and for security. This is a prerequisite for allowing growth to materialize. macroeconomic authorities are firmly committed to Despite domestic and global difficulties, the somewhat the impact of the various negotiating a new SMP and have managed to contain outcomes. Net international shocks, thereby averting even worse September 2024. Despite reserves were valued at nearly US$1billion at macroeconomic the of the political instability, Haiti's two end of Economy and Finance and the Central Bank of key economic institutions Haiti) have remained continuously (Ministry engaged 700 19th Street NW Washington, DC 20431 USA IMForg authorities are firmly committed to Despite domestic and global difficulties, the somewhat the impact of the various negotiating a new SMP and have managed to contain outcomes. Net international shocks, thereby averting even worse September 2024. Despite reserves were valued at nearly US$1billion at macroeconomic the of the political instability, Haiti's two end of Economy and Finance and the Central Bank of key economic institutions Haiti) have remained continuously (Ministry engaged 700 19th Street NW Washington, DC 20431 USA IMForg --- Page 3 --- attempted to adopt feasible measures to limit with the Fund. They have consistently level of economic activity in the country. imbalances and ensure a reasonable agreed benchmarks, macroeconomic data and information on previously They have also continued to provide even when the previous SMP had lapsed. authorities' commitment to continue making anchor for signaling the in The SMP is an important stabilization and strengthen governance, and locking progress toward macroeconomic recent years, despite the many headwinds. Despite macroeconomic gains accumulated over inclusive consultative process, the delicate context, and thanks to a highly for the SMP through the the political full ownership and support authorities have been able to demonstrate (Comite du Suvie). high-level Program Monitoring Committee window of opportunity to implement reforms that The authorities have a narrow but important restore its medium- and long-term potential. An Haiti build resilience and eventually to the country's can help the mobilization of revenue, support urgent government priority is re-starting spending. The measures under the new massive development needs and boost well-targeted SMP should help achieve these goals. essential to cushion the impact of the strengthening of the social safety net is commitments Continued and alleviate widespread poverty. The spending be audited shocks on the population using Food Shock Window resources should previously indicated by the authorities in line with SMP commitments. financing of the deficit authorities' commitment to keeping monetary BRH is urgent The fiscal and monetary continue. The FY2023 financial audit of the at zero is commendable and should 2025 would be important for demonstrating transparency. and its eventual publication by June has been appropriate and consistent with The authorities' careful pace of monetary tightening the goal of fighting inflation. to help Haiti exit from fragility, ensure inclusive Advancing governance reforms is paramount partners. In this vein, the and build trust with the private sector and development Report is commendable. It growth commitment to publish the Governance Diagnostic will require capacity authorities' road map for reforms to enhance governance and should provide a from the Fund but also from development partners. development support not only the economy's resilience to multiple strategy to continue to strengthen This assistance is A government-led the financial support of the international community. term. Without it, shocks requires spending, over the short, medium, and long take the form indispensable to allow quality External assistance should Haiti will continue to suffer large import compression. non-concessional loans, to ensure of grants. The authorities should avoid contracting Non-concessional loans would not only be against consistency with the SMP commitments. debt sustainability. SMP commitment. It would also undermine States, IMF staff will also In line with the Fund Strategy for Fragile and Conflict-Affected: partners, particularly on closely with Haiti's main development continue to coordinate governance and capacity development. the short, medium, and long take the form indispensable to allow quality External assistance should Haiti will continue to suffer large import compression. non-concessional loans, to ensure of grants. The authorities should avoid contracting Non-concessional loans would not only be against consistency with the SMP commitments. debt sustainability. SMP commitment. It would also undermine States, IMF staff will also In line with the Fund Strategy for Fragile and Conflict-Affected: partners, particularly on closely with Haiti's main development continue to coordinate governance and capacity development. --- Page 4 --- MONETARY FUND INTERNATIONAL HAITI STAFF-MONITORED PROGRAM January 6, 2025 EXECUTIVE SUMMARY challenging circumstances. The Recent developments. Haiti is facing exceptionally in the first few environment, which reached crisis proportions deteriorating security disrupting supply chains (particularly energy months of 2024, has continued to worsen, In November 2024, Haiti's and basic services) and feeding inflationary pressures. Minister Alix Didier Fils-Aimé to form transitional Presidential Council designated Prime next elections. The government with a time-bound mandate through could a new government of to implement reforms that has a narrow but important window opportunity medium term. help restore the country's potential over the achieved under the 2022 (SMP). Building on progress 2023 Staff Monitored-Program covering the period June 30, 2023, SMP, a new SMP was negotiated in June 2023, September 2024. Despite 2024, and extended by six months through through March 31, Central Bank during summer 2023 had meaningful initial progress, the IT incident at the the timeliness of monetary far-worse impact than originally foreseen in undermining With the a crisis in the spring of 2024 led to further slippages. data. The unfolding security 2024, the authorities and staff agreed to in place since mid-November with the new government than extend it further, and to start a new SMP let the 2023 SMP lapse, rather FY2025 budget, anchoring new quantitative targets. have requested a new 12-month SMP Request for a new SMP. The authorities 2025 (with two reviews and two test beginning in December 2024 through December SMP is expected to have the December 2024 and June 2025). This newly proposed dates: macroeconomic stability and enhancing governance, overarching goal of supporting Diagnostic Report. In doing SO, the including by publishing the forthcoming Governance the timeliness and efforts to continue improving SMP will support the government's Fund's capacity development, and to quality of data, with the ongoing support of the inclusive growth. Risks to the domestic revenue mobilization to boost help strengthen the security and political environment. implementation of the SMP rest on prevailing Policy Recommendations the monetary financing of the budget to Implement the budget for FY2025 and keep Should a supplementary budget consistent with the objective of price stability. of the SMP. zero, consistency with the objectives and targets be passed, it would require --- Page 5 --- HAITI Advance governance and anti-corruption reforms, including by publishing the governance diagnostic report and starting the implementation of the reforms. Adopt measures to strengthen revenue collection, expenditure management and controls and increase budget allocations for social spending and for protecting the most vulnerable-and assess their impact. Strengthen public finance reporting, transparency, and accountability in the use of public funds. Continue to limit foreign exchange interventions to smoothing excess volatility and wellsignaled foreign reserve build-up. Complete and publish the audit of the Central Bank for FY2023 by June 2025. Provide more timely data to the Fund and enhance data transparency through timely publication of core economic data. 2 INTERNATIONAL MONETARY FUND diagnostic report and starting the implementation of the reforms. Adopt measures to strengthen revenue collection, expenditure management and controls and increase budget allocations for social spending and for protecting the most vulnerable-and assess their impact. Strengthen public finance reporting, transparency, and accountability in the use of public funds. Continue to limit foreign exchange interventions to smoothing excess volatility and wellsignaled foreign reserve build-up. Complete and publish the audit of the Central Bank for FY2023 by June 2025. Provide more timely data to the Fund and enhance data transparency through timely publication of core economic data. 2 INTERNATIONAL MONETARY FUND --- Page 6 --- HAITI Approved By Policy discussions started in Rodrigo Valdés and Peter July 2-3, 2024, continued person in Washington DC during Dohlman 2024, with several remotely during July 24-August 5, September additional meetings throughout August and remotely, during October 21-26, 2024, in Washington DC and concluded remotely during December 16. The team comprised Ms. November 25Messrs. Huertas, Kaho, Passadore Tumbarello (Head), (SPR), Barseghyan (all WHD), Messrs. Chociay and Wata (STA), Sung, (FAD) and Messrs. Duvalsaint included (Port-au-Prince office). Former team members Messrs. Noah Ndela and Matz. Ms. excellent research assistance. Ms. Ojo provided related to mission Coquillat coordinated all work scheduling and document mission met with Minister of preparations. The Métellus, Central Bank Economy and Finance Alfred Fils Governor Ronald Gabriel, Planning and External Minister of Cooperation Ketleen senior government officials, members Florestal, other NGOS, and of the donor community, Buteau representatives of the private sector. Ms. Allien (OED advisor) Ludmilla technical discussions. participated to all policy and Mr. André Roncaglia Messrs. Bruno Saraiva and Felipe (Executive Director), Executive Directors) Antunes (both Alternate joined the policy meetings. CONTENTS CONTEXT AND RECENT DEVELOPMENTS OUTLOOK AND RISKS POLICY DISCUSSION ON A NEW SMP A. Fiscal Policy B. Social Assistance C. Enhancing Governance and Transparency D. Monetary and Exchange Rate Policy E. Financial Sector Resilience PROGRAM MONITORING STAFF APPRAISAL FIGURES 1. Monitoring Economic Activity Through Satellite 2. Revenue Performance, FY2019-24 Data 3. Real Sector Developments, 2017-24 INTERNATIONAL MONETARY FUND 3 --- Page 7 --- HAITI 4. Fiscal Sector Developments, 2016-24 5. Monetary and Financial Sectors Developments, 2017-24 6. External Sector Developments, 2017-24 TABLES 1. Food Shock Window: Spending Priorities Indicated by the Authorities 2. Selected Economic and Financial Indicators, 2021-29 3a. Non-Financial Public Sector Operations, 2021-29 (In millions of gourdes) 3b. Non-Financial Public Sector Operations, 2021-29 (In percent of GDP). 4a. Balance of Payments, 2021-29 (In millions of US$) 4b. Balance of Payments, 2021-29 (In percent of GDP) 5. Summary Accounts of the Banking System, 2021-29 6. External Financing Requirements and Sources, 2021-29 7. Financial Soundness Indicators, September 2021-June 2024 ANNEXES I Risk Assessment Matrix APPENDIX I Letter of Intent Attachment I. Memorandum of Economic and Financial Policies Attachment II. Technical Memorandum of Understanding 4 INTERNATIONAL MONETARY FUND a. Balance of Payments, 2021-29 (In millions of US$) 4b. Balance of Payments, 2021-29 (In percent of GDP) 5. Summary Accounts of the Banking System, 2021-29 6. External Financing Requirements and Sources, 2021-29 7. Financial Soundness Indicators, September 2021-June 2024 ANNEXES I Risk Assessment Matrix APPENDIX I Letter of Intent Attachment I. Memorandum of Economic and Financial Policies Attachment II. Technical Memorandum of Understanding 4 INTERNATIONAL MONETARY FUND --- Page 8 --- HAITI AND RECENT DEVELOPMENTS CONTEXT transition and multiple state facing a political 1. Haiti is a fragile and conflict-affected: of Total Number of People Displaced from Haiti challenges. The severe deterioration of security (Thousands annual data, end of each year) has magnified the impact of additional recent years of war in Ukraine, an 350 shocks (the pandemic, spillovers and and political instability). The political earthquake, deteriorated further in early 2024 and 200 security situation crisis again at the start of November 2024, reaching proportions. Gang violence has led to further 50 0 2022 2023 of people within and 2017 2018 2019 2020 2021 displacement of thousands drain. Gangs Source: United Nations High Commisioner and for other Refugees. people in outside the country and a worsening brain Note: Includes refugees, asylum-sekersa police need of intemationalprotection have attacked government buildings, installations, and such key infrastructure as airports, have been forced to close at Schools in certain neighborhoods of Port-au-Prince roads, and ports. cut off from critical supplies of food and healthcare, times and most residents of the capital are 2024, the UN extended the Kenya-led prompting thousands to leave in recent weeks. In September 2025. The MSS has struggled to Multinational Security Support Mission (MSS) through October force is still too small relative to the security as the authorities maintain that the Kenyan be a UN restore have thus requested the MSS to replaced by expected numbers. The authorities originally that would have increased funding and personnel. peacekeeping mission of in April 2024, with the support Presidential Council was established led Prime 2. A Transitional until February 2026. A government by CARICOM, serving as the country's presidency November 2024 was tasked with Conille in place between June 2024 and early elections by Minister Garry and paving the way for orderly general restoring security, relaunching the economy, the FY2025 budget on time in 2026 (the first since 2016). The government passed Presidential Council of February in early November by the Transitional September. Following the designation was formed, with the goal of Prime Minister, Alix Didier Fils-Aimé, a new government 2026. a new crisis, and still leading the country until February restoring security, tackling the humanitarian difficult. Haiti has experienced six consecutive years of 3. Economic conditions remain economic contraction, including growth of negative Inflation (Percent) 4 percent in FY2024, reflecting disruptions in Overall CPI( (year on year) exports, and flow of goods and services 50 food CPI (year on year) production, The supply-side shock caused by in local markets. inflation pressures 30 the security crisis has heightened and worsened the hunger crisis. Inflation accelerated in February 2024, and stood at 25.3 October 2024. Latest data suggest that 80 8 a 4 a N N 2 percent in months (with 8 a E E S 3 e 3 trade also decreased sharply in recent and Informatics (HSI, and Bank ofthel Republic of Haiti dropping at an annual rate of 20 percent Sources: Haitian Institute of Statisticsa exports 10 percent in FY2024). Remittances and imports INTERNATIONAL MONETARY FUND 5 Inflation accelerated in February 2024, and stood at 25.3 October 2024. Latest data suggest that 80 8 a 4 a N N 2 percent in months (with 8 a E E S 3 e 3 trade also decreased sharply in recent and Informatics (HSI, and Bank ofthel Republic of Haiti dropping at an annual rate of 20 percent Sources: Haitian Institute of Statisticsa exports 10 percent in FY2024). Remittances and imports INTERNATIONAL MONETARY FUND 5 --- Page 9 --- HAITI held relative to recent historical averages but remained flat in October, relative to a high base. up After the current account deficit widened in FY2023 to 312 percent of GDP- -owing mainly to a collapse in exports, especially textiles preliminary BOP data point to a narrowing deficit in FY2024, mainly the result of import compression and higher remittances. Haiti: Trade and Remittances Data Amount (in millions of US dollars) Percentage change FY19-23 FY23 FY24 FY24 Vs average FY24 VS FY23 Period (average) FY19-23 Fiscal year to date October September 1,085 N -29 N -20 Exports October 4,358 4,715 4,248 V -3 w -10 Imports September Net Remittances October- September 2,894 3,030 3,353 U 16 Latest available month V -29 N -14 Exports September September w -19 Imports Net Remittances September Sources: BRH and Fund staff estimates. Monetary Financing of the Budget 4. Reserves buffers have been rebuilt to a (In percent of GDP) comfortable level. Gross international reserves rose to US$2.5 billion (5.7 months of imports) in September 2024, owing mainly to strong remittances, compared with US$2.3 billion at endSeptember 2023. Net international reserves (NIR) reached almost US$1 billion in September 2024 or US$920 million after deducting the Food Shock 2019 2020 2021 2022 2023 2024 Window (FSW). The nominal exchange rate vis-à-vis Sources: Ministry of Finance (Tableau des Operations Financières de l'Etat-TOFE) and IMF staff estimates. the US dollar stabilized during January-November 2024. Monetary financing of the fiscal deficit was reduced to zero in FY2024. 5. Public debt is low, but debt risks are high given Haiti's vast development needs and and base Article IV 20). The DSA still assesses Haiti's risk narrow revenue export (DSA, paragraph of debt distress as high given its large exposure to natural disasters, its large development and Reserves Accumulation and Bilateral Exchange Rate Bilateral Exchange Rate 160 NIR (millions of US dollar, right scale) 1,080 (Gourde per US dollar) --Gourde per US dollar g140 & 8 145 2 120 E 140 of o 135 - 100 130 BRHI referer exchan nge rate Estir ated wo band I 3 125 a a 8 8 N N 8 a 8 8 4 a a 3 & $ S 3 & a S 3 3 a S $ Sources: Bank of the Republic of Haiti and IMF staff estimates Sources: Bank oft the Repu 6 INTERNATIONAL MONETARY FUND --- Page 10 --- HAITI Haiti: Net International Reserves- 2024 SMP Definition and its still-low (In millions of US dollars, unless otherwise noted) 2024 Sep 2024 infrastructure needs, Sep 2023 Dec2023 Mar 2024 Jun potential growth. 8 8 N N 8 a 8 8 4 a a 3 & $ S 3 & a S 3 3 a S $ Sources: Bank of the Republic of Haiti and IMF staff estimates Sources: Bank oft the Repu 6 INTERNATIONAL MONETARY FUND --- Page 10 --- HAITI Haiti: Net International Reserves- 2024 SMP Definition and its still-low (In millions of US dollars, unless otherwise noted) 2024 Sep 2024 infrastructure needs, Sep 2023 Dec2023 Mar 2024 Jun potential growth. Despite these 2,353.0 2,586.7 2,427.9 128.9 2,449.8 135.7 2,525.2 153.1 debt is assessed as A. Monetary Gross International gold Reserves 108.9 23.8 121.0 42.2 27.4 470.9 44.5 444.2 37.5 headwinds, assumes Holdings off foreign abroad currency 1,705.6 377.7 542.4 749.6 1,668.7 475.2 1,679.3 1,769.3 sustainable, but this assessment Investments Demand deposits abroad 109.9 103.9 100.4 924 27.0 93.2 27.9 of considerable SDRI holdings1 1/ 27.0 27.6 27.2 the continued inflow Reserve Position in the Fund 1/ 251.1 249.7 488.1 453.1 306.6 The trajectory and drivers of B. Reserve Related Liabilities 248.4 248.0 244.7 237.7 213.4 245.1 60.2 grants. debt are unchanged Shortt Liabilities term to loans the IMF from 1/2/ private non-residents 0.0 2.3 0.0 17 242.9 0.5 2.0 1.3 external and overall Liabilities tolFIs 0.3 0.3 0.3 0.3 0.3 relative to the 2024 Article IV Certified checksi inFX 1,814.2 1,744.1 1,296.6 1,327.0 1,263.4 1,231.0 External debt is estimated C. FX Denominatedl Liabilities in to the Residents centralt bank 1,266.0 1,1960 1.2637 0.0 1,294.5 0.0 0.0 consultation. Financial Government sector FX deposit FX deposits in transitory. account (Venezuela debt) 515.2 32.9 5152 32.9 32.9 32.4 32.4 to have dropped sharply from 12.9 Swaps with financial linstitutions 17.8 18.1 35.2 of GDP in FY2023 to 1.5 percent D. Other FX Liabilities 33.7 15.0 33.4 15.0 15.0 15.0 3.0 15.0 20.2 percent debt relief. Off- -balance sheet FX liabiliti ties 17.5 18.3 0.1 2.7 0.1 0.1 0.1 in FY2024, due to Venezuela Project accounts accounts 1.2 Special 254.1 559.5 625.4 651.6 919.9 E.Netl Inter rational Reserves, 2024 SMP definition (A- B-C-D) JOUTLOOK AND RISKS Sources: BRH, IFS, and IMF staff calculations. December 2024 and September 2025, thea amounts SDR willb be Based onlt IMF data. For the purposes the exchanger oft the2 rate 2024SMP, as of September between 30, 2024 (1 USS-0.737261 SDR). (Food converted to US. dollars using Haiti labilities tot the IMF are considered. including) January 2023 Rapid Credit Facility The macroeconomic outlook 2/1 For Window). program purposes, disbursed all ata outstanding agovernment account in the BRH, for an amount ofS SDR 81.9 million. 2024 and September 2025, thea amounts SDR willb be Based onlt IMF data. For the purposes the exchanger oft the2 rate 2024SMP, as of September between 30, 2024 (1 USS-0.737261 SDR). (Food converted to US. dollars using Haiti labilities tot the IMF are considered. including) January 2023 Rapid Credit Facility The macroeconomic outlook 2/1 For Window). program purposes, disbursed all ata outstanding agovernment account in the BRH, for an amount ofS SDR 81.9 million. 6. Shock for Haiti remains clouded, with risks 0.5 percent in FY2025 (relative to 1 Growth is expected to reach only tilted to the downside. partly reflected in the weaker-than-antopated in the recent 2024 Article IV consultation), of data on economic percent indicator less frequent (whose monthly frequency are a leading violence in the revenues caused by escalating gang partly due to disruption in economic production which led to the closure of the activity) 2024) of the current fiscal year (October-December satellite data first quarter with reduced trade flows, confirmed by international airport. This, together is estimated at 172 percent if capital recovery. Medium-term growth (Figure 1), signals a far more moderate turmoil could lead to continued improves, but further social and political is the security situation of the non-financial public sector (NFPS) activity. The fiscal deficit disruption of economic political instability, sustained gang-related at about zero. Risks include intensified food crisis. Externally, Haiti is projected further of cholera, and a worsening economic disruption, a spread and renewed surges in global volatile remittance flows, reduced external financing, of the vulnerable to substantial monetary financing If these risks were to materialize, term, there is food and energy prices. macroeconomic stability. Over the medium budget could resume, further undermining related to the expiration of slowdown in remittances related to the uncertainty future status of a risk of potential well as the uncertainty related to the Protected Status by the US as from 2026 onwards, due to Temporary Debt is projected to increase gradually HOPE/HELP trade preferences. investment and social programs. funding to finance the government's limited sources of domestic the main driver of external debt dynamics, largely current account deficit remains as well as The non-interest increased imports of foodstuffs fueled by the deficit in goods and services, reflecting drive. to the expiration of slowdown in remittances related to the uncertainty future status of a risk of potential well as the uncertainty related to the Protected Status by the US as from 2026 onwards, due to Temporary Debt is projected to increase gradually HOPE/HELP trade preferences. investment and social programs. funding to finance the government's limited sources of domestic the main driver of external debt dynamics, largely current account deficit remains as well as The non-interest increased imports of foodstuffs fueled by the deficit in goods and services, reflecting drive. Total public debt path is projected intermediate goods as part of the investment capital and accumulation of foreign debt. to be driven mainly by the window of has a short but meaningful these challenges, the government over the 7. Despite could help restore the country's potential opportunity to sustain reforms that situation would greatly improve the term. Normalization of the security medium and long INTERNATIONAL MONETARY FUND 7 --- Page 11 --- HAITI medium-term outlook. Official transfers could rise if countries in the region support the Kenya-led MSS with additional financing and if Haiti receives additional international support for reconstruction. If these were combined with the implementation of a strong anti-corruption strategy, it could bring back the FDI and talent that have left the country. Figure 1. Haiti: Monitoring Economic Activity Through Satellite Data Since the pandemic and with the intensification of criminal activity, trade flows have been disrupted, with import and volumes, and the number of cargo and tanker ships on a clear downward trend. export Average Daily Ship Arrivals 2.0 1.0 Daily Import and Export Volumes 1.8 0.9 1.2 1.6 -Cargo ships 0.8 Import volume 1.4 Tanker ships (right scale) 0.7 Export volume (right scale) 1.0 1.2 0.6 0.8 1.0 0.5 0.6 0.8 0.4 0.3 0.4 0.6 0.2 0.4 0.2 0.0 Satellite data suggest that trade activity began to slow in December 2023 and fell dramatically beginning in March 2024, inferred by the collapse in the number of oil tankers and cargo ships... as à of I 2 11 Dec 25 Dec 8Jan 22. Jan 5Feb 19 Feb Mar 181 Mar 1Apr 15Apr 29Apr 13May 271 May and it has not normalized yet. o of de N Jun 10 Jun 24 Jul8 Jul22 Aug Aug 19 Sep: Sep 16 Sep: 30 Oct 14 Oct28 Nov 11 Nov 25 0 Number of Cargo Ships Number of Tanker Ships 7- day Moving Average Prior Year: 7- day Moving Average Sources: IMF Portwatch (daily data), IMF Swift Monitor, and FlightsRadar24. Left upper chart: the blue line is the arrivals at frequency of cargo ships, quarterly averaged. The red line is the arrivals at daily frequency of tanker ships, quarterly daily Right upper chart: daily import volumes quarterly averaged and daily exports volumes quarterly averaged. averaged. 8 INTERNATIONAL MONETARY FUND Sep 16 Sep: 30 Oct 14 Oct28 Nov 11 Nov 25 0 Number of Cargo Ships Number of Tanker Ships 7- day Moving Average Prior Year: 7- day Moving Average Sources: IMF Portwatch (daily data), IMF Swift Monitor, and FlightsRadar24. Left upper chart: the blue line is the arrivals at frequency of cargo ships, quarterly averaged. The red line is the arrivals at daily frequency of tanker ships, quarterly daily Right upper chart: daily import volumes quarterly averaged and daily exports volumes quarterly averaged. averaged. 8 INTERNATIONAL MONETARY FUND --- Page 12 --- HAITI DISCUSSION ON A NEW SMP POLICY under the 2022 SMP, the 2023 SMP was negotiated in 8. Building on progress achieved the timely approval of the budget, the June 2023. Despite meaningful initial progress, including and provision and timely financial intelligence unit (FIU) law, improved of amendments to the occurred on other fronts. As a result dissemination of finance ministry data, program slippages data suffered and prevented the 2023, the timeliness of monetary the IT incident in mid-summer 2023. The worsened insecurity led to further slippages, conclusion of the First Review in December some structural benchmarks and in in tax collection and delays in achieving to the including a collapse in compiling statistics attributable providing data. The latter reflected reduced capacity 2024, the authorities and staff in place since mid-November lockdowns. With the new government it further, and to start a new SMP. to let the 2023 SMP lapse, rather than extend agreed SMP-with a 12-month this new proposed is 9. Given the new political leadership, to anchor its reform agenda. This agenda duration-offers the government: an opportunity the transparency and accountability of growth and reducing poverty, enhancing and timely aimed at promoting including through fighting corruption public spending, and improving governance, capacity development assistance will provision and publication of economic data. Continued mobilization with the goal of boosting domestic revenue support these efforts and help strengthen coincided with the Article IV consultation, staff As discussions of this new SMP in the inclusive growth. has been guided by the still-relevant assessments advice on the program's policy content record of policy implementation that paves the Article IV report. The SMP seeks to establish a track Credit Tranche (UCT). assistance from the Fund under the Upper way for financial the trust corruption are paramount for rebuilding governance and reducing assistance (ODA) 10. Improving given the low official development IMF of investors and development partners, The authorities should publish the direct investment (FDI) flows of recent years. The action plan and foreign an action plan of prioritized reforms. governance diagnostic report, which specifies partners. On monetary data, recent dialogue with development could also guide the government's should be implemented swiftly to enhance on the reserve template be finalized no IMF recommendations central bank for FY2023 (ending September) should transparency. The audit of the and accountability arrangements in reserves later than June 30, 2025. Strengthening the governance of central bank operations. This newly would also be key to enhance the transparency together with the forthcoming management development partner support proposed SMP is expected to catalyze with the government of Haiti by the Assessment (RCIA) prepared in partnership Nations. Rapid Crisis Impact Bank, the European Union, and the United World Bank, the InterAmerican Development A. Fiscal Policy mobilization to support large development needs priority is to re-start revenue recent months, tax An urgent government Although social spending has picked up in and increase well-targeted spending. of public spending and enhancing the is struggling to recover. Increasing the transparency revenue INTERNATIONAL MONETARY FUND 9 proposed SMP is expected to catalyze with the government of Haiti by the Assessment (RCIA) prepared in partnership Nations. Rapid Crisis Impact Bank, the European Union, and the United World Bank, the InterAmerican Development A. Fiscal Policy mobilization to support large development needs priority is to re-start revenue recent months, tax An urgent government Although social spending has picked up in and increase well-targeted spending. of public spending and enhancing the is struggling to recover. Increasing the transparency revenue INTERNATIONAL MONETARY FUND 9 --- Page 13 --- HAITI between tax and custom administration offices (DGI and AGD) is critical for technical cooperation strengthening revenue mobilization. Haiti: Latest Fiscal Developments Jan Feb March April May June July Aug Sept Oct Inpercent FY2023 In millions In percent FY2024 In millions (percentage change, year-on-year) ofGDP of.aourdes ofGDP of aourdes. 0.8 -14.0 -72.8 3.9 -24.7 -6.9 14.0 -1.9 12.6 -6.5 6.2 172,346 4.8 167,118 Revenue -4.6 -17.5 -75.9 0.9 22.7 -2.5 21.1 1.0 12.1 -2.1 4.0 111,881 3.1 106,579 Domestict taxes 11.9 -6.1 -67.4 7.5 -29.1 14.2 4 -3.9 -13.0 15.1 2.1 60,103 1.7 60,246 Customs duties 19.7 3.3 52.4 20.7 18.6 -5.2 6.1 14.0 -7.9 13.8 5.1 141,847 4.1 140,724 Expenditure 18.1 -2.5 -31.7 16.1 18.0 -16.0 8.0 -18.9 6.8 13.8 4.7 130,274 3.8 132,799 Current expenditure 222.6 -23.0 -97.3 509.2 -86.6 670.6 -63.3 330.5 50.2 0.0 0.6 16,782 0.2 7,925 Capitale lexpenditure Memorandum items 36.6 43.7 35.3 35.3 37.7 38.0 30.8 Share of custom duties as apercent off total revenues 32.9 33.9 34.4 Share of current expenditure asa apercent oftotale expenditure 97.8 97.0 98.2 95.3 99.9 87.2 99.1 929 86.0 100.0 Sources: Ministry of Economy and Finance (MEF) and Fund staff estimates. in March 2024, 11. Revenue. Fiscal revenues collapsed by 73 percent year-on-year (y/y) the economic paralysis caused by the security crisis; they have yet to recover. As of reflecting October, revenues were still 6.5 percent below their 2023 level (y/y), although changes (especially base in 2023 (Figure 2). These difficulties were further customs) reflect an exceptionally high compounded by a strike at the tax collection authority (DGI) during September-November, for medical benefits and salaries and for a change in the management motivated by requests higher of DGI, owing to corruption concerns. Figure 2. Haiti: Revenue Performance, FY2019-24 Total Tax Revenue Total Domestic Internal Taxes to recover. As of reflecting October, revenues were still 6.5 percent below their 2023 level (y/y), although changes (especially base in 2023 (Figure 2). These difficulties were further customs) reflect an exceptionally high compounded by a strike at the tax collection authority (DGI) during September-November, for medical benefits and salaries and for a change in the management motivated by requests higher of DGI, owing to corruption concerns. Figure 2. Haiti: Revenue Performance, FY2019-24 Total Tax Revenue Total Domestic Internal Taxes e a 2 9 C a M Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Customs Duties Total Tax Revenue (Annual percentage change) 145 A 157 FY2023 FY2024 70 39 - -5 A -30 7 -2 13 -55 73 -25 -80 Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Sources: Ministry of Finance (Tableau des opérations financières de Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep l'Etat) and IMF staff calculations. and Finance and IMF staff calculations. As for the top charts and lower left Sources: Ministry of Economy chart: cumulative values, September 2019= 100, nominal GDP discounted. 10 INTERNATIONAL MONETARY FUND 4 70 39 - -5 A -30 7 -2 13 -55 73 -25 -80 Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Sources: Ministry of Finance (Tableau des opérations financières de Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep l'Etat) and IMF staff calculations. and Finance and IMF staff calculations. As for the top charts and lower left Sources: Ministry of Economy chart: cumulative values, September 2019= 100, nominal GDP discounted. 10 INTERNATIONAL MONETARY FUND --- Page 14 --- HAITI of GDP, thanks to a large drop in fuel In FY2023, spending fell by 1.9 percent nominal wages and 12. Spending. contained (relative to inflation), with subsidies. 1 Other current expenditures were and services by 20 percent- and declining at an annual rate of 17 percent and goods salaries rising violence also hampered the authorities' of GDP. Lockdowns triggered by gang 13.8 as a percent rebounded sharply in October, rising by spending ability in FY2024. But public spending decline. The recovery reflected an active year-on-year, after several months of steady Social spending was percent under the revised FY2024 and FY2025 budgets. as a execution of expenditures below the previous year (1V2 percent in FY2022) equivalent to 1.3 percent of GDP in FY2023, Until July 2024, spending security situation's impact on implementation. result of the deteriorating previous FSW spending had been limited (about on food security related to the government's Criminal activity, lockdowns, and the billion gourdes, 20 percent of total FSW disbursements). from targeting spending at the more ongoing political transition kept the previous government owing to gang activity and vulnerable (e.g., children unable to attend schools regularly that the authorities spent an additional displacements). Latest data provided in December indicates billion authorized to spent (as reported in FY2024 (Table 1 below) relative to 9.1 with the FSW 6.4 billion gourdes Audits of the spending associated in the 2024 Article IV staff report, Table 1 page 20). benchmarks 4 and 5 in Attachment 1, Table 2) will constitute two structural benchmarks (structural in the newly proposed SMP. Haiti: Execution of Social Spending Oct. 2024 FY2024 Oct. 2023 In millions FY2023 In millions In percent In millions In percent In percent In millions In percent of GDP of gourdes of GDP of gourdes of GDP of gourdes of GDP of gourdes 0.00 0.00 Ministry 0.07 2,031 0.05 1,882 1,599 0.08 3,378 Agriculture 25,151 0.74 25,779 0.05 Education 0.90 7,217 0.01 0.02 Health 0.26 7,327 0.21 0.00 0.00 0.12 3,301 0.06 1,937 2,238 0.10 4,468 MAST 37,810 1.06 36,815 0.06 Total 1.35 and Finance (MEF) and Fund staff estimates. Sources: Ministry of Economy is balanced, aligned with staff of the FY2025 budget. The FY2025 budget at zero while 13. Implementation SMP's goal of maintaining monetary financing projections. It is consistent with the vulnerable households. The relatively faster effectively executing social spending for the country's fiscal deficit for FY2025 may be larger in October suggests that the overall increases increase in expenditure grants need to be offset by limiting Shortfalls in revenue or external project vulnerable. than expected. while preserving social spending on the most in current and capital spending in FY2025, arrears to finance shortfalls and to avoid The authorities agreed to avoid accumulating domestic budget required due to financing of fiscal deficits. Should a supplementary resuming monetary due to the authorities' decision in September 2022 to 1 The reduction in fuel subsidies for FY2023 is mainly diesel by 90 percent, and kerosene by 89 percent), even increase fuel prices (gasoline by 128 percent, diesel by 7 percent, and kerosene by 8 significantly moderately reduced prices (gasoline by percent, though, in July 2023, they international prices. percent) to reflect declining INTERNATIONAL MONETARY FUND 11 budget required due to financing of fiscal deficits. Should a supplementary resuming monetary due to the authorities' decision in September 2022 to 1 The reduction in fuel subsidies for FY2023 is mainly diesel by 90 percent, and kerosene by 89 percent), even increase fuel prices (gasoline by 128 percent, diesel by 7 percent, and kerosene by 8 significantly moderately reduced prices (gasoline by percent, though, in July 2023, they international prices. percent) to reflect declining INTERNATIONAL MONETARY FUND 11 --- Page 15 --- HAITI evolving circumstances, it would need to be discussed with IMF staff to ensure close alignment with the SMP. Table 1. Haiti: Food Shock Window. Spending Priorities Indicated by the Authorities (In millions of gourdes) Institution Purpose Measure Original Spent allocation 1/ FY2023 FY2024 Reactivation of community restaurants 2,000 Food security and mobile canteens Distribution of food to Fonds d'Assistance vulnerable households 1,134 Economique et Social (paniers de solidarité) (FAES) Cash transfer to vulnerable households 2,500 Cash distribution to vulnerable population Cash to workers in subcontracting industries 1,500 1,113 Ministry of National Cash transfer to vulnerable Education and Vocational households to encourage school Support to parents 7,500 4,864 Training attendance Ministry of Trade and Grants/subsidies to public Industry transportation drivers Fuel cards for drivers 1,600 Ministry of Women's Affairs and Women's Feeding Women in Detention Rights Total 15,600 3,089 6,438 Source: Ministry of Economy and Finance. 1/A Allocated under the FY23 budget 14. Policy priorities to enhance revenues. The authorities should sustain their efforts to mobilize domestic revenue (structural benchmarks 7 and 8 in Attachment 1, Table 2). In particular, they should: Establish an administrative and technical cooperation protocol between the Directorate of General Taxes (DGI) and General Administration of Customs (AGD); and Launch and implement the digitalization of tax declarations and payments through all commercial banks for the large taxpayers registered at the DGI. 12 INTERNATIONAL MONETARY FUND 6,438 Source: Ministry of Economy and Finance. 1/A Allocated under the FY23 budget 14. Policy priorities to enhance revenues. The authorities should sustain their efforts to mobilize domestic revenue (structural benchmarks 7 and 8 in Attachment 1, Table 2). In particular, they should: Establish an administrative and technical cooperation protocol between the Directorate of General Taxes (DGI) and General Administration of Customs (AGD); and Launch and implement the digitalization of tax declarations and payments through all commercial banks for the large taxpayers registered at the DGI. 12 INTERNATIONAL MONETARY FUND --- Page 16 --- HAITI SMP and are benchmarks under the newly proposed 15. All of these are structural broaden the tax base and enhance the important for raising tax revenue as they will urged the authorities to continue through digitalization. Staff strongly transparency of collection avoid resuming monetary financing of the budget. domestic revenue mobilization to reduced spending, strengthening been lower than expected, this has reflected While such financing has lately full execution. But such expenditure levels are neither which owes to the security threats preventing and widespread poverty. As security given the economy's fragility sustainable nor preferable mobilization will be essential to finance large stabilizes and spending capacity rises, higher revenue reforms to enhance digitalization, Staff underscored the importance of sustaining investment needs. collection and use of public funds. and accountability in tax revenue transparency, reforms needed for Haiti to exit The SMP will help the authorities adopt the spending are 16. development challenges, investment opportunities fragility. With the country facing huge the quality of public spending (in health and considerable. Tapping them will require improving and investing in human capital. in resilient infrastructure (physical and digital), conditional cash education), investing through targeted social spending, Unequal access to education could be addressed allowances (including to reduce the girls' access to education, and child transfers that encourage spending, Haiti needs to adopt investment dropout rate of girls). To improve the quality of public the Fund's technical assistance Public value for the money in line with be practices that maximize This requires that projects Management Assessment (PIMA) 2022 recommendations. projects be Investment and that completion of ongoing evaluated before being included in the budget medium-term fiscal framework (preparation of It would also require strengthening the before prioritized. determination of fiscal space for new initiatives progressively), baseline projections, and the priority projects and their involving line ministries in identifying a budget before progressively budget framework. Developing multiyear implementation timeframe to aim for a multiyear demands arising from large framework should also help, politically sequence high spending the financial controller's prerogatives development needs. In addition, it would require reinstating entails a budgetary control investment spending. This adopting about a priori control of public manual, as well as improving treasury cash guide and a renovated expenditure execution with the help of technical assistance. management, B. Social Assistance have advanced and should continue. On Efforts to social safety nets 17. strengthen to mitigate the impact of fuel price adjustments September 9, 2023, the government- in seeking fuel cards to low-income workers in subsidies-began distributing long-awaited and better target to individuals who own a registered public sector. Fuel cards are provided To date, the transportation for either passenger or goods transport. transport vehicle, which must be designated nationwide. However, insecurity has hindered approximately 3,800 fuel cards have been distributed the registration of interact with drivers and to collect data, limiting the authorities' ability to by cash transfers (checks) to the most additional transport vehicles. These were accompanied which the World Bank and WFP have helped vulnerable as identified in the SIMAST database, maintain and expand. INTERNATIONAL MONETARY FUND 13 individuals who own a registered public sector. Fuel cards are provided To date, the transportation for either passenger or goods transport. transport vehicle, which must be designated nationwide. However, insecurity has hindered approximately 3,800 fuel cards have been distributed the registration of interact with drivers and to collect data, limiting the authorities' ability to by cash transfers (checks) to the most additional transport vehicles. These were accompanied which the World Bank and WFP have helped vulnerable as identified in the SIMAST database, maintain and expand. INTERNATIONAL MONETARY FUND 13 --- Page 17 --- HAITI essential for ensuring medium-term fiscal Progress in reducing fuel subsidies has been have also allowed (and will 18. Haiti's limited fiscal space, reducing these subsidies sustainability. Given funds to more urgent priorities, such as social continue to do so) the authorities to reallocate populations. Given the political and social assistance programs that target the most vulnerable approach, both in terms of the the authorities have employed a cautious home-grown They have reviewed the implications, of the reform, guided by sound policy principles. in modalities and timing amendment of the 1995 Law, to allow changes mechanism, as part of a draft with a smoothing retail price-setting rates to be partly passed on to consumers, international fuel prices and exchange and exchange rate volatility between consumers mechanism that would distribute international price of retail prices. The authorities are and the budge and that would cap the monthly variation This would protect the budget from a reform of this mechanism in due course. and encourage the considering volatility, improve public finance management, substantial international price will generate subsidies in some periods of fuel products. The smoothing than without efficient consumption in others (when oil prices drop) but smaller the (when oil prices rise) and savings communication policy to facilitate the importance of an effective smoothing. Staff emphasized authorities' reform priorities should be the implementation of the reforms. Among the sector and strengthened framework for the petroleum-products establishment of a regulatory smoothing mechanism would reduce the institutions. Introducing a simple mechanism caps related regulatory And since the proposed pricing volatility of fuel net retail prices and revenues. ad hoc and sudden discretionary price price changes, the population will be spared monthly could enhance social stability. adjustments-which Fuel Prices and Net Revenues 8,000 Contribution of Energy Subsidies to the Fiscal Balance (Percent of GDP) 4,000 mFiscal balance subsidies excludinge energy subsidies mEnergy Fiscal Global balance oilprices, US dollar per gailon right scal 2,000 N I -100 - -2,000 - 25 4,000 Net fuel reve ue fuel taxes min nus fuel gourdes) -500 -6,000 -Price differential- cost price ninus regulat ourde per gallon) (right 700 -8,000 18 Sep-1 scale) 18 May- 19 Jan 20 Sep- 20 May-21 Jan 22 Sep- 22 May-23 Jan 24 Sep- 24 2016 2017 2018 2019 2020 2021 2022 2023 2024 Source: MEF and IMF staff estimates. Sources: World Economic Outlook (WEO) andl IMF staff estimates. Governance and Transparency C. Enhancing for helping Haiti to end its fragility. The 19. Advance governance reforms are paramount and strengthen governance as a authorities reiterated their commitment to fight corruption diagnostic assessment is of their action plan. Once the Fund-supported governance (an endcenterpiece the report should be published promptly finalized (with the authorities' comments), continued commitment will be critical to structural benchmark). Similarly, the authorities' Diagnostic February identified in the Governance implementation of priority recommendations for ensuring recommendations focus on the establishing accountability Report. The recommended priority and related money-laundering offences, the most serious organized crime, corruption, vulnerabilities in the core state functions. The governance, and reducing corruption strengthening 14 INTERNATIONAL MONETARY FUND of their action plan. Once the Fund-supported governance (an endcenterpiece the report should be published promptly finalized (with the authorities' comments), continued commitment will be critical to structural benchmark). Similarly, the authorities' Diagnostic February identified in the Governance implementation of priority recommendations for ensuring recommendations focus on the establishing accountability Report. The recommended priority and related money-laundering offences, the most serious organized crime, corruption, vulnerabilities in the core state functions. The governance, and reducing corruption strengthening 14 INTERNATIONAL MONETARY FUND --- Page 18 --- HAITI recommendations proposed in the Governance implementation of the focused number of priority The implementation of a road map for reforms to enhance governance. Diagnostic should provide the Fund but also from development partners. Improving the plan will require CD not only from and development partners, given the low is critical for rebuilding the trust of investors governance levels of FDI and ODA of recent years. reforms should continue to enhance public 20. Public financial management (PFM) The authorities have been providing more transparency, and accountability. and services, and finance reporting, execution (including spending on wages, goods detailed monthly data on budget (on the website of the Direction capital investment by ministry and by project) and publishing have also continued to provide the Fund Générale du Budget, MEF) budget execution details. They and Social Assistance (FAES). financial statements for the Fund for Economic on the more detailed quarterly quarterly reports, with one quarter lag, As laid out in the SMP, the authorities will publish from its quarterly meetings of the and financial status of FAES, including regular reports They will also publish all new operations continuous structural benchmark). awarded to Board of Directors (end-December beneficial ownership information on contracts public procurement contracts, including award (end-December 2024 continuous successful bidders, within 45 days of the contract's Three benchmarks are benchmark) to increase the transparency of public spending. to FSW, which would structural identified by the authorities related the related to spending commitments audits. The additional PFM recommendation (paragraph further strengthen internal and external the volume of unspecified spending in IV staff report) remains valid (including limiting of the Article the budget). monitoring by staff in the context of the recent tailored safeguard and 21. Recommendations Strengthening the governance mission of March 2024 should be implemented urgently. would also be key for enhancing the accountability arrangements in reserves management commit to undertaking (in close of central bank operations. The BRH should review of reserves transparency with staff and through Fund CD) an external comprehensive for central consultation shortcomings and align with leading practices management practices to address current asset allocation; related to, inter alia: (i) governance; (ii) poloy/gudeinestaradegie. BRH a banks on aspects should establish a roadmap to guide the through and (ii) portfolio composition. The review an external assessment of its portfolio to transition in the medium term. The BRH should undergo nature and quality of the assets); and (ii) determine: (i) the actual level of liquidity (considering the to effectively transition to a that may be available to the BRH, in the short term, to address the the alternatives of liquidity and security. In order more aligned with the principles 2015 MCM reserve portfolio assessments and the highlighted in the 2016 and 2019 safeguards asset shortcomings policy and guidelines as well as the strategic Technical Assistance over the investment benchmark which entails a medium-term plan for allocation, the SMP introduces a structural its new strategic asset allocation, updated improving the composition of the investment portfolio, benchmark, end June 2025). investment guidelines (structural investment policy, and updated that 2021 SDR allocation. The authorities conveyed 22. Staff discussed issues related to the converted into US dollars to service the after the 2021 SDR allocation, part of the SDRs was INTERNATIONAL MONETARY FUND 15 asset shortcomings policy and guidelines as well as the strategic Technical Assistance over the investment benchmark which entails a medium-term plan for allocation, the SMP introduces a structural its new strategic asset allocation, updated improving the composition of the investment portfolio, benchmark, end June 2025). investment guidelines (structural investment policy, and updated that 2021 SDR allocation. The authorities conveyed 22. Staff discussed issues related to the converted into US dollars to service the after the 2021 SDR allocation, part of the SDRs was INTERNATIONAL MONETARY FUND 15 --- Page 19 --- HAITI have been used to pay obligations to Since then, SDR holdings government's external obligations. are usually made in gourde of SDR resources to the Haitian government the IMF. All transfers of understanding and/or retrocession agreement, equivalent and are subject to a memorandum the importance of maintaining strong the nature of these transfers. Staff emphasized depending on of the SDR allocation and of avoiding potential institutional frameworks governing the fiscal use Staff also underscored the need for between SDR holdings and allocation. the BRH or costs from a large gap and for communicating publicly on measures for SDR-related spending usable currencies-and the transparency conversion of their SDR allocation into freely MEF websites any future conversions. need to engage Fund staff on future SDR and Exchange Rate Policy D. Monetary in recent years and the policy framework was strengthened reduced 23. Haiti's monetary as financing of the budget was stance has been tighter than programmed, monetary of the Inflation: Contribution of Domestic and Imported Components thereby enhancing the credibility to zero, inflation has (Percent) Domestici cinflation - Importedi inflation policy frameworks. Domestic accounted for over 60 percent of total inflation since 2023.The current policy mix to reduce September the combination of continued inflation (through financing of the fiscal adjustment and zero monetary should help bring inflation down from budget) real 20 high levels (which led to large negative currently the 2 N N S 4 4 4 R 24 rate of about 15 percent). Nonetheless, be 2 2 5 E 5 & 2 E o 2 restrictive monetary and fiscal policies will not 8 8 Informatics (HSI and Bank ofthef Republic ofHaiti inflation under control without a Sources Haitian Institute of atistic sufficient to keep normalization of the security outlook. Fiscal out, with no monetary financing of the until 2022, has been phased dominance, a pervasive problem 2024). Staff continued to recommend: for FY2024 (ending in September deficit expected Interventions Exchange Rate and Foreign Exchange Greater exchange rate flexibility; credit to the NFPS as the main anchor 60 40 A ceiling on avoiding monetary financing of the SAL F to continuing -20 deficit; and -40 -60 -80 cani JSS operations at a -120 -100 rights Short-term liquidity-absorbing and full allotment to 8 8 8 a 9 8 4 4 4 fixed rate (policy rate) a N 2 E S E S and exchange rate E S 3 strengthen the monetary Sources: Bank of the Republic of Haiti and IMF staff estimates. frameworks. interventions in the foreign exchange (FX) market The BRH should continue to limit its NIR. Deposit and 24. and signaling a build-up of excessive exchange rate volatility and to smoothing which limits the effectiveness of monetary policy credit dollarization remains high (Figure 5), and financial instability. Recent data susceptibility to external shocks heightens the economy's 16 INTERNATIONAL MONETARY FUND E S E S and exchange rate E S 3 strengthen the monetary Sources: Bank of the Republic of Haiti and IMF staff estimates. frameworks. interventions in the foreign exchange (FX) market The BRH should continue to limit its NIR. Deposit and 24. and signaling a build-up of excessive exchange rate volatility and to smoothing which limits the effectiveness of monetary policy credit dollarization remains high (Figure 5), and financial instability. Recent data susceptibility to external shocks heightens the economy's 16 INTERNATIONAL MONETARY FUND --- Page 20 --- HAITI in the FX market are also to rebuild NIR. Staff suggest that the authorities' interventions recommended that the BRH: such as well-designed weekly FX mechanism for FX interventions, Put in place an appropriate these auctions should be designed in such a way auctions, in lieu of the FX allocation system; standing, either directly or through is to all intermediaries in good that: a) access to bid granted the or level of exchange rates that market makers; b) no constraints are imposed on range entirely by participants' bid and c) allotment at the auction is determined bidders can submit; prices; work on an FX market intervention rule; and Advance its ongoing the revision of banks' net open position limits. Complete and should continue. The revised has increased lately 25. The central bank independence ahead pending reforms in the medium central bank law should be a platform to push the draft of the the pending issue related to composition term. Staff will continue to discuss with the authorities and ways to minimize the risks that very the presence of external members) of the Board (including unauthorized parties. sensitive information be appropriated by E. Financial Sector Resilience 26. Background. Haiti's financial system is Credit to GDP Gap small, with the assets (excluding the central bank) 10 (Percent) of the entire system equivalent to less than 20 percent of GDP. Haiti also has underdeveloped -5 IIl - a capital markets, with limited trading activity in -10 bonds, and other securities. It will greatly -15 stocks, Credit-to-GDP -20 benefit from financial deepening. -25 declined to 5 percent in FY2024 (from 10.5 -30 in 2019) as banks reduced lending to the percent sector, because of the security Sources: Reserve Bank of Haiti and IMF staff of the calculations. credit- to GDP ratio from trend, private mainly gap at Note: Credit with gap one IS the sided percent HP deviation filter crisis. Staff estimated the credit-to-GDP estimated negative 22 percent in June 2024. Haiti's banking banks holding more than 80 percent of concentrated, with the three largest also sector remains highly crisis and governance issues have assets. The worsening of the security financial system have increased, as reflected in lower capital adequacy weakened the financial sector. Vulnerabilities loans-from 5 percent in 2020 to 12.8 percent of non-performing ratio of ratios and a more-than-doubling meet the minimum capital adequacy in June 2024. All banks but two, which are state-owned, in distress (National Bank of Credit) was The Board of one of the two public banks was under the 12 percent. and the new Board placed replaced in early August, following internal investigations, is needed to fully assess the risks faced by the supervision of the central bank. More information and the public funds required. sector, including the size of a possible recapitalization banking sector, financial technical assistance on stress testing for the commercial Authorities have requested INTERNATIONAL MONETARY FUND 17 in June 2024. All banks but two, which are state-owned, in distress (National Bank of Credit) was The Board of one of the two public banks was under the 12 percent. and the new Board placed replaced in early August, following internal investigations, is needed to fully assess the risks faced by the supervision of the central bank. More information and the public funds required. sector, including the size of a possible recapitalization banking sector, financial technical assistance on stress testing for the commercial Authorities have requested INTERNATIONAL MONETARY FUND 17 --- Page 21 --- HAITI income statements, and asset quality indicators and BRH staff is collecting data on balance sheets, banking supervision, with Fund write-off flows, etc.). The BRH has been strengthening But six years (NPLS, framework and move to risk-based supervision. assistance, to upgrade the regulatory In order to preserve financial stability, recession and security crisis have hurt the financial system. These measures aimed of of measures from moratoria to loan restructuring. the BRH adopted a range hotels, agriculture and of credit to sectors such as private construction, to facilitate the granting impact on economic activity and job agribusiness, real estate promotion, which have important sector's exposure to the current The BRH has also conducted a survey of the financial and creation. results point to the need of more in-depth analysis prolonged crisis. The preliminary risks, which will be performed with help with the stress-testing of the financial system's assessment, from IMF staff. of the the resilience authorities should focus on strengthening 27. Over the medium term, that aligns with Basel standards sector. Policies would include: a regulation on liquidity the results financial risk-based supervision approach operationalizing (which has already been initiated), a and the enhancement of off-site institutions' risk assessment grids and rating matrix, from financial Additional reform efforts should focus on: and on-site inspection capabilities. of the BRH (ELA). Staff has discussed with BRH the possibility for Emergency liquidity assistance beneficial given banks continue to retain liquidity providing ELA to banks, as it could prove reasons. The BRH is considering it. precautionary carried out a conclusive test of the new risk assessment Banking supervision. The BRH has the revised regulation on credit matrix on two banks. It adopted and published and grids and rating version of the revised regulation on credit risk classification risk concentration. The final supervision department, is expected by provisioning, recently reviewed by the BRH's banking chart of accounts for financial Staff recommended to: (i) finalize the new end January 2025. (ii) reactivate off-site supervision institutions? -submitted to stakeholders for comments- of the annual on-site inspection and (ii) continue the execution following a quasi-suspension, program. The Council of the financing of terrorism (AML/CFT). Financier Anti-money laundering/combating the Unité Centrale de Renseignement Ministers has adopted a new Decree Reorganizing law. The decree aims to ensure the Financial Intelligence Unit (FIU) organic and its (UCREF) to replace to conduct operational and strategic analysis, UCREF's operational autonomy, its power agencies. The decree has of information held by other government access to a broad range the Board of Directors and its full including by nominating and started being implemented, exercises its broader powers is necessary to ensure that the FIU fully framework implementation 2023 decree which revamped the AML/CFT responsibilities. Separately, an April in the latest report by on 18 of the 40 FATF recommendations allowed Haiti to receive upgrades TA missions on Haiti's banking chart of account alignment standards with 2 Staff has provided extensive support through which past concluded in October 2024, focused on Basel III liquidity Bank. IFRS 9. The most recent TA engagement, the Department of Banking Supervision of the Central and the drafting of a licensing manual by 18 INTERNATIONAL MONETARY FUND to ensure that the FIU fully framework implementation 2023 decree which revamped the AML/CFT responsibilities. Separately, an April in the latest report by on 18 of the 40 FATF recommendations allowed Haiti to receive upgrades TA missions on Haiti's banking chart of account alignment standards with 2 Staff has provided extensive support through which past concluded in October 2024, focused on Basel III liquidity Bank. IFRS 9. The most recent TA engagement, the Department of Banking Supervision of the Central and the drafting of a licensing manual by 18 INTERNATIONAL MONETARY FUND --- Page 22 --- HAITI was also made to the effectiveness Caribbean Financial Action Task Force. Recent progress risk assessment, the of some work on the national of the AML/CFT system, including the resumption of a tool for riskin December 2025, and the operationalization now expected to be completed the BRH. The authorities should build on this based supervision of financial institutions by to exit the FATF grey list and ease and continue to address the other steps necessary assessing the risks related progress banking relationships, including potential pressures on correspondent further pursuing efforts to implement riskthe informal cash-based sector and legal persons, the to on-site inspections (to the extent permitted by based supervision of Fls by stepping up and ensuring transparency situation) and applying remedial actions for non-compliance, should also take security ownership information on legal persons. The authorities and of basic and beneficial Non-Financial Businesses for high-risk Designated and urgent steps to designate supervisors and notaries and lawyers performing trust Professions such as gambling and lottery sectors; service provider (TSCP) activities. company PROGRAM MONITORING and two test dates: December 2024 two reviews (February 2025 and August 2025) This SMP envisages end-March and end-September 2025. and June 2025. ITs will apply to Targets (QTs) are presented in Table 1, 28. Quantitative targets (QTS). Periodic Quantitative balance; (ii) a ceiling of zero on the Attachment 1 and comprise: (i) a floor on the NFPS primary international reserves (NIR) of the central Bank's net credit to the NFPS; (ii) a floor on net Affairs and Labor Central allocations to the Ministry of Social bank; (iv) a floor on the sum of the budget and Ministry of Public Health; and (v) (MAST), Ministry of Education, Ministry of Agriculture, sector external borrowing (including continuous QTs of a zero ceiling on non-concessional public accumulation. A floor on central government the central bank) and on domestic and external arrears on the NFPS target (IT). The QTs include an asymmetric adjustor fiscal revenue is set as an indicative external budget support, allowing the balance and NIR for shortfalls in expected in infrastructure, primary given the need to increase productive spending government to spend the surplus credit to the NFPS includes an adjustor to allow and national police. The QT on net in FY24 social spending, assets related to: (i) payments for expenses contracted of drawdowns in central government 2024 (up to HTG 9.2 billion); (ii) disbursements but not effectively disbursed by end-September end-September 2024 and debt relief from from the 2023 Food Shock Window by unspent resources and Relief Trust. the Catastrophe Containment has identified 11 benchmarks that will help 29. Structural benchmarks. The proposed program mobilization (and tax policy and tax administration implement (or lock in recent) reforms on revenue transparency, and accountability to measures, including related to digitalization), governance, and transparency in the use of public public financial management (budget reporting improve (Attachment 1, Table 2). spending); and enhance data transparency to the Fund for SMP purposes are manageable, 30. Data. Shortcomings in the data provided problems at the central bank in the efforts to recover from the technological after meaningful INTERNATIONAL MONETARY FUND 19 Structural benchmarks. The proposed program mobilization (and tax policy and tax administration implement (or lock in recent) reforms on revenue transparency, and accountability to measures, including related to digitalization), governance, and transparency in the use of public public financial management (budget reporting improve (Attachment 1, Table 2). spending); and enhance data transparency to the Fund for SMP purposes are manageable, 30. Data. Shortcomings in the data provided problems at the central bank in the efforts to recover from the technological after meaningful INTERNATIONAL MONETARY FUND 19 --- Page 23 --- HAITI relative to the substantial results achieved in the summer of 2023 which has led to initial setbacks mission to assess GDP data sources and of the 2022 SMP. 3 IMF staff will also conduct a context whether the current structure of the economy-which methodology. This work will ascertain and human capital since at least declines in capital stock, total factor productivity, suffered severe is still appropriately represented by the 2020, as well as huge population displacement- in due course. The provision of monetary data benchmark year or whether changes are necessary to NIR, have been meaningful since had been subject to delay, until recently. Revisions, especially Timeliness has improved since late and the surge of gang activity in early 2024. of the IT shock; and it completed the manual recompilation 2024 when activities at the BRH normalized limitations in summer has identified data compilation data. Recent TA from the Fund's Statistics Department which affect the estimates of errors and International Investment Position data, the BOP and FY2023, Table 4b) and they are currently being omissions (equivalent to 3.4 percent of GDP in improved over the last two years, despite addressed. The timeliness of fiscal data has considerably Nonetheless, risks to the brain drain due to displacements caused by insecurity. which considerable especially in light of the prevailing security environment implementation of the SMP remain, disrupting activity and supply chain. could affect fiscal targets (in particular tax revenues) by STAFF APPRAISAL with a challenging outlook multidimensional crisis, a political transition, 31. Haiti faces a is beset by both global and country-specific (idiosyncratic) which is highly uncertain. The country to causing terrible human suffering, which have heightened its fragility. In addition value chains and shocks, blocked the flow of goods and services and disrupted escalating gang violence has half the suffering acute food These have further fueled inflation and left population and insecurity that will supply. Risks to the outlook include worsening political instability Pervasive issues insecurity. activity and the ability to implement reforms. governance The constrain further business over the last few years as well as potential growth. have further undermined growth prospects to suppress growth and feed inflation shock caused by the security crisis will continue supply-side unless the security outlook improves. the authorities are firmly committed to 32. Despite domestic and global difficulties, somewhat the impact of the various a new SMP and have managed to contain Net international reserves were negotiating outcomes. shocks, thereby averting even worse macroeconomic 2024). Despite the political instability at the end of FY2024 (September valued at nearly US$1billion Haiti's two key economic institutions have remained institutional framework, feasible measures and the crumbling have consistently attempted to adopt continuously engaged with the Fund. They a nine-pillar strategy to mitigate the the central bank has been designing and implementing 3 After the IT incident, post-incident analysis and action plan; 2) strengthening and risk of recurrence: 1) preparing a comprehensive IT infrastructure upgrades; 4) providing employee training cybersecurity measures; 3) undergoing through 6) adhering to regulatory compliance; 7) establishing a disaster IT awareness; 5) collaborating with external experts; operations center; and finally, 9) attracting Business Continuity Planning; 8) setting up a 24/7 security Recoveryand signed with universities. experts with exchange programs 20 INTERNATIONAL MONETARY FUND 3 After the IT incident, post-incident analysis and action plan; 2) strengthening and risk of recurrence: 1) preparing a comprehensive IT infrastructure upgrades; 4) providing employee training cybersecurity measures; 3) undergoing through 6) adhering to regulatory compliance; 7) establishing a disaster IT awareness; 5) collaborating with external experts; operations center; and finally, 9) attracting Business Continuity Planning; 8) setting up a 24/7 security Recoveryand signed with universities. experts with exchange programs 20 INTERNATIONAL MONETARY FUND --- Page 24 --- HAITI level of economic activity in the imbalances and ensure a reasonable to limit macroeconomic data and information on previously agreed country. They have also continued to provide the delicate political context, and when the SMP had lapsed. Despite full benchmarks, even previous the authorities have been able to demonstrate thanks to a highly inclusive consultative process, Program Monitoring Committee. and support for the SMP through the high-level ownership reforms that can window of opportunity to implement 33. The authorities have a narrow and long-term potential. Staff build resilience and eventually restore its mediumAn help Haiti including gender budgeting measures. welcomes the timely passing of the 2024-25 budget of revenue to support the country's urgent government priority is re-starting the mobilization The measures under the new SMP needs and boost well-targeted spending. massive development should help achieve these goals. net is essential to cushion the impact of Continued strengthening of the social safety end, the authorities have 34. and alleviate widespread poverty. To this fuel are the shocks on the population slowly SO that changes in international prices sought to implement the fuel reform strategy or in an ad hoc manner as in the past. Staff gradually passed on to consumers, rather than suddenly this reform, and effectively communicate recommends that the authorities continue to implement the most vulnerable. The it with mitigating measures to protect the strategy, but accompany the quality and transparency of public spending. should also sustain efforts to improve commitments. government should be audited in line with SMP The use of FSW resources the economy's resilience to strategy to continue to strengthen This assistance 35. A government-led support of the international community. multiple shocks requires the financial medium, and long term. Without it, Haiti to allow quality spending, over the short, take the form of grants. is indispensable compression. External assistance should the will continue to suffer large import non-concessional loans, to ensure consistency with The authorities should avoid contracting would undermine debt sustainability. SMP commitments. Non-concessional loans has been appropriate and careful pace of monetary tightening to 36. The authorities' inflation. The fiscal and monetary authorities' commitment consistent with the goal of fighting and it has enhanced the monetary financing of the deficit at zero is commendable But this restrictive stance keeping frameworks, despite still-high supply-side inflation. The credibility of the policy without a normalization of security. will not be sufficient to keep inflation under control 2023-24, remain a valuable buffer given the adequate foreign exchange (FX) reserves, re-built during to smooth excessive exchange should continue to be used only shocks Haiti faces. FX intervention policy adjustment. The alignment of the not substitute for necessary macroeconomic The FY2023 rate volatility, is critical for avoiding financial risks. foreign reserves framework with best practices by June 2025 would be important financial audit of the BRH is urgent and its eventual publication for demonstrating transparency. financial risks. vulnerabilities is paramount for mitigating 37. Addressing financial-sector undermined the financial sector. The risks The worsened security crisis and recession have close monitoring and underscore the non-performing loans (NPLS) warrant associated with high INTERNATIONAL MONETARY FUND 21 The alignment of the not substitute for necessary macroeconomic The FY2023 rate volatility, is critical for avoiding financial risks. foreign reserves framework with best practices by June 2025 would be important financial audit of the BRH is urgent and its eventual publication for demonstrating transparency. financial risks. vulnerabilities is paramount for mitigating 37. Addressing financial-sector undermined the financial sector. The risks The worsened security crisis and recession have close monitoring and underscore the non-performing loans (NPLS) warrant associated with high INTERNATIONAL MONETARY FUND 21 --- Page 25 --- HAITI The BRH has been strengthening banking supervision, need for an urgent plan to limit their growth. framework and moving to riskwith the goal of upgrading the regulatory with Fund assistance, be sustained, aided by technical assistance. based supervision. Such efforts must data provision to the Fund for Staff welcomes the authorities' progress in improving and timeliness of 38. and trusts it will continue. The quality program and surveillance purposes should continue to be the top priority. monetary and reserve-asset data, and budget execution, technical assistance. will be addressed with forthcoming Real-sector data weaknesses commitment to publish the Governance Diagnostic 39. Staff welcomes the authorities' the implementation of the SMP by action plan. This would support Report and associated in close collaboration with development enhancing governance and should be implemented is essential for ensuring inclusive growth Sustaining progress on strengthening governance partners. partners. sector (to attract FDI) and development and building the trust of both the private for helping the country deal engagement with the Fund has been important request for Haiti's strong difficulties. Fund staff therefore supports the authorities' with protracted and serious of the SMP remain, especially in 12-month SMP. Nonetheless, risks to the implementation added a new environment. The new SMP should help give light of the prevailing security and political economic resilience. The new SMP momentum to the reforms and sustain them, further enhancing assistance. In line with the Fund will continue to be supported with Fund capacity development closely with Haiti's main States, staff will also coordinate Strategy for Fragile and Conflict-Affected implementation risks, in accordance with the development partners, which should help mitigate concluded 2024 Article IV Consultation. Engagement Strategy as part of the recent Country 22 INTERNATIONAL MONETARY FUND --- Page 26 --- HAITI Table 2. Haiti: Selected Economic and Financial Indicators, 2021-29 (Fiscal year ending September 30) Nominal GDP (2023): US$21.5 billion Population (2021): 11.9 million GDP per capita (2021): US$1,765 Percent of population below poverty line (2021): 52.3 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Est. Proj. Proj. Proj. Proj. Proj. (Change over previous year; unless otherwise indicated) National Income and Prices GDP at constant prices -1.8 -1.7 -1.9 -4.0 0.5 1.0 1.5 GDP deflator 1.5 1.5 19.3 29.8 31.5 29.1 23.2 17.6 10.7 10.1 9.6 Consumer prices (period average) 15.9 27.6 44.1 25.8 19.7 15.4 10.6 7.9 Consumer prices (end- of period) 13.1 38.7 31.8 27.9 18.6 7.4 12.2 9.3 7.4 7.0 External Sector Exports (goods, valued in U.S. 8 31.5 29.1 23.2 17.6 10.7 10.1 9.6 Consumer prices (period average) 15.9 27.6 44.1 25.8 19.7 15.4 10.6 7.9 Consumer prices (end- of period) 13.1 38.7 31.8 27.9 18.6 7.4 12.2 9.3 7.4 7.0 External Sector Exports (goods, valued in U.S. dollars, fo.b.) 27.7 13.5 -25.5 -19.8 10.0 17.0 Imports (goods, valued in U.S. dollars, f.o.b.) 19.8 7.8 13.9 11.3 11.9 -1.0 -9.9 11.0 6.0 5.5 5.0 4.5 Remittances (valued in U.S. dollars) 22.5 -7.3 0.1 9.0 5.0 5.0 5.0 Real effective exchange rate (eop; appreciation) 1/ -5.0 13.8 10.9 33.0 4.5 4.0 Money and Credit (valued in gourdes) Credit to private sector 15.2 17.4 -6.2 -13.1 15.9 Base money 14.6 11.5 9.9 9.9 Broad money 21.5 23.1 3.1 7.3 11.8 10.9 10.3 9.4 8.6 38.2 21.1 4.6 2.9 12.7 10.5 11.3 10.9 9.5 (In percent of GDP; unless otherwise indicated) Central Government Overall balance (including grants) -2.3 -1.8 0.9 6.7 -0.1 1.4 -1.5 Domestic revenue -1.6 -1.7 5.9 5.3 6.4 4.8 4.9 5.1 5.4 Grants 5.7 5.9 1.0 1.3 0.9 6.8 1.1 0.7 0.3 0.3 Expenditures 0.3 Current 9.3 8.3 6.4 4.9 6.1 7.2 7.2 7.5 7.8 expenditures 7.4 6.8 4.9 3.8 4.2 4.2 4.3 Capital expenditures 4.5 4.6 1.9 1.6 1.5 1.0 1.9 3.0 2.8 Overall balance oft ther nonfinancial public sector 2/ -2.2 -1.7 0.0 6.2 3.1 3.2 -0.1 -1.4 -1.5 -1.6 -1.7 Savings and Investment Gross investment 18.0 15.9 13.9 6.3 7.0 9.7 13.2 18.2 Of which: public investment 1.9 1.6 1.5 1.0 1.9 3.0 22.4 Gross national savings 2.8 3.1 3.2 18.5 13.5 10.4 5.7 6.4 8.8 12.0 17.1 21.5 External current account balance (incl. investment 18.0 15.9 13.9 6.3 7.0 9.7 13.2 18.2 Of which: public investment 1.9 1.6 1.5 1.0 1.9 3.0 22.4 Gross national savings 2.8 3.1 3.2 18.5 13.5 10.4 5.7 6.4 8.8 12.0 17.1 21.5 External current account balance (incl. official grants) 0.4 -2.3 -3.5 -0.6 -0.6 -0.9 Net fuel exports -1.2 -1.1 -0.9 -3.1 4.5 -3.6 -2.4 -2.2 -2.2 -2.3 -2.3 -2.2 Public Debt External public debt (medium and long- term, eop) 12.9 12.3 12.9 1.5 1.4 2.7 Total public sector debt (end- -of- period) 28.9 29.5 28.5 14.6 4.0 5.2 6.3 External public debt service 3/ 9.4 11.9 11.6 12.0 12.5 13.0 8.1 11.8 13.5 3.3 4.6 4.5 5.8 6.6 Memorandum Items: (In millions of dollars, unless otherwise indicated) Net international reserves 4/ 456 119 391 1,068 1,225 Gross international reserves 2,534 1,408 1,555 1,702 1,847 In months of imports of thef following 2,067 2,346 2,526 2,651 2,801 2,951 3,111 3,271 year 5.6 4.7 5.3 5.7 5.7 5.7 5.7 Nominal GDP (millions of gourdes) 1,699,208 2,168,223 2,798,324 3,468,166 4,294,144 5.8 5.8 5,100,413 5,730,978 6,405,769 7,127,326 Sources: Ministry of Economy and Finance; Bank of the Republic of Haiti; World Bank; Fund staff estimates and projections. 1/1 Ther real effective exchange rate for FY2024 reflects August 2024 data. 2/ Includes transfers to the state- owned electricity company (EDH), and unsettled payment obligations. 3/In percent of exports of goods and nonfactor services. Includes debt service settled with debt relief. For FY2024, debt service includes estimat es of all debt originally due in FY2024 and thei interest due to PDVSA for the first quarter of FY2024 (October December 2023). the principal of PDVSA 4/ Excludes banks' FX deposits, Venezuela escrov W ac count, IMF liabilities (except Food Shock Window), and swaps. 2024 data. 2/ Includes transfers to the state- owned electricity company (EDH), and unsettled payment obligations. 3/In percent of exports of goods and nonfactor services. Includes debt service settled with debt relief. For FY2024, debt service includes estimat es of all debt originally due in FY2024 and thei interest due to PDVSA for the first quarter of FY2024 (October December 2023). the principal of PDVSA 4/ Excludes banks' FX deposits, Venezuela escrov W ac count, IMF liabilities (except Food Shock Window), and swaps. INTERNATIONAL MONETARY FUND 23 --- Page 27 --- R Table 3a. Haiti: Non-Financial Public Sector Operations, 2021-29 (Fiscal year ending September 30; in millions of gourdes) FY2021 FY2022 FY2023 FY2024 R FY2024Q1 FY202402 FY202403 FY2024 FY2025 FY2025 FY2026 FY2027 FY2028 FY2029 Total Revenue and Grants 118,340 142,478 204,261 257,980 Budget 238,647 Budget Est Est Est Est Budget Proj Proj Proj Proj Proj. Domesticn revenue 100,635 114.919 178,483 196,545 172,678 48,988 34,733 41,291 401,327 302,860 259,314 297,642 325,047 382,088 438,776 Domestic taxes 74,012 82,525 111,881 72,018 60,692 48,988 31,094 34,733 291 7,118 227,739 210,413 262.667 308,735 364,689 420,450 Customs duties 22,613 27,341 60103 107,095 101,125 17,825 12.591 22,134 26,875 14,261 106,579 99,575 129,274 163,437 194,028 232,888 269,812 Ofwhich fuel taxes 0 20,312 19,360 20,480 6,756 60,246 100,809 75,372 92.074 106,322 122,044 139.355 Other current revenue 4009 5,053 17,431 6.024 8,879 23,870 23,848 31,036 36,863 41,421 46,298 51,513 Grants 17,706 27.559 6498 10862 68 9 155 293 27,355 5,767 7,.156 8,385 756 1.283 Budgets support 25,779 61,435 65,969 234209 75,121 48,901 34.975 16,312 17,399 Projectgrants 5,754 8,957 0 7,995 0 5,363 2.752 0 0 18,325 Capitaltransfer2 2/ 1.951 18,602 25,779 53,440 65,969 28,370 75,121 43,538 767 7,.156 8,385 756 1.283 Budgets support 25,779 61,435 65,969 234209 75,121 48,901 34.975 16,312 17,399 Projectgrants 5,754 8,957 0 7,995 0 5,363 2.752 0 0 18,325 Capitaltransfer2 2/ 1.951 18,602 25,779 53,440 65,969 28,370 75,121 43,538 32.223 16,312 17.399 18,325 Total Expenditure 3/ 205,839 0 Current expenditure 158,220 126.058 180,515 146,603 179,017 273,028 232,913 35,480 30,200 30,491 169,094 301,065 261,969 369,632 409,928 482,927 556,606 Wages ands salaries 55,130 63,030 135,913 73,846 162.964 141,019 34,312 29,500 28,537 132,799 175,498 78,646 215,917 248, 164 286,551 328,025 Goods ands services 35.A72 32,504 81,883 80,549 20,369 16.624 16,529 74,907 92,530 96,366 117,009 134,341 153,362 174,200 Interest payments 6,014 6,596 39,029 49,901 44,697 8,508 8,405 7,896 39,608 51,912 51,655 63,904 74,669 86,664 99,990 Transfers ands subsidies 28,843 44,474 15,063 7,975 2.932 ,701 2,178 2.084 1,781 7,628 1,228 1,697 8.897 11, 196 14,496 16,416 Ofwhich: TransferstoEDH 9,111 7,412 8,038 22,098 8,642 13,122 3,256 2.387 2,331 10,656 24,109 23,959 26,107 27,957 32,029 37,418 Of which: Fuel direct subsidies sto oil om panies 10,682 31,242 3,130 11,076 9,530 7.899 3.203 3,564 Exceptionale expenditures 4/ 600 0 6,150 950 0 0 0 Capitale lexpenditure 5,720 4,970 0 0 Domestically-f financed 32,161 15,359 11,861 33,913 43,104 110,064 91,894 1,169 700 1.954 36,295 125,567 83,323 153,715 161,764 196,377 228,581 Foreign-financed 16,802 22,052 17,326 1,478 16,774 1,169 700 1.954 7.925 46,065 35,470 44.986 59,488 82,891 103,346 Central 25,779 68,586 5,120 28,370 79,502 47,853 108,730 102.277 113 3,486 125,235 beudegpamedetenaly government balance incl. 161,764 196,377 228,581 Foreign-financed 16,802 22,052 17,326 1,478 16,774 1,169 700 1.954 7.925 46,065 35,470 44.986 59,488 82,891 103,346 Central 25,779 68,586 5,120 28,370 79,502 47,853 108,730 102.277 113 3,486 125,235 beudegpamedetenaly government balance incl. financedprojects grants 39,879 -38,037 25,244 -15,049 5,734 13,508 4,533 10,801 232,233 1,795 -2,655 71 1,990 84,881 100,839 117,831 Primary Balance OfNFPS, incl. grants and other transfers to EDH 33,865 -40,783 31,442 43,544 25,244 7,897 14,885 3,508 4,533 10,801 26,394 1,795 3,703 1,765 1,084 4,753 10,921 Adjustment( Gnantedparnentoligalens 2,031 33,219 12,117 7,435 15,686 6,617 12,582 239,861 3,023 -958 -63,093 73,685 86,343 101,415 Overall Balance of NFPS, including grants -37,849 37,781 256 25,213 31 15,049 4,063 7,426 6,313 15,726 0 0 5,734 9,445 11,959 4,487 216,507 1,795 -2,655 Overall Baland ce eo NFPS, including grants (excl. 686 6,617 12,582 239,861 3,023 -958 -63,093 73,685 86,343 101,415 Overall Balance of NFPS, including grants -37,849 37,781 256 25,213 31 15,049 4,063 7,426 6,313 15,726 0 0 5,734 9,445 11,959 4,487 216,507 1,795 -2,655 Overall Baland ce eo NFPS, including grants (excl. capital transfer) 5/ -37,849 -37,781 31 -15,049 71,990 -84,881 -100,839 -117,831 5,734 9,445 11,959 87 10,668 795 2,655 990 -84,881 -100,839 117,831 Financing. External netfinancing NFPS 37,848 37,780 -31 15.049 -5,734 9, ,445 11,959 4,4 487 -216,507 1,795 2,655 71,990 84,881 100,839 5,865 468 9,400 -640 2.257 -420 1,240 117,831 Loans net) 2.640 -5,822 400 640 2.257 420 1.240 323 323 202.528 1,011 2.633 84,069 92,987 103.727 Disbursements 4,851 3,450 15,146 9,151 202,528 011 2.633 4,717 84,069 92,987 103,727 Amortizati 7,491 -9.272 9,4 100 15, 786 6,894 -420 240 323 4,381 16 76,506 85,965 96.087 106,910 Arrears (net) 3,225 4,354 -202.528 3,370 1,683 1.789 1,896 -3,099 -3,183 Internal net financing 43,714 39.249 9,368 15,689 7,991 -9,025 -10,719 64 13,979 Banking system 50,483 52,437 27,690 36,000 -8,128 -6,370 803 -2.235 2,806 -2.728 812 7.852 14,104 BRH (includes sthe FSW)6/ 46,731 41 1.274 26, 5.709 24,000 7,022 11 ,791 -9,740 16,204 19,032 11,941 17,1 .102 23852 14, 104 Commercial banks 3,752 .163 981 12,000 4,424 84 Nonbank financing7 7/ 6,769 13,188 18, 321 -20,311 15.013 3,663 -897 3,370 3,621 151 16,204 19,032 .941 17,102 23.852 4,348 -4.968 744 19.010 19,010 669 16.290 16,000 Memo prandum Items Forgone fueltaxes andf fuel dire ects subsidies 31,984 62.553 o/w Forgonef fuel taxes 21,302 31,311 /w uel direct subsidies pil companies 10,682 31.242 Health, educ cation anda agncultures spending 28,173 33,117 37,810 Nominal GDP 1.699,208 2.168,223 2.798,324 3,672,147 3,468,1 166 36,815 39,619 90 21, 710 135,419 3,468,1 166 29 94 4,294,1 144 5,100, 30,978 40 05, 69 127,326 Sources Minstry of France andEconomy andFunds staffe festmates and projections 1/includes previc ously toyimnelimseseab.dyes support that couldbe delayed. .699,208 2.168,223 2.798,324 3,672,147 3,468,1 166 36,815 39,619 90 21, 710 135,419 3,468,1 166 29 94 4,294,1 144 5,100, 30,978 40 05, 69 127,326 Sources Minstry of France andEconomy andFunds staffe festmates and projections 1/includes previc ously toyimnelimseseab.dyes support that couldbe delayed. CR debt 2/F0rFY2024 includes debt tforgiveness grantedbyv Venezuela 3/Commitmentt basis. except for domestcaly financed spending. whichis reported basis ofprojed includes expenditurest for electorala activities ands npponttopaiscipates Excudesa aone off opuatesteomegiones repayment ofttedebtto Venenuets 71 Amounts ncudes thef fulltwoyear debt t-relef under thec CCRT Tforf PY29212 22. andthefswd disbun irsem nent Y2023. Includes the net change the stock of govern ment secunties held by non-t -banks, of checkst thata arenotyet cashed, --- Page 28 --- Table 3b. Haiti: Non-Financial Public Sector Operations, 2021-29 (Fiscal year ending September 30; in percent of GDP) FY2021 FY2022 FY2023 FY2024 PASe FY2024Q1 FY2024Q2 FY2024Q3 FY2024 FY2025 FY2025 FY2026 FY2027 FY2028 FY2029 Total Revenue and Grants Domestic revenue Domestic taxes Customs duties Ofwhuch fuel axe Oth urre ent 00 00 00 0.6 Grants Budgets support 1/ 00 00 0 Project grants pital ransfer Total Expenditure 3/ .0 Cur rrente expenditure Wages andisalaries Goods ands services Interestpayments Transters sands subsidies Of which TransferstoEDH Ofwhich Fueld directs subsidies to oil compani Exceptional expendit ditures 4/ Capitale expenditure Domestically financed 00 00 Foreign- financed Central government balance incl. grants 0.0 Excludinggr rants and externallyf fnancedprojects Primary Balance of NFPS, incl. grants andothert transfers to EDH 2.0 Adjustment (unsettled payment tobligations) C Overall Balance of NFPS, grants 2.2 : including Over BalanceofNFPS, induding.grants (excl capital sfer) 5/ Financing. NFPS External netfi fin ng Loans (net) Disburs Amortization rears (net) Inte err na net financing Banking system 04 02 BRH (includes the FSW) 6/ 0.3 00 00 Commercialb Ibanks 04 02 Nonbank tinancing7/ 02 00 Memorandum Items Forgone fueltaxes andf fuel ect subsidi lies o/wl Forgone fueltaxes o/w! Fuel direct subsidies to Oilcompan Health, educ cation and agricultures spending Nominal GDP (millions.of gourdes) 1,699,208 2,168,223 2.7 798 324 3.468.1 166 3.468 468, 166 294.1 44 Sources Minntry of fFinance and.tconomy. andfund staff festma nates andp projections. Includes prevously programr med muitlateral budget supportt that oul be del yed ForF FY2024. includes debtfongivenessg grantedby Venezuela / Commitmentt bass. except ford domestealy firanceds spending. which includes expenditu tures for electoral. lactivities ands supportto poltical parties. 5/Excludes one off capitaltransfer owing gtothe repaymentof fthe debtto exuela Amounts includet ne two year debt reiefunder the CCRT forFY2021 22 and the SW sbu oursem FY2023 ncludes netchange the stock government ibes ed byr bar cks yet D be del yed ForF FY2024. includes debtfongivenessg grantedby Venezuela / Commitmentt bass. except ford domestealy firanceds spending. which includes expenditu tures for electoral. lactivities ands supportto poltical parties. 5/Excludes one off capitaltransfer owing gtothe repaymentof fthe debtto exuela Amounts includet ne two year debt reiefunder the CCRT forFY2021 22 and the SW sbu oursem FY2023 ncludes netchange the stock government ibes ed byr bar cks yet D --- Page 29 --- HAITI Table 4a. Haiti: Balance of Payments, 2021-29 (In millions of U.S. dollars on a fiscal year basis; unless otherwise indicated) FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Est Proj. Proj Proj Proj. Proj. 88 -464 -683 -158 -203 -308 -416 -399 -361 Current Account (Including Grants) -77 -653 -863 -373 -562 -541 516 -499 -461 Current Account (Excluding Grants) 3,286 3,480 -3,759 -3,481 -3,872 4,011 -4,149 -4,285 -4,386 Goods (net) 1,130 1,282 956 767 844 987 1,124 1,252 1,400 Exports of goods 1,066 1,191 870 736 776 908 1,034 1,152 1,288 Of which: Assembly industry 4,416 -4,762 4,715 4,248 4,715 -4,998 -5,273 5,537 -5,786 Imports of goods -643 -890 -707 -637 -707 -750 -791 -831 -868 Of which: Fossil fuels -490 -587 -449 424 -451 -479 -503 -528 554 Services (net) 142 101 139 111 122 128 135 142 149 Exports of services -632 689 588 -535 -573 -607 638 669 -703 Imports of services 23 24 -10 -10 -10 -21 -31 -42 Primary Income (net) 3,840 3,580 3,522 3,758 4,130 4,192 4,257 4,445 4,622 Secondary Income (net) 164 189 181 215 359 233 100 100 100 Official transfers (net) 3,316 3,072 3,076 3,353 3,520 3,696 3,881 4,056 4,218 Private transfers (net) 360 318 265 190 250 263 276 289 304 Other transfers (net) -72 85 109 765 338 488 592 592 564 Capital and Financial Accounts 55 63 57 1,527 50 50 52 54 57 Capital transfers 1/ -35 -66 -94 1,547 19 499 515 534 566 Public sector capital flows (net) 39 24 17 19 30 46 71 111 Foreign direct investment (net) -162 37 20 -46 -125 -25 -60 -80 -100 Banks (net) 2/ 12 102 814 375 -65 12 -70 Other items (net) 3/ -241 162 660 Errors and Omissions 225 -216 86 607 135 180 176 193 204 Overall Balance 225 216 -86 -607 -135 -180 -176 -193 -204 Financing -91 117 -284 180 -125 -150 150 160 160 Change in gross reserves (+ is decrease) -3 99 -11 -10 -30 -26 -33 -44 Change in IMF credit and loans (+ IS increase) -5 101 103 99 416 Exceptional financing 90 96 97 -642 o/w Changes in arrears 4/ 225 -216 86 607 135 180 176 193 204 Overall Balance 225 216 -86 -607 -135 -180 -176 -193 -204 Financing -91 117 -284 180 -125 -150 150 160 160 Change in gross reserves (+ is decrease) -3 99 -11 -10 -30 -26 -33 -44 Change in IMF credit and loans (+ IS increase) -5 101 103 99 416 Exceptional financing 90 96 97 -642 o/w Changes in arrears 4/ 3 226 o/w Debt rescheduling and debt relief 5/ Memorandum Items: decrease -7 35 -29 3 -29 -36 -36 Change in US$ denom. reserve deposits at BRH(+ is -164 147 -147 -146 Change in NIR (statistical definition) (+ is decrease) 223 337 -272 -677 -183 27.7 13.5 -25.5 19.8 10.0 17.0 13.9 11.3 11.9 Exports of goods, f.o.b (percent change) 7.8 -1.0 -9.9 11.0 6.0 5.5 5.0 4.5 Imports of goods, f.o. .b (percent change) 19.8 67.6 0.0 Projected average oil price (U.S. dollars per barrel, APSP) 69.2 96.4 80.6 81.3 72.8 70.2 68.6 6.6 Debt service (in percent of exports of goods and services) 9.4 8.1 11.8 13.5 3.3 4.6 4.5 5.8 2,067 2,346 2,526 2,651 2,801 2,951 3,111 3,271 Gross international reserves (in millions of U.S. dollars) 2,534 5.7 5.7 5.8 5.8 (in months of next year's imports of goods and services) 5.6 4.7 5.3 5.7 5.7 35,133 38,893 Nominal GDP (millions of U.S. dollars) 21,017 19,826 19,603 26,283 31,562 34,031 36,816 Sources: Bank of thel Republic of Haiti; and Fund staff estimates and projections. 1/ For FY2024, includes debt forgiveness granted by Venezuela. 2/ Changei in net foreign assets of commercial banks. 3/ Includes arrears on oil imports. from Haiti (US$500 4/ Upt to FY2023, reflects accumulation of arrears toward Venezuela. For FY2024, reflects cance cellation of arrears due to Venezuela, financed partly by payment million) andp partly by debt forgiveness granted by Venezuela. 5/For FY2021 to FY2022, includes CCRT debt relief. For FY2024, includes debt forgiveness granted by Venezuela. 26 INTERNATIONAL MONETARY FUND 2024, includes debt forgiveness granted by Venezuela. 2/ Changei in net foreign assets of commercial banks. 3/ Includes arrears on oil imports. from Haiti (US$500 4/ Upt to FY2023, reflects accumulation of arrears toward Venezuela. For FY2024, reflects cance cellation of arrears due to Venezuela, financed partly by payment million) andp partly by debt forgiveness granted by Venezuela. 5/For FY2021 to FY2022, includes CCRT debt relief. For FY2024, includes debt forgiveness granted by Venezuela. 26 INTERNATIONAL MONETARY FUND --- Page 30 --- HAITI Table 4b. Haiti: Balance of Payments, 2021-29 (In percent of GDP on a fiscal year basis; unless otherwise indicated) FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Est. Proj. Proj. Proj. Proj. Proj. 0.4 -2.3 -3.5 -0.6 -0.6 -0.9 -1.2 -1.1 -0.9 Current Account (Including Grants) -4.4 -1.8 -1.6 -1.5 -1.4 -1.2 Current Account (Excluding Grants) -0.4 -3.3 -1.4 -15.6 17.6 -19.2 -13.2 -12.3 -11.8 -11.8 -11.6 11.3 Trade balance 5.4 6.5 4.9 2.9 2.7 2.9 3.2 3.4 3.6 Exports of goods 5.1 6.0 4.4 2.8 2.5 2.7 2.9 3.1 3.3 Of which: Assembly industry -24.1 -16.2 -14.9 14.7 -15.0 -15.0 -14.9 Imports of goods -21.0 24.0 -4.5 -3.6 -2.4 -2.2 -2.2 -2.3 -2.3 -2.2 Of which: Fossil fuels -3.1 -2.3 -3.0 -2.3 1.6 -1.4 -1.4 -1.4 -1.4 -1.4 Services (net) 0.7 0.5 0.7 0.4 0.4 0.4 0.4 0.4 0.4 Receipts -3.0 -3.5 -3.0 -2.0 -1.8 -1.8 1.8 -1.8 -1.8 Payments 0.1 0.1 0.0 0.0 0.0 0.0 -0.1 -0.1 -0.1 Income (net) 18.3 18.1 18.0 14.3 13.1 12.3 12.1 12.1 11.9 Current transfers (net) 0.8 1.0 0.9 0.8 1.1 0.7 0.3 0.3 0.3 Official transfers (net) 15.7 11.2 10.9 11.0 11.0 10.8 Private transfers (net) 15.8 15.5 12.8 1.7 1.6 1.4 0.7 0.8 0.8 0.8 0.8 0.8 Other transfers (net) Accounts -0.3 0.4 0.6 2.9 1.1 1.4 1.7 1.6 1.5 Capital and Financial 0.3 0.3 0.3 5.8 0.2 0.1 0.1 0.1 0.1 Capital transfers 1/ -0.2 -0.3 -0.5 -5.9 0.1 1.5 1.5 1.5 1.5 Public sector capital flows (net) 0.1 1.5 1.5 1.5 1.5 Loan disbursements 0.3 0.2 0.0 0.0 -0.5 -0.5 -0.5 -5.9 0.0 0.0 0.0 0.0 0.0 Amortization 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.2 0.3 Foreign direct investment (net) 0.4 -0.1 -0.2 -0.2 -0.3 -0.8 0.2 0.1 -0.2 Banks (net) 2/ 0.1 0.1 0.5 3.1 1.2 -0.2 0.1 0.0 -0.2 Other items (net) 3/ 0.0 0.0 0.0 Omissions -1.1 0.8 3.4 0.0 0.0 0.0 Errors and -1.1 -1.1 0.4 2.3 0. 8 0.2 0.1 -0.2 Banks (net) 2/ 0.1 0.1 0.5 3.1 1.2 -0.2 0.1 0.0 -0.2 Other items (net) 3/ 0.0 0.0 0.0 Omissions -1.1 0.8 3.4 0.0 0.0 0.0 Errors and -1.1 -1.1 0.4 2.3 0. 4 0.5 0.5 0.5 0.5 Overall Balance 1.1 1.1 -0.4 -2.3 -0.4 -0.5 -0.5 -0.5 -0.5 Financing -0.4 0.6 -1.4 -0.7 -0.4 -0.4 -0.4 -0.4 -0.4 Change in net foreign assets (+ is decrease) -0.1 -0.1 -0.1 Change in IMF credit and loans (+ is increase) 0.0 0.0 0.5 0.0 0.0 -0.1 0.5 0.5 0.5 1.6 0.0 0.0 0.0 0.0 0.0 Exceptional financing 0.4 0.5 0.5 -2.4 0.0 0.0 0.0 0.0 0.0 o/w Changes in arrears 4/ Debt rescheduling and debt relief 5/ 0.0 0.0 0.0 0.9 0.0 0.0 0.0 0.0 0.0 o/w Memorandum Items: 27.7 13.5 -25.5 -19.8 10.0 17.0 13.9 11.3 11.9 Exports of goods, f.o.b (percent change) 5.0 4.5 f.o.b 19.8 7.8 -1.0 -9.9 11.0 6.0 5.5 Imports of goods, (percent change) 80.6 81.3 72.8 70.2 68.6 67.6 0.0 Projected average oil price (U.S. dollars per barrel, APSP) 69.2 96.4 of of and services) 9.4 8.1 11.8 13.5 3.3 4.6 4.5 5.8 6.6 Debt service (in percent exports goods Nominal exchange rate 80.9 109.4 142.7 millions of U.S. dollars) 2,534 2,067 2,346 2,526 2,651 2,801 2,951 3,111 3,271 Gross international reserves (in 4.7 5.3 5.7 5.7 5.7 5.7 5.8 5.8 (in months of next year's imports of goods and services) 5.6 38,893 21,017 19,826 19,603 26,283 31,562 34,031 35,133 36,816 Nominal GDP (millions of U.S. dollars) Sources: Bank of the Republic of Haiti; andl Fund staff estimates and projections. 1/For FY2024, includes debt forgiveness granted by Venezuela. 2/ Changei in net foreign assets of commercial banks. 3/ Includes arrears on oil imports. from Haiti 4/ Up tol FY2023, reflects accumulation of arrears toward Venezuela. For FY2024, reflects cancellation of arrears due to Venezuela, financed partly by payment (US$500 million) and partly by debt forgiveness granted by Venezuela. 5/ For FY2021 to FY2022, includes CCRT debt relief. : Bank of the Republic of Haiti; andl Fund staff estimates and projections. 1/For FY2024, includes debt forgiveness granted by Venezuela. 2/ Changei in net foreign assets of commercial banks. 3/ Includes arrears on oil imports. from Haiti 4/ Up tol FY2023, reflects accumulation of arrears toward Venezuela. For FY2024, reflects cancellation of arrears due to Venezuela, financed partly by payment (US$500 million) and partly by debt forgiveness granted by Venezuela. 5/ For FY2021 to FY2022, includes CCRT debt relief. For FY2024, includes debt forgiveness granted by Venezuela. INTERNATIONAL MONETARY FUND 27 --- Page 31 --- HAITI Table 5. Haiti: Summary Accounts of the Banking System, 2021-29 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Est. Proj. Proj. Proj. Proj. Proj. I.Centralb bank Net Foreign Assets 146,005 131,774 185,645 265,511 311,781 370,065 487,193 (In millions ofU.S. dollars) 430,422 546,143 1,499 1,120 1,383 2,019 2,206 2,386 2,561 2,743 Ofv which: Gross International Reserves (US$ Mil) 2,534 2,067 2,346 2,526 2,925 Ofv which: Net Intl. Reserves (nonresidents) (US$ Mil) 2,651 2,801 2,951 3,111 3,271 1,969 1,526 1,796 2,441 2,627 2,807 2,982 Ofwhich: Net nternational reserves (US$ Mil) (Res FX+Nonres) 1/ 456 119 391 3,164 3,347 Ofv which Commercial bank forex deposits (in millions of fU.S. dollars) 1,324 1,068 1,225 1,408 1,555 1,702 1,847 1,255 1,262 1,227 1,256 1,253 1,283 1,318 1,355 Net Domestic Assets 42,096 99,713 53,094 9,371 Net credit to the nonfinancial public sector 166,625 -25,376 -52,511 -80,277 -104,224 -130,376 Of which: Net credit to the central government 2/ 237,927 252,466 249,221 249,221 249,221 249,221 249,221 249,221 168,899 242,311 261,540 254,297 254,297 Claims on central government 207,676 292,786 254,297 254,297 254,297 254,297 Central government deposits 328,498 349,591 349,591 349,591 349,591 349,591 349,591 Ofwhich: IMF CCRT debt relief 38,777 50,475 66,958 95,294 95,294 95,294 95,294 95,294 95,294 Liabilities to commercial banks (excl. 261,540 254,297 254,297 Claims on central government 207,676 292,786 254,297 254,297 254,297 254,297 Central government deposits 328,498 349,591 349,591 349,591 349,591 349,591 349,591 Ofwhich: IMF CCRT debt relief 38,777 50,475 66,958 95,294 95,294 95,294 95,294 95,294 95,294 Liabilities to commercial banks (excl. -2,634 -2,087 -2,198 2,166 -3,005 -3,005 3,005 -3,005 3,005 gourde deposits) 138,460 157,539 178,422 193,786 BRH bonds/Open market operations 209,998 226,842 248,033 266,576 285,369 Commercial bank forex deposits 3,525 2,630 4,555 28,202 28,202 28,202 28,202 28,202 28,202 134,935 154,909 173,868 165,584 198,640 Other 181,796 219,832 238,375 257,168 18,134 -11,484 44,259 -88,868 -87,434 103,537 -116,130 129,607 -144,018 Base Money 188,101 231,487 238,738 256,139 286,405 350,145 Currency in circulation 317,554 382,969 415,767 Commercial bank gourde deposits 108,670 133,411 146,758 157,526 177,872 196,328 214,514 232,478 250,063 79,431 98,077 91,980 98,614 108,533 121,226 135,631 150,491 165,704 II.Consolidated banking system Net Foreign Assets 205,868 203,605 257,043 341,521 411,179 (In millions ofU.S. 317,554 382,969 415,767 Commercial bank gourde deposits 108,670 133,411 146,758 157,526 177,872 196,328 214,514 232,478 250,063 79,431 98,077 91,980 98,614 108,533 121,226 135,631 150,491 165,704 II.Consolidated banking system Net Foreign Assets 205,868 203,605 257,043 341,521 411,179 (In millions ofU.S. dollars) 483,008 562,882 641,377 726,887 2,114 1,730 1,915 2,598 2,909 Ofv which: Commercial banks NFA (in millions of U.S. dollars) 615 610 532 3,114 3,349 3,611 3,893 578 703 728 788 868 968 Net Domestic Assets 305,095 Credit to the nonfinancial public sector 415,028 390,066 324,401 339,201 345,871 359,713 381,797 393,821 Ofv which: Net credit to the central government 2/ 206,497 296,664 318,252 315,087 334,119 346,060 363,162 387,014 401,118 202,659 293,987 316,372 313,531 332,563 344,504 361,606 Claims on central government 259,300 362,559 385,458 399,562 Central government deposits 401,598 427,991 447,023 351,179 368,281 392,134 406,237 Credit to the private sector 56,641 68,572 85,226 114,460 114,460 6,675 6,675 6,675 6,675 138,572 161,957 152,445 133,474 153,755 175,413 Ing gourdes 194,950 213,734 234,243 Inf foreign currency 72,552 77,196 69,435 53,970 64,613 75,764 86,380 97,035 108,889 Other 60,926 79,521 77,520 73,768 83,405 93,912 102,833 110,962 119,618 66,770 -75,172 -116,022 159,357 -183,476 -210,406 -233,203 -253,754 -276,344 Broad Money 510,963 618,634 647,109 665,922 750,380 922,595 Currency in circulation 828,879 1,023,175 1,120,707 Gourde deposits 98,150 123,511 124,113 132,275 152,621 171,077 189,263 207,227 224,812 Foreign currency deposits 134,373 157,617 166,705 177,363 207,712 221,896 249,226 289,920 328,009 (In millions of U.S. 618,634 647,109 665,922 750,380 922,595 Currency in circulation 828,879 1,023,175 1,120,707 Gourde deposits 98,150 123,511 124,113 132,275 152,621 171,077 189,263 207,227 224,812 Foreign currency deposits 134,373 157,617 166,705 177,363 207,712 221,896 249,226 289,920 328,009 (In millions of U.S. dollars) 270,986 329,793 348,280 348,792 383,710 429,349 476,202 517,182 558,674 2,782 2,802 2,594 2,653 2,714 2,768 2,833 2,912 2,992 (12- month percentage change) Currency in circulation 14.9 25.8 0.5 6.6 Base money 15.4 12.1 10.6 9.5 8.5 Broad money (M3) 21.5 23.1 3.1 7.3 11.8 10.9 10.3 9.4 8.6 38.2 21.1 4.6 2.9 12.7 10.5 11.3 10.9 9.5 Gourde deposits 17.3 17.3 5.8 6.4 17.1 6.8 Foreign currency deposits 64.0 21.7 5.6 12.3 16.3 13.1 0.1 10.0 11.9 10.9 8.6 8.0 Credit to the private sector 15.2 17.4 -6.2 -13.1 15.9 Credit in gourdes 14.6 11.5 9.9 9.9 3.1 6.4 -10.1 -22.3 Credit in foreign currency 19.7 17.3 14.0 12.3 12.2 33.9 30.5 -2.5 -4.8 13.1 12.6 9.5 7.9 7.8 Memorandum Items: Foreign currency deposits (% oft total private deposits) 67.4 68.3 69.4 67.9 64.9 Foreign currency credit to private sector (% of total) 45.5 50.5 52.4 65.9 65.6 64.1 63.0 Commercial banks' credit to private: sector (% ofGDP) 57.3 56.3 55.3 54.3 53.3 52.3 7.9 7.2 5.3 3.7 3.4 3.3 3.3 Real private credit sector growth 2.2 3.3 3.2 -21.2 -38.1 -40.9 2.7 2.4 2.2 Private sector credit (% of GDP) 2.5 2.8 7.9 7.2 5.3 3.7 3.4 3.3 3.3 3.2 3.2 Sources: Bank of the Republic of Haitia and Fund staff estimates and projections. 3 3.7 3.4 3.3 3.3 Real private credit sector growth 2.2 3.3 3.2 -21.2 -38.1 -40.9 2.7 2.4 2.2 Private sector credit (% of GDP) 2.5 2.8 7.9 7.2 5.3 3.7 3.4 3.3 3.3 3.2 3.2 Sources: Bank of the Republic of Haitia and Fund staff estimates and projections. 1/ Ins statistical definition. Excludes banks' FX deposits, Venezuela escrow account, IMF liabilities (except Food Shock Window), and swaps. 2/ Changes in stocks of net claims on government differ from domestic financing data in Table 2a due to differences in (cash Vs. accrual) revaluations of positions denominatedi in foreign exchange. accounting practices and in the recording of 28 INTERNATIONAL MONETARY FUND --- Page 32 --- HAITI Table 6. Haiti: External Financing Requirements and Sources, 2021-29 (In millions of US$ on a fiscal year basis; unless otherwise indicated) 1/ FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Est. Proj. Proj. Proj. Proj. Proj. 509 752 1,241 2,753 710 733 703 710 681 Requirements official transfers 77 653 863 373 562 541 516 499 461 Current account, excluding 95 96 94 1,547 12 12 12 18 17 Government debt amortization (non-IMF) 0 11 10 30 26 33 44 Net repayments to the IMF 5 3 91 0 284 180 125 150 150 160 160 Increase in reserve assets 0 0 0 Clearance of arrears 0 0 0 642 241 0 U 0 0 0 0 0 Errors and omissions 509 752 1,241 2,753 710 733 703 710 681 Sources 164 189 181 215 359 233 100 100 100 Official current transfers 100 100 100 Current project grants 148 170 181 215 320 215 16 19 0 0 39 18 0 0 0 Budget support transfers 65 70 60 1,753 50 50 52 54 57 Official capital 55 63 57 60 50 50 52 54 57 Capital project grants 0 0 0 1,467 0 0 0 0 0 Debt forgiveness (capital account) financing) 10 7 3 226 0 0 0 0 0 Debt forgiveness (exceptional 51 39 24 17 19 30 46 71 111 Foreign direct investment non-banks, other) -143 49 123 768 250 -90 -21 -68 -170 Other investment (central bank, banks, 60 30 0 0 32 510 527 552 583 Loan disbursements to the government 0 0 0 0 0 0 Net IMF financing 0 0 99 221 -1 0 0 0 0 0 0 0 SDR allocation 0 117 0 0 0 0 0 0 0 Reserve assets drawdown 90 96 97 0 0 0 0 0 0 Incurrence of arrears 0 162 660 0 0 0 0 Errors and omissions Memorandum Items: 2,534 2,067 2,346 2,526 2,651 2,801 2,951 3,111 3,271 Gross international reserves 4.7 5.3 5.7 5.7 5.7 5.7 5.8 5.8 (in months of next year's imports of goods and services) 5.6 Sources: Bank of the Republic of Haiti; and Fund staff estimates and projections. INTERNATIONAL MONETARY FUND 29 0 0 Errors and omissions Memorandum Items: 2,534 2,067 2,346 2,526 2,651 2,801 2,951 3,111 3,271 Gross international reserves 4.7 5.3 5.7 5.7 5.7 5.7 5.8 5.8 (in months of next year's imports of goods and services) 5.6 Sources: Bank of the Republic of Haiti; and Fund staff estimates and projections. INTERNATIONAL MONETARY FUND 29 --- Page 33 --- HAITI Table 7. Haiti: Financial Soundness Indicators, September 2021-June 2024 (In percent; unless otherwise stated) Sep-21 Dec-21 Mar- 22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Size and Growth 5,341 5,320 5,268 5,216 5,239 4,771 4,591 4,686 4,718 4,780 4,885 4,879 Asset volume (in USS millions ) 4,304 4,294 3,942 3,784 3,833 3,849 3,868 3,944 3,985 Deposit volume (in US$ millions ) 4,352 4,327 4,276 27.4 4.2 -7.6 -7.5 -0.3 terms), 38.8 32.2 23.7 20.6 17.3 28.2 10.2 Asset growth (in gourde yly 18.8 12.1 14.6 23.3 16.9 2.7 -9.6 -22.4 -22.5 18.8 Credit growth (net, in gourde terms), y/y 21.2 20.6 Capital Adequacy 22.3 20.8 21.4 20.7 18.2 20.3 19.6 19.4 20.4 20.3 20.3 21.4 Regulatory capital to risk -weighted assets 6.5 7.0 6.8 6.7 7.0 7.0 7.0 7.4 Regulatory capital to assets 7.9 7.6 7.5 7.2 Asset Quality and Composition 23.8 22.8 22.5 21.3 20.0 19.1 18.3 Loans (net) to assets 25.1 24.8 24.8 24.2 24.5 8.5 8.8 12.8 12.0 loans 5.6 6.3 7.8 8.7 6.7 10.9 11.1 10.5 NPLS to gross 77.8 71.3 89.5 57.2 59.6 65.1 79.4 84.7 59.5 66.1 Provisions to gross NPLS 103.1 96.5 Earnings and Profitability Cumulative since beginning of calendar year 1.7 2.6 2.1 1.0 1.4 1.5 1.1 0.8 Return on assets (ROA) 2.1 2.0 1.9 2.4 15.0 10.9 7.7 23.2 21.5 21.2 26.1 21.2 30.5 23.9 10.3 14.4 Return on equity (ROE) 51.1 51.6 51.4 45.6 53.5 49.5 53.2 61.6 61.0 59.8 61.6 64.1 Neti interesti income to gross income 60.5 58.5 72.3 65.0 65.2 70.9 74.0 Operating expenses to net profits 58.6 59.4 62.9 56.1 50.8 Efficiency 9.4 9.1 9.0 8.8 9.9 9.1 9.2 9.9 12.9 11.4 10.5 10.7 Interestrate spread 1/ Liquidity 48.5 47.8 48.2 47.5 47.4 48.4 48.7 48.5 48.0 48.3 49.3 Liquid assets to total assets 2/ 50.3 57.9 57.3 59.6 59.4 59.3 59.9 60.3 Liquid assets to deposits 2/ 61.8 59.6 58.8 58.4 58.7 D0 ollarization 50.5 55.9 58.1 54.0 54. 48.2 47.5 47.4 48.4 48.7 48.5 48.0 48.3 49.3 Liquid assets to total assets 2/ 50.3 57.9 57.3 59.6 59.4 59.3 59.9 60.3 Liquid assets to deposits 2/ 61.8 59.6 58.8 58.4 58.7 D0 ollarization 50.5 55.9 58.1 54.0 54. 1 53.5 56.5 58.1 Foreign currency loans to total loans (net) 44.9 47.2 47.7 52.2 68.5 68.8 66.5 66.3 66.9 67.3 71.7 72.7 69.5 68.7 67.7 Foreign currency deposits to total deposits 66.1 22.4 22.5 22.1 21.4 20.5 19.5 19.5 19.0 Foreign currency loans to foreign currency 20.9 21.6 22.0 22.8 deposits IMF staff calculations. These indica cators reflect the aggregated results oft the eightl licensed banks in operation in Haiti; thus figures in this table may Source: BRHI Banking System Financials Summary andl not exactly match the information in Table 4, which reflect the consolidated banking system. 1/ Defined as the difference between averagel lending rate and average fixed deposit rate in thel banking system. 2/L Liquida assets comprise cash and central bank bonds. 30 INTERNATIONAL MONETARY FUND --- Page 34 --- HAITI Figure 3. Haiti: Real Sector Developments, 2017-24 Real GDP has contracted for five consecutive years... 1 due to a drop in investment and net exports. Contribution to GDP Growth (Supply-side) Contribution to GDP Growth (Demand-side) (Percent) (Percent) Investment Net exports Private consumption J Public consumption Real GDP growth -1 D Other -2 Services -3 D Constructiad Manufacturing -4 Agriculture -5 -5 Taxes less subsidies on products -6 Real GDP growth 2017 2018 2019 2020 2021 2022 2023 -10 2017 2018 2019 2020 2021 2022 2023 Conjunctional indicators point to negative growth .in particular construction, manufacturing, and across all sectors... agriculture. Conjunctural Indicator of Economic Activity Conjunctural Indicator of Economic Activity (ICAE): Contribution to Growth (Percent, y/y) 8 (Percent, y/y) Primary sector Construction Secondary sector Overall ICAE Tertiary sector Agriculture y/y growth Manufacturing -2 H -4 -6 -8 -12 Inflation started to pick up again in 2024. The output gap has widened since 2017. Inflation Potential Growth and Unemployment (Percent) (Percent) Overall CPI (year-on-yeap Overall CPI (month-on-ndonth, right scale) Output gap (percent of potential) Unemployment rate -2 - 2017 2018 2019 2020 2021 2022 2023 Sources: Haitian Institute of Statistics and Informatics (IHSI), Bank of the Republic of Haiti, and IMF staff calculations. 1/ On a fiscal-year basis, ending on September 30. INTERNATIONAL MONETARY FUND 31 --- Page 35 --- HAITI Figure 4. Haiti: Fiscal Sector Developments, 2017-24 Tax revenues are extremely low. Spending has declined... Taxes Total Expenditure (Percent of GDP) (Percent of GDP) Taxes on income & profits DExcises 10 OCustoms duties mSales tax (TCA) Wages and salaries Goods and services DLocal taxes mOthe/Unclassified taxes 16 D Interest payments Transfers and subsidies Capital- domestic Total expenditure Capital foreign MONETARY FUND 31 --- Page 35 --- HAITI Figure 4. Haiti: Fiscal Sector Developments, 2017-24 Tax revenues are extremely low. Spending has declined... Taxes Total Expenditure (Percent of GDP) (Percent of GDP) Taxes on income & profits DExcises 10 OCustoms duties mSales tax (TCA) Wages and salaries Goods and services DLocal taxes mOthe/Unclassified taxes 16 D Interest payments Transfers and subsidies Capital- domestic Total expenditure Capital foreign BERREEE 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 The fiscal deficit fell in 2023 due to lower fuel .including social spending. subsidies... Social Spending Central Government Deficit With and a Share oft total expenditure 25 Without Energy Subsidies oln percento of GDP (rightaxis 1.6 (Percent of GDP) 20 O 1.6 1.2 15 1.2 A 08 10 04 5 a a a A a a A a a A a a a Subsidies to the energy sector A à 3 3 8 -2 Deficit excl. subsidy to the energy sector Ministry of Ministry of Ministry of Ministry of -3 Central government deficit Agriculture Education Public Social Health Affairs and Total 2017 2018 2019 2020 2021 2022 2023 Labor which reduced the need for monetization. Government debt declined in early 2024. Contribution to the Financing of the Fiscal Balance Central Government Debt (Percent of GDP) (Percent of GDP) MBRH financing Domestic External financing a Other domestic financing - - External Fiscal balance Total debt a -2 -3 mn 2018 2019 2020 2021 2022 2023 2024 Q1 Sources: Ministry of Finance, Reserve Bank of Haiti, and IMF staff calculations. Notes: Social spending for 2024 is through June. Central government debt data for Q1 2024 refers to calendar year. 32 INTERNATIONAL MONETARY FUND --- Page 36 --- HAITI Figure 5. Haiti: Monetary and Financial Sectors Developments, 2017-24 The BRH financing of the fiscal deficit has been .with net domestic assets declining. negative in FY2024 Net Domestic Assets (NDA) of the Central Bank Central Bank Financing to Government (Billions of gourdes) 250 - Liabilities to commercial banks 200 - - Net credit to the governm enti NDA -50 Tilhll IIl, BRH financing (cum since Oct. .1), billionlal" I -200 gourdes (right scale) -10 -250 Inflation (y/y), percent change -20 L 18 & S O 2 e a Monetary transmission has been weak, with market Private sector credit has collapsed since early 2023. rates not responding to policy rates Nominal Interest Rates Private Sector Credit (Percent) - In gourdes (percent of GDP) - In foreign exchange (percent of GDP) Total (percent ofG GDP) Total growth (y/y. rightscale) Short- -term interest rates (91 day ce entral bank bonds) -20 ending rate 0o 0 8 La N R 8 a - 10 o 8 8 2 S S e S 3 & 3 a & g $ S S 0 % FX deposits and loans have been stable since August While excess structural liquidity is rising in the 2020, after the central bank revalued the gourde.. banking system'. Structural Liquidity Excess of Banking System Dollarization (Billions of gourdes) (Percent) 0.6 Excess reserves 0.4 Reserve requirements Change in reserve req. ratio 0.2 Structural excess reserves Bond holdings 0.0 FX deposh -0.2 FX credits FX deposits (end Aug- -20 gourdes/US dollar) -0.4 FX credits (end Aug- 20 gourdes/US dollar) 0, after the central bank revalued the gourde.. banking system'. Structural Liquidity Excess of Banking System Dollarization (Billions of gourdes) (Percent) 0.6 Excess reserves 0.4 Reserve requirements Change in reserve req. ratio 0.2 Structural excess reserves Bond holdings 0.0 FX deposh -0.2 FX credits FX deposits (end Aug- -20 gourdes/US dollar) -0.4 FX credits (end Aug- 20 gourdes/US dollar) -0.6 -20 E 10 - - Sources: Bank of the Republic of Haiti and IMF staff calculations. 1/1 Excess reserves are reserves above requirement ratios on deposits; structural excess reserves include excess reserves plus other bank deposits at the BRH minus reserves banks obtain under BRH facilities. INTERNATIONAL MONETARY FUND 33 --- Page 37 --- HAITI Figure 6. Haiti: External Sector Developments, 2017-24 Remittances (in dollar terms) are above pre-pandemic Haiti continues to have structural trade deficits. trend. Exports and Imports Remittances (net) (Percent of GDP) 4,000 - L In percent of GDP In millions of US dollars (right scale) 3,500 3,000 2,500 2,000 -10 1,500 -20 1,000 Exports of goods -30 MA Imports of goods Trade balance -40 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 FDI has declined in recent years... .As have donor flows. Composition of Capital and Financial Account Official Assistance (Percent of GDP) Petrocaribe Project loans Grants C 400 In percent of GDP (right scale) S 300 of 2 in Jather items Net FDI - -2 Public sector capital flows (nèt E 100 Current account balance Capital and financial account balance 4 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 .And net international reserves jumped to almost US$1 The REER has greatly appreciated during 2023-24. billion. Real and Nominal Effective Exchange Rates International Reserves (Millions of US dollars) (Index) 3,500 GIR, months of imports (right scale) 8 NIR 3,000 NFA 2,500 2,000 account balance 4 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 .And net international reserves jumped to almost US$1 The REER has greatly appreciated during 2023-24. billion. Real and Nominal Effective Exchange Rates International Reserves (Millions of US dollars) (Index) 3,500 GIR, months of imports (right scale) 8 NIR 3,000 NFA 2,500 2,000 1,500 1,000 NEER REER a Sources: Bank of the Republic of Haiti and IMF staff calculations. Notes: REER=real effective exchange rate; NEER=nominal effective exchange rate; GIR=gross international reserves; NIR=net international reserves; NFA=net foreign assets. 34 INTERNATIONAL MONETARY FUND --- Page 38 --- HAITI Matrix Annex I. Risk Assessment Policy Response Impact Source and Relative Likelihood Global Risks High ST/MT Protect the vulnerable through High fiscal measures. Continue price volatility. Supply and Persistent inflationary targeted fuel subsidy reform to ensure Commodity fluctuations (e.9., due to conflicts, pressures. Eroding real the fiscal sustainability. demand restrictions and OPEC+ decisions) incomes. Worsening long-term export recurrent commodity price volatility, fiscal and external balances. cause and fiscal pressures, and food external in EMDES, cross-! -border spillovers, insecurity social and economici instability High ST/MT Protect the vulnerable through and Medium the fiscal measures. Monitor slowdown. Growth slowdown Lower remittances from targeted risks closely and strengthen Global growth including due to supply United States, creating large financial in major economies, monetary policy, rising adverse spillovers to the banking supervision. disruptions. tight or a deeper-than- broad economy. Worsening corporate bankruptcies. real estate sector contraction, with fiscal and external balances. envisaged through trade and financial adverse spillovers sudden stops in some channels, triggering High ST/MT through EMDES. Improve competitiveness High fragmentation. Cancellation of HOPE/HELP structural reforms. Deepening geoeconomict inward- -oriented policies and trade Lower FDI Broader conflicts cooperation resulti in preferences. weakenedi international of trade and FDI, inflows. a less efficient configuration protectionism, policy supply disruptions. technological and payments uncertainty, rising shipping and systems fragmentation. instability, a fracturing of input costs, financial systems, and lower international monetary High MT/LT donor financing to build ex growth. Medium Seek and financial Extreme climate events Lower long-term growth and ante structural and enhance post- disaster Climate change. cause loss of inflows. resilience driven by rising temperatures food insecurity, FDI response. life, damage to infrastructure. and supply disruptions, lower growth, transition to financial instability. A disorderly uncertainty net-zero emissions and regulatory and low investment. Domestic Risks with lead to stranded assets Continue to coordinate and closely intensify High ST/MT of development partners support to High Further displacements flow of request for international security and political people, restrictions to enhance security. Prioritize Worsening Interruptions or delays in the people and supply chain spending, Ensure instability. fuel government of the Multinational of (including financial institutions, full deployment Mission. Intensification disruption lower FDI inflows sound governance. including Security Support A delay in planned shortages), growth. strengthen timely and gang criminal activity. insecurity. and long-term AML/CFT publishing reassure markets elections due to persistenti accurate data to and donors. MONETARY FUND 35 INTERNATIONALI restrictions to enhance security. Prioritize Worsening Interruptions or delays in the people and supply chain spending, Ensure instability. fuel government of the Multinational of (including financial institutions, full deployment Mission. Intensification disruption lower FDI inflows sound governance. including Security Support A delay in planned shortages), growth. strengthen timely and gang criminal activity. insecurity. and long-term AML/CFT publishing reassure markets elections due to persistenti accurate data to and donors. MONETARY FUND 35 INTERNATIONALI --- Page 39 --- HAITI Policy Response Source and Relative Likelihood Impact Domestic Risks High High ST/MT Seek donor financing to build structural resilience and enhance Disruption in economic activity, Natural disasters. Hurricanes, lower FDI inflows and long-term post- disaster response. heavy rains, earthquakes, and growth. droughts. High High ST/MT Increase the health spending activities targeted at infectious diseases. Seek diseases. Depleted Disruption of economic international donor support for Infectious health infrastructure and lower long-term growth. resilience and addressing sanitation and Increased pressure on public health building leads to outbreaks of communicable emergencies. diseases (e.g., cholera, tuberculosis). system, Medium High ST/MT Intensify outreach to donors. international support. Persistence of insecurity, Increase international Insufficient and impediments to economic activity, on financing needs. Financial support is delayed and worsening of the humanitarian communication insufficient to address short-term crisis. Increased pressure on fiscal security and humanitarian needs, and to support the medium-term resources. reconstruction and institutional needs. 36 INTERNATIONAL MONETARY FUND --- Page 40 --- HAITI Appendix I. Letter of Intent Port-au-Prince, Haïti December 18, 2024 Kristalina Georgieva Managing Director International Monetary Fund Washington, D.C. 20431 Madam Managing Director: remains uncertain due to multiple internal and 1. Our country's macroeconomic outlook and security crises. In this contributed to exacerbating the food, humanitarian, external shocks which engagement of the International challenging context, we would like to stress the continuous to the IMF for providing with Haiti on multiple fronts. We are very grateful for Monetary Fund (IMF) Window of the Rapid Credit Facility in January 2023, financial support through the Food Shock and delivering unvaluable technical supporting the completion of the 2022 SMP, should help us identify successfully Diagnostic Report and its action plan assistance. The IMF Governance reforms going forward with the support of additional priorities for governance and anti-corruption of the 2024 Article IV We are also grateful for the Board completion development partners. consultation discussions, the first since 2019. our 2022 and 2023 SMPs, the While much progress has been made in implementing 2. 2024 has adversely affected the country's deteriorating security situation since February in place since its negotiation, we had macroeconomic performance. With the new government and to start a new SMP with the to let the 2023 SMP lapse, rather than extend it again, agreed anchoring new quantitative targets. FY2025 budget, have estimated to be negative for the sixth year running, revenues 3. Growth for FY2024 is social spending has also been partly fallen short of expectations, and our capacity to implement from the Food Shock Window undermined, as illustrated by lower than anticipated spending financing of the budget, and net Nonetheless, we were able to avoid monetary disbursement. international reserves were higher than envisaged. twelve-month Staff Monitored Program that this backdrop, we are requesting a new 4. Against during the last SMP to further strengthen will help lock in and deepen reforms implemented We hope that the new Staff Monitored economic resilience, governance, and social protection. assistance, in line with the IMF will also be supported with IMF capacity development in December 2025, will help Program States. The new program, ending strategy for Prgile/Contic-.Afected: capabilities, strengthen our fiscal and monetary further enhance our macroeconomic management track record basis that could pave the way for an frameworks, and allow us to establish a solid policy loan with the IMF. Upper Credit Tranche arrangement INTERNATIONAL MONETARY FUND 37 implemented We hope that the new Staff Monitored economic resilience, governance, and social protection. assistance, in line with the IMF will also be supported with IMF capacity development in December 2025, will help Program States. The new program, ending strategy for Prgile/Contic-.Afected: capabilities, strengthen our fiscal and monetary further enhance our macroeconomic management track record basis that could pave the way for an frameworks, and allow us to establish a solid policy loan with the IMF. Upper Credit Tranche arrangement INTERNATIONAL MONETARY FUND 37 --- Page 41 --- HAITI 5. The attached Memorandum of Economic and Financial Policies (MEFP) describes recent developments and presents the objectives and policies of our economic program. The policies set out in the attached MEFP are consistent with the objectives of our economic and social agenda. We are ready to take further measures as needed and will consult with IMF staff before undertaking any revisions to the policies set out in the MEFP, in line with IMF practice. We will refrain for the duration of the program from: (i) imposing or intensifying restrictions on the making of payments and transfers for current international transactions, (ii) introducing or modifying multiple currency bilateral that are inconsistent with Article VIII. We practices, or (ii) concluding payments agreements will inform IMF staff of any events or developments that may have an impact on the economic program in order to jointly examine the consequences and optimal measures to address them, without compromising the program's objectives. We will promptly provide the necessary data and information to enable IMF staff to monitor economic developments and the implementation of the policies set out in the program, in accordance with the attached Technical Memorandum of Understanding (TMU) or upon request. The Internal Audit Unit of the BRH will verify program monetary data as per the TMU at test dates and communicate the results to the Fund. We also give our consent to the IMF to publish the staff report on this SMP, this Letter of Intent, and its attachments. 6. Please accept, Madam Managing Director, the expression of our highest consideration. /s/ Js/ Alfred Fils Métellus Ronald Gabriel Minister of Economy and Finance Governor of the Bank of the Republic of Haiti 38 INTERNATIONAL MONETARY FUND of Understanding (TMU) or upon request. The Internal Audit Unit of the BRH will verify program monetary data as per the TMU at test dates and communicate the results to the Fund. We also give our consent to the IMF to publish the staff report on this SMP, this Letter of Intent, and its attachments. 6. Please accept, Madam Managing Director, the expression of our highest consideration. /s/ Js/ Alfred Fils Métellus Ronald Gabriel Minister of Economy and Finance Governor of the Bank of the Republic of Haiti 38 INTERNATIONAL MONETARY FUND --- Page 42 --- HAITI and Financial Policies of Economic Attachment I. Memorandum Framework A. Introduction and Macroeconomic and Financial Policies (MEFP) presents the 1. This Memorandum of Economic as well as the priorities and objectives macroeconomic framework underpinning our program, It reflects views shared by the and structural reforms we will pursue. of the economic policies best ways to: Haitian authorities and IMF staff on the accountability, and social protection; economic resilience, governance, Further strengthen for inclusive, sustainable economic Enhance economic stability and to lay the groundwork growth; living conditions for all Haitian citizens. Reduce poverty and improve driven mainly by our fragile security situation, have 2. Macroeconomic conditions, at -4.0 percent for FY2024, reflecting the challenging. Growth is estimated violence. It is remained exceptionally due to escalating gang collapse of the economy in March-May 2024, predominantly and reach 1.5 percent in the medium bounce back this year at 0.5 percent expected to moderately of structural reforms and an improved security term, on the back of continued implementation remained high at 27.9 percent in FY2024, mainly due situation. Annual inflation, although declining, conditions, despite the reduction in shock caused by deteriorating security ease this year and in the to the supply-side pressures should further monetary financing of the fiscal deficit. Inflationary account deficit for FY2024 is estimated is gradually curtailed. The current the medium term as insecurity of imports-due to of GDP, as a result of the sharp compression to narrow to percent remittances. Gross international reserves (GIR) slowdown in economic activity- and solid 2023 to US$2.5 billion (equivalent to increased from US$2.3 billion at end-September consequently 2024. 5.7 months of imports) at end-September accountability, and benchmarks: governance, transparency, B. Structural domestic revenue mobilization in the spending of emergency resources and accountability will 3. To ensure transparency households from the IMF Food Shock Window, we received for the most vulnerable recording, and publishing all expenditure monitoring, continue to carefully controlling, To this end, we will continue to publish comprehensive related to this emergency intervention. financed by the IMF Food Shock Window monthly reports on execution of fiscal expenditure according to the template provided by IMF account since its first disbursement by February 2025, after the end of each month (monthly and for future disbursements no later than 45 days to conduct staff; through the General Finance Inspectorate, structural benchmark). We will also continue, resources provided by the IMF Food audits of all ministries that use emergency and Administrative internal expenditure internal audits to the Superior Court of Audit Shock Window and to report these INTERNATIONAL MONETARY FUND 39 emergency intervention. financed by the IMF Food Shock Window monthly reports on execution of fiscal expenditure according to the template provided by IMF account since its first disbursement by February 2025, after the end of each month (monthly and for future disbursements no later than 45 days to conduct staff; through the General Finance Inspectorate, structural benchmark). We will also continue, resources provided by the IMF Food audits of all ministries that use emergency and Administrative internal expenditure internal audits to the Superior Court of Audit Shock Window and to report these INTERNATIONAL MONETARY FUND 39 --- Page 43 --- HAITI The CSCCA will also conduct the financial and Disputes (CSCCA) (quarterly structural benchmark). for fiscal years 2022-23 and audit of all RCF Food Shock Window spending operational compliance (March 2025 structural benchmark). 2023-24 and publish the report and published in November 2021 With technical assistance from the IMF, we adopted It includes the 4. requirements in government procurement. the decree governing transparency owners of successful bidders in all government requirements to publicly disclose the beneficial all public contracts, concessions. Since that time, we have regularly published are contracts and bidders. We will ensure that all provisions of this decree including information on successful structural benchmark) and will start preparing a implemented (end-December monthly continuous progress has been made in public comprehensive reform of the law on procurement. Significant of public expenditure, fiscal (PFM), particularly in improving the transparency we will financial management determined to sustain these efforts. Specifically, reporting, and accountability, and we are financial statements for the Economic and more detailed consolidated quarterly continue to provide international best practices in public financial Social Assistance Fund (FAES), in line with board of directors' meetings this includes regular reporting from the FAES's quarterly committed to publishing the management; continuous structural benchmark). We are (end-December quarterly action plan prepared by IMF staff and the Governance Diagnostic and an associated benchmark). report on into our reform agenda (end-February 2025 structural incorporate its recommendations monitoring mission on has conducted a targeted 5. The IMF Finance department de la République d'Haiti (BRH). This mission safeguards in early 2024 to support the Banque recommendations: and of 2019 safeguards for following up on implementation was essential related to central bank transparency and operations. shedding light on developments monitoring mission, we will enhance the from this safeguard Following the recommendations external audits for FY2023 (June 2025 structural transparency of the BRH by completing the management framework with sound benchmark). We will further align the Central Bank's reserves To this end, the BRH Board of arrangements and the principles of safety and liquidity. of the investment governance plan for improving the composition Directors will approve: (i) a medium-term investment policy, and (iv) an updated asset allocation, (ii) an updated portfolio, (ii) a new strategic with IMF staff (June 2025 structural benchmark). investment guideline, in close consultation the full balance sheet of the monetary data, including 6. The provision of more granular standardized reporting form and central bank in line with the internationally accepted the central bank will help enhance detailed information on government deposits with Internal Audit Unit of the BRH will also verify (monthly structural benchmark). The at test dates and transparency Technical Memorandum of Understanding program monetary data as per the the review. the results to the Fund before IMF Management approves communicate of digitalization to improve domestic revenue 7. We intend to harness the potential needs, with technical assistance from mobilization to meet the country's huge development administrative and technical cooperation To this end, we will: () have an the IMF FAD department. (DGI) and the customs administration and published between the tax administration protocol signed 40 INTERNATIONAL MONETARY FUND also verify (monthly structural benchmark). The at test dates and transparency Technical Memorandum of Understanding program monetary data as per the the review. the results to the Fund before IMF Management approves communicate of digitalization to improve domestic revenue 7. We intend to harness the potential needs, with technical assistance from mobilization to meet the country's huge development administrative and technical cooperation To this end, we will: () have an the IMF FAD department. (DGI) and the customs administration and published between the tax administration protocol signed 40 INTERNATIONAL MONETARY FUND --- Page 44 --- HAITI 2025 structural benchmark), and (ii) digitalize (AGD) for the interconnection of their IT systems (June 2025 structural benchmark). through all commercial banks (June tax declarations and payments C. Fiscal Policy and Social Protection in line with one of the main objectives of the SMP. 8. The FY2024 budget execution was budget to keeping the monetary financing in the execution of the FY2025 To We are committed in order to further reduce inflationary pressures. achieved in the previous fiscal year at zero to serve as the main of zero net credit to the government this end, we will adopt a strict ceiling target). We intend to maintain financing of the fiscal deficit (quantitative the BRH anchor to avoid monetary will also update the financing 'pact" between this policy stance over the medium term. We with this objective. We envisage to cover and the Ministry of Economy and Finance in accordance deepening local market and through domestic borrowing to help some financing requirements concessional external financing. environment, we are projecting an increase in tax 9. Despite the challenging economic 4.8 percent last year. This increase is of GDP this fiscal year, against reforms. revenue to 4.9 percent resulting from recent tax administration expected to be mainly driven by customs revenue and under control, while continuing to should remain moderate The increase in public spending financed by domestic resources targeted social spending. Current and capital expenditure FY2024. With the moderation in prioritize percent of GDP this year, compared with are expected to rise by 0.9 remain at zero this fiscal year. The FY2025 fiscal global oil prices, fuel subsidies are projected to financed mainly through external concessional forecasted at -0.1 percent of GDP, should deficit is therefore commercial banks. Public debt indicators improve borrowing and domestic borrowing from conducted at the time of the disbursement from the compared with the debt sustainability analysis fiscal deficits and the debt restructuring operation Shock Window, as a result of lower IMF staff and IMF Food budget we will inform promptly from Venezuela. Should we plan a supplementary and targets. with SMP objectives discuss with them to ensure compliance assistance to strengthen the capacity of our 10. We will continue to rely on IMF technical mobilization. Ongoing capacity development tax administrations to increase domestic revenue in custom valuation of administration is essential to address non-compliance to enhance custom from this support. We are also committed imports. We intend to implement the recommendations of the Tax Code, integrating the general tax out the roadmap for the implementation to carrying code with the and tax procedure code. reform is essential to ensure fiscal of the fuel subsidy 11. Effective implementation in view of the likely political and social repercussions, sustainability in the medium term. However, following the revision of the retail roll out of the reform. The next steps, and we envisage a gradual introduction of a simple mechanism for adjusting price-setting mechanism, will consist of the and the exchange rate, as well as the smoothing prices to variations in international oil prices sector and the strengthening framework for the petroleum products establishment of a regulatory INTERNATIONAL MONETARY FUND 41 code. reform is essential to ensure fiscal of the fuel subsidy 11. Effective implementation in view of the likely political and social repercussions, sustainability in the medium term. However, following the revision of the retail roll out of the reform. The next steps, and we envisage a gradual introduction of a simple mechanism for adjusting price-setting mechanism, will consist of the and the exchange rate, as well as the smoothing prices to variations in international oil prices sector and the strengthening framework for the petroleum products establishment of a regulatory INTERNATIONAL MONETARY FUND 41 --- Page 45 --- HAITI of the reform with a institutions. We will also accompany the implementation of related regulatory to foster its acceptance by the public. communication strategy designed social safety nets to alleviate widespread poverty 12. We are committed to strengthening by the country. We will therefore continue to following the multiple shocks recently endured aimed at improving living action plan to expand social programs implement the government and focusing on the most vulnerable groups (children, conditions and strengthening social inclusion, We also plan to increase cash transfers and women, disabled persons, and the elderly). provided hot pregnant households. We have launched school feeding programs, food rations for vulnerable restaurants, and we are planning to eliminate households through community the meals to vulnerable related to the emergency financing provided by some school fees. We will accelerate spending We will continue to monitor execution and Shock Window to support these efforts. the ministries IMF Food of Social Affairs and Labor (MAST) and targeting of social expenditure of the Ministry objective). of education, health, and agriculture (quantitative of prudent use of Haiti's SDR assets and 13. We remain committed to the principles This includes the publication on the reporting on Haiti's use of its SDR allocation. of the SDR allocation into transparent of Finance of any future conversions websites of the BRH or the Ministry institutional frameworks governing the fiscal use freely usable currencies. We intend to maintain the between the Ministry of Finance and the of the SDR allocation, including the repayment terms measures for SDR expenditure. central bank, as well as transparency Rate and Financial Policies D. Monetary, Exchange policy framework against a backdrop of 14. We will continue to strengthen our monetary short-term liquidity absorption operations to enhanced exchange rate flexibility. We will conduct pressures, and enhance monetary financing, reduce potential inflationary the eliminate any excess the reforms initiated by the BRH to develop public monetary policy transmission. We will sustain source of financing and a more the public Treasury with an alternative securities market to provide efficient monetary policy steering mechanism. exchange market to efforts to The BRH will limit its interventions in the foreign 15. rate fluctuations. Thus, we will: smooth excessive exchange international reserves (quantitative target); Adopt a floor on net interventions, such as well- designed mechanism for foreign exchange Establish an appropriate instead of the foreign exchange allocation system; weekly foreign exchange auctions market intervention rule; and Move forward with the ongoing work on a foreign exchange position (NOP) limits for commercial banks Complete the revision of net open 42 INTERNATIONAL MONETARY FUND to provide efficient monetary policy steering mechanism. exchange market to efforts to The BRH will limit its interventions in the foreign 15. rate fluctuations. Thus, we will: smooth excessive exchange international reserves (quantitative target); Adopt a floor on net interventions, such as well- designed mechanism for foreign exchange Establish an appropriate instead of the foreign exchange allocation system; weekly foreign exchange auctions market intervention rule; and Move forward with the ongoing work on a foreign exchange position (NOP) limits for commercial banks Complete the revision of net open 42 INTERNATIONAL MONETARY FUND --- Page 46 --- HAITI Department for promptly delivered a technical 16. We are grateful to the IMF's Statistics the reserve which will be the BRH compile for the first time template, not to assistance to help to reserve data. We undertake monthly. This should bring much transparency for current international published of payments and transfers restrictions on the making impose or intensify currency practices, or conclude bilateral payments transactions, or introduce or modify multiple that are inconsistent with Article VII. agreements and to increase financial will continue reforms to strengthen banking supervision 17. We inclusion in support of growth. For this purpose: risk-based banking supervision. We asked CARTAC to pursue the TA in order to implement texts on We of financial institutions and finalize outstanding will continue to monitor the soundness technical assistance from the World Bank to regulation. The BRH also benefits from banking microfinance institutions. strengthen its capacity to supervise Laundering and Combating the have started to upgrade our legal framework for Anti-Money IMF and We assistance from the Legal Department, Financing of Terrorism (AML/CFT) with technical Action Task Force (FATF). The revised standards of the Financial in line with the international will all regulations necessary to framework was adopted in April 2023. We promulgate take additional steps needed to exit decree on AML/CFT. We will continue to implement the new risk assessments which started in March 2024, the FATF grey list, including completing national regime for financial institutions and risk-based supervision implementing an AML/CFT and ensuring transparency of basic and non-financial businesses and professions, will risk based designated In particular, we strengthen beneficial ownership information on legal persons. of financial institutions, by March 2025. supervision E. Safeguards from the 2019 Safeguards We will continue to implement the recommendations Standards 18. the transition to International Financial Reporting Assessment. This includes finalizing of a medium-term plan to phase out the (IFRS) accounting standards and the development as well as the alignment of the asset involvement of the BRH in development finance activities, that a new safeguards with best practices. It is also our understanding with Haiti. allocation strategy of any subsequent IMF arrangement assessment must be completed prior to the approval F. Program Monitoring in connection with the Staff Monitored 19. We intend to take all necessary steps agreed A committee responsible for Program with the IMF (Tables 1 and 2 of this memorandum). from the Ministry of Economy and monitoring the program is in place; it includes representatives the participation of other sectors. It Finance and the BRH. If required, this committee may request and the Governor of the BRH with the Minister of Economy and Finance will meet at least quarterly of the Staff Monitored Program. Our program to give them a progress report on implementation INTERNATIONAL MONETARY FUND 43 --- Page 47 --- HAITI will be monitored with quantitative targets at end-December 2024 and end-June 2025, with indicative targets at end-March 2025 and end-September 2025 (Table 1), and structural benchmarks (Table 2). 20. We undertake to publish this Memorandum and the accompanying IMF Staff Report on the websites of the Ministry of Economy and Finance and the BRH as soon as the Staff Monitored Program is approved by IMF Management 44 INTERNATIONAL MONETARY FUND --- Page 48 --- HAITI Attachment I. Table 1. Haiti: Quantitative and Indicative Targets, December 2024September 2025 Cumulative flows from September 2024 Actual stock kat end-December 2024 end-March2025 end- -June 2025 end- September 2025 end- September 2024 Quantit Actual Indicative Actual Quantitativ Actual Indicative Actual target target target target L.Periodic Quantitative Targets 920 60 itored Program is approved by IMF Management 44 INTERNATIONAL MONETARY FUND --- Page 48 --- HAITI Attachment I. Table 1. Haiti: Quantitative and Indicative Targets, December 2024September 2025 Cumulative flows from September 2024 Actual stock kat end-December 2024 end-March2025 end- -June 2025 end- September 2025 end- September 2024 Quantit Actual Indicative Actual Quantitativ Actual Indicative Actual target target target target L.Periodic Quantitative Targets 920 60 Neti international reserves (NIR) oft the central bank (in millions ofUS. dollars)-floor' -239 -718 -958 Primary balan ofther nonfinancials public sector (NFPS, n millions ofgourdes)- floor 240,021 Net central bank credittothe nonfinancial public sector (in millions ofg gourdes)-ceiling' 245,097 Central government 5,076 Other nonfinanci cial public sector entities 11,000 29, 39,619 Budget allocations for social expenditure( in millions ofgourdes)- floor" ". .Continuous Quantitative Targets Accumulationofe domestic arrears byt the central government (in millions sof gourdes)- ceiling Ac cumulation ofe external arrears. byt the public sector (in millions ofl US dollars)-ceiling U.S. Contractingor guaranteeingbyt thep public sector of new essional extern nal debt(in millions ofu dollars)- -celling I. Indicative Target 40,000 90,000 ,000 200,000 Central goverr nment fiscal rev excluding gra nts (in millions of gourdes- floors Memorand ndum Items 9.200 Provision for undisbursed FY24 expenditures. (in millions of gourdes) Foods Shock Window esourc ces held the centralbank but not yet tra ansferredto the TSA (in millions of gourdes) 1,542 1,534 Undisbursedr resourd es receivedf from the IMF Catastrophe Contail and Relief Trust(CCRT, in millions of gourdes) Budgets support (in millions of US. dollars) 2,525 Gross interna national reserves (in millionsofu US dollars)" 5.7 Gross interna nationaln reserves( (in monthsofi imports.ofigoods and services ofthe followingyear) Souro rces: Minstry of Finance. Bank of theR Republic of Haiti (BRH), and IMF staff sti imates. 1/ The progr ram includes an asymmetrica adjustor on the floor for the NFPS primary balance and net international serves (NIR) for external budget supportb below the planned amounts. 2/ For program monitoringp purposes, thep program exchange rate for the period September2 2024 to June 2025is SDR 0.73 737261 per U.S. dollar (exchange rate sof September 30, 2024) The Quantitative Targeti ismetif ifthet total ismet. of nme ent liabilities related to: (payments for ettle ent ofFY24 expenses not yet disbursed by end. September 4/ Thes program includes adjustors toi increase then net credit to the NFPS target byt the amount drawdown central govern assets(e. centralbank relief under the CCRT. Thep includes an adjustor increase then net credit to the NFPS target by the 2024, outof provisioned funds and (i use ofr remaining resources from the 2023 Food Shocky Window andir resources releasedasaresulto of debtr programalsoi de changef FMI) amount of their increase incentral goverment liabilities (e. centralt bank assets) caused by exchangerate differencesi inthe centralbanka account 172160(Avance budget difference tothe MAST, Ministry of Education, Ministry Agriculture, and Ministry ofPublic Health. 5/ Budget envelope allocatedtos sociala affairs andl labor (MAST), education, agriculture and public health. The floor corresponds to the sumoftheb tallocations 6/ Includes domestic taxes on enterprises. personali income. and sales; and customs duties. INTERNATIONAL MONETARY FUND 45 alsoi de changef FMI) amount of their increase incentral goverment liabilities (e. centralt bank assets) caused by exchangerate differencesi inthe centralbanka account 172160(Avance budget difference tothe MAST, Ministry of Education, Ministry Agriculture, and Ministry ofPublic Health. 5/ Budget envelope allocatedtos sociala affairs andl labor (MAST), education, agriculture and public health. The floor corresponds to the sumoftheb tallocations 6/ Includes domestic taxes on enterprises. personali income. and sales; and customs duties. INTERNATIONAL MONETARY FUND 45 --- Page 49 --- HAITI Attachment I. Table 2. Haiti: Structural Benchmarks under the 2024 SMP Measure Governance, including Public Financial Management Purpose Target date Publish on the website of the Ministry of Economy and Finance (MEF) the Governance Diagnostic Report, including thea action plan therein. Enhance governance End- -February 2025 Publish, on the websites of thef National Commission for Public Procurement (CNMP) and the Ministry of Economy and Finance (MEF), all new public procurement contracts, including beneficial ownership 2 information (name and nationality of the beneficial owners) on contracts awarded to successful bidders, Increase transparency of public Monthly starting from within 45 days after the contract was awarded, starting from the monthly report for contracts awarded spending December 2024 in December 2024 for which publication is due by mid February 2025. Thel Ministry of Finance will publish, on the websites of the MEF and the General Directorate of the Budget (DGB), all monthly reports on execution of fiscal expenditure through Haiti Food Shock Window account since its first disbursement by February 2025; and for future disbursements no later than 45 Increase transparency of public Monthly starting from days after the end of the reference period, starting from the monthly fiscal expenditure report for spending December 2024 December 2024 for which the publication IS due by mid- February 2025). Through the General Finance Inspectorate, conduct and complete quarterly internal expenditure audits ofallr ministries involved in the use of the Haiti Food Shock Window account, and report these internal audits to the Superior Court of Accounts and Administrative Disputes (CSCCA), within three months Increase transparency of public Quarterly starting from endfrom the end of the reference period, starting from the quarter covering July- September 2024 for which spending December 2024 the report should be received by the CSCCA by December 2024. Have the CSCCA conduct a financial and operational compliance audit of all expenditure in connection witht the Rapid Credit Facility Food Shock Window for the 2022-23 and 2023/24 fiscal years and publish, Improve accountability and the audit report on the websites of the Superior Court of Auditors and Administrative Disputes (CSCCA), icrease transparency of public End March 2025 the MEF, and the General Directorate of the Budget (DGB). spending Publish on the web site of the Ministry of Economy and Finance (MEF) ( quarterly reports (with one quarter lag) on operations and financial status of the Economic and Social Assistance Fund (FAES), Increase of public including regular reports from its quarterly meetings of the board of directors, from the quarterly transparency Quarterly starting from endfor July- -September, for which publication IS duel by end- December 2024. report spending December 2024 Sign and publish on the MEF and DGB websites an adi ministrative and technical cooperation 7 between thel Directorate of General Taxes (DGI) and General Administration of Customs (AGD) protocol for the Strengthen domestic revenue inte erconnection of their IT systems. mobilization End June. 2025 8 Thel launch andi implementation of the digitalization of tax declarations and payments through all Strengthen domestic revenue commercial banks for the large taxpayers registered at the DGI. mobilization End- June 2025 Governance and safeguards Publish, on the BRH's web site, the BRH audit report and audited financial statements for FY2023 Enhance of (ending in September 2023) conducted by an independent international audit firm. Administration of Customs (AGD) protocol for the Strengthen domestic revenue inte erconnection of their IT systems. mobilization End June. 2025 8 Thel launch andi implementation of the digitalization of tax declarations and payments through all Strengthen domestic revenue commercial banks for the large taxpayers registered at the DGI. mobilization End- June 2025 Governance and safeguards Publish, on the BRH's web site, the BRH audit report and audited financial statements for FY2023 Enhance of (ending in September 2023) conducted by an independent international audit firm. Central Bank's transparency End- June 2025 operation Align the Central Bank's Approval by the BRH Board of Directors of: ()ar medium- term plan fori improving the composition of res serves management 10 the investment portfolio (ii) new strategic asset allocation, (ii) updated investment policy, and (iv) framework with sound updated investment guidelines, in close consultation with IMF staff. governance arrangements and End- June 2025 the principles of safety and Governance, data provision, transparency, and dissemination of economic data liquidity. Provide to IMF staff the full balance sheet of the central bank according to the internationally accepted standardized reporting form (SRF 1SR, with 1SR referring to the central bank) to also include detailed Monthly periodicity and two11 data on government deposit accounts, with two month lag from the end of the reference period, Strengthen transparency of month lag, starting to be starting from thel balance sheet for end- December 2024, which should be provided by end- February Central Bank's balance sheet provided to IMF staff by end2025. provision, transparency, and dissemination of economic data liquidity. Provide to IMF staff the full balance sheet of the central bank according to the internationally accepted standardized reporting form (SRF 1SR, with 1SR referring to the central bank) to also include detailed Monthly periodicity and two11 data on government deposit accounts, with two month lag from the end of the reference period, Strengthen transparency of month lag, starting to be starting from thel balance sheet for end- December 2024, which should be provided by end- February Central Bank's balance sheet provided to IMF staff by end2025. February 2025 46 INTERNATIONAL MONETARY FUND --- Page 50 --- HAITI Memorandum of Understanding Attachment II. Technical Staff-Monitored Program (SMP) ending under the 12-month 1. Haiti's performance targets (QTs) and structural December 2025 will be assessed based on quantitative (TMU) defines the QTs Memorandum of Understanding benchmarks (SBs). This Technical International Monetary Fund (IMF) for established by the Haitian authorities and the staff of the transmission of data that will It also defines the arrangements for the monitoring the program. permit staff to monitor program implementation. A. Definitions central government refers to the central Central Government. Unless otherwise indicated, central bank (BRH), 2. excludes local administrations (municipalities), the administration of Haiti and of an administrative, cultural, financial institutions, autonomous state organizations are financed and other public Central government expenditures by nature, and state-owned enterprises. or scientific donors, through, inter alia, foreign grants, taxes and other domestic levies and by foreign domestic and domestic and foreign public debt. ministerial accounts (comptes courants), include the Road Fund (Fonds d'entretien routier, FER) 3. Special funds and programs. These Free, and Compulsory Schooling Program mobilized to finance the Universal, the and the resources transfers. Under the Staff-Monitored Program, (PSUGO) for education, in addition to Treasury National Education Fund, FNE) will be levied to finance FER and PSUGO (through the resources recorded as central government revenues. state financial entity, Assistance Fund (FAES). FAES is an autonomous 4. Economic and Social and Finance. The mission of the FAES is under the supervision of the Ministry of Economy conditions of poor people currently projects aimed at improving the living to fund short-term, labor-intensive potential. It is responsible for implementing in urban and rural areas and increasing their productive donors. financed by the public Treasury and foreign social programs The BMPAD is Assistance Programs (BMPAD). 5. Office for Monetization of Development the of the Ministry of Economy organization under supervision state administrative loan concluded an autonomous the of grant and/or agreements and Finance. The BMPAD ensures implementation of the monetization of development and a donor or foreign lender, as part and from between the government finances and monitors approved programs projects aid programs in Haiti. In particular, it kind. by the monetization of aid in the funds generated and enterprise that produces, supplies, Electricité d'Hati (EDH). EDH is a state-owned include (i) CG transfers 6. EDH and the Central Government (CG) distributes electricity. Flows between consumption and not devolved to the through sales taxes collected on electricity favor of to EDH (including bills); (ii) the payment of letters of credit in CG, and the payment of fuel purchase bills unpaid by EDH; (ii) the payment of independent power producers to settle power generation which are the counterpart of EDH arrears producers for the purchase of fuel, bills from independent INTERNATIONAL MONETARY FUND 47 i) CG transfers 6. EDH and the Central Government (CG) distributes electricity. Flows between consumption and not devolved to the through sales taxes collected on electricity favor of to EDH (including bills); (ii) the payment of letters of credit in CG, and the payment of fuel purchase bills unpaid by EDH; (ii) the payment of independent power producers to settle power generation which are the counterpart of EDH arrears producers for the purchase of fuel, bills from independent INTERNATIONAL MONETARY FUND 47 --- Page 51 --- HAITI Program, transfers from central government bills. Under the Staff-Monitored and receivables are for unpaid generation "above the line," II while letters of credit financial are recorded under operations entered under the operations "below the line.' The NFPS includes the central government, special 7. Non-financial public sector (NFPS). autonomous state organizations of an and (defined in paragraph 3), other 4 and 5), funds programs including the FAES and the BMPAD (paragraphs administrative, cultural, or scientific nature, the National Old Age Insurance Office (ONA), 6), the Civil Service Pension Plan and EDH (paragraph and local governments. the nonfinancial public sector, state-owned 8. Public sector. The public sector comprises and the BRH. financial SOES (enterprises over 50 percent state-owned), banks, and nonbank received from Haiti's bilateral or multilateral grants. Budgetary grants are grants the World Bank, the 9. Budgetary Development Bank, (including the European Union, the Inter-American support purposes. partners and bilateral donors) for general or sector budget Caribbean Development Bank, Targets (QT) B. Quantitative will be monitored using the following indicators. 10. The implementation of the program in terms of cumulated flows from a reference Unless otherwise indicated, all QTs will be assessed in Table 1 of the fiscal year (end September), as specified date set at the end of the previous and Financial Policies. Memorandum on Economic of the program, all assets, liabilities, and flows 11. Program exchange rates. For the purposes will be valued "at the program exchange denominated in foreign currency (U.S. dollar excluded) that affect the government's budgetary defined below, with the exception of elements flows rates, as rates. Assets, liabilities, and accounts, which will be evaluated at current exchange used to measure net denominated in U.S. dollar will be valued in U.S. dollar, the currency to use the following of the program, it has been agreed international reserves. For the purposes reference rate as of September 30, 2024), USD exchange rates: HTG 132.0563 = USD 1 (BRH 30, 2024 published by the IMF and SDR 0.737261 = USD 1 (rates as at September 1.119600 1= EUR 1, rms mth.aspx. on its Cari2e Bank Credit to the Nonfinancial Public Sector Net Central sector is defined as the difference Net central bank credit to the nonfinancial public claims on the public 12. vis-à-vis the nonfinancial public sector (net between BRH assets and liabilities the net BRH credit to central government and sector) reported by the BRH to the IMF. This includes entities. The BRH liabilities toward the BRH credit vis-à-vis other nonfinancial public sector account of net assets in the BRH) also include a provisional central government (i.e., central government in FY 2024 but not yet disbursed by the endHTG 9.2 billion for government expenses contracted nonfinancial public sector is shown in The calculation of the net BRH credit to the September 2024. Table 1 as of September 30, 2024. 48 INTERNATIONAL MONETARY FUND ) reported by the BRH to the IMF. This includes entities. The BRH liabilities toward the BRH credit vis-à-vis other nonfinancial public sector account of net assets in the BRH) also include a provisional central government (i.e., central government in FY 2024 but not yet disbursed by the endHTG 9.2 billion for government expenses contracted nonfinancial public sector is shown in The calculation of the net BRH credit to the September 2024. Table 1 as of September 30, 2024. 48 INTERNATIONAL MONETARY FUND --- Page 52 --- HAITI 13. Adjustors to net central bank credit to the NFPS. To prevent unwarranted constraints on NFPS spending, the indicator of net central bank credit to the NFPS will be subject to the following adjustors: (i) The net credit to the NFPS target will be adjusted upward by the amount of disbursements made after September 30, 2024 related to central government expenses contracted in FY 2024, up to the provisioned amount of HTG 9.2 billion, shown in "other gourde liabilities to central government" in Table 1. (ii) The net credit to the NFPS target will be adjusted upward by the amount of disbursements made after September 30, 2024 of remaining resources related to the support from the 2023 Food Shock Window (FSW) and the debt relief from the Catastrophe Containment and Relief Trust (CCRT). The FSW resources held in the central bank, but not yet transferred to the Treasury Single Account, and the remaining CCRT resources are shown under "FX other deposits of central government in Table 1. (ii) The net credit to the NFPS target will be adjusted upward by the amount of the increase in central government liabilities (ie., central bank assets) caused by exchange rate differences in the central bank account 172160 ("Avance difference de change FMI"), which is part of the calculation line "loans and advances to the central government" in Table 1. INTERNATIONAL MONETARY FUND 49 --- Page 53 --- HAITI Attachment II. Table 1. Haiti: Components of Net Central Bank Credit to the NFPS (In millions of gourdes) September 2024 Net central bank credit to the nonfinancial public sector 240,020.92 Net credit on central government 245,097.04 Claims on central government 349,591.17 Holdings of government debt securities 221,360.50 Loans and advances to the central government 128,230.67 Other claims on central government 0.00 Liabilities to central government 104,494.13 Gourde demand deposits of central government 63,710.19 Gourde other deposits of central government 1,230.63 Gourde loans from central government (Public treasury fiduciary in FIDEICOMMI) 126.40 Gourde settlement accounts from central government (Bail) 13.95 Other gourde liabilities to central government 9,200.00 FX demand deposits of central government 27,021.88 FX other deposits of central government 3,076.21 FX trade credit liabilities to central government (Notes to pay AID) 114.88 Other FX liabilities to central Government 0.00 Net claims on other nonfinancial public sector entities 5,076.12 Claims on other nonfinancial public sector entities 0.00 Claims on state and local government 0.00 Claims on public nonfinancial corporations 0.00 Liabilities to other nonfinancial public sector entities 5,076.12 Demand deposits of state & local governments (Gourde) 234.14 Demand deposits of public nonfinancial corporations (Gourde) 527.60 Demand deposits of state & local governments (FX) 0.00 Demand deposits of public nonfinancial corporations (FX) 0.00 Other deposits of state & local governments (Gourde) 0.00 Other deposits of public nonfinancial corporations (Gourde) 4,314.37 Other deposits of state & local governments (FX) 0.00 Other deposits of public nonfinancial corporations (FX) 0.00 Other monetary liabilities to state and local governments 0.00 Other monetary liabilities to public nonfinancial corporations 0.00 Nonmonetary liabilities to state and local governments 0.00 Nonmonetary liabilities to state and local governments 0.00 50 INTERNATIONAL MONETARY FUND ) 0.00 Other deposits of state & local governments (Gourde) 0.00 Other deposits of public nonfinancial corporations (Gourde) 4,314.37 Other deposits of state & local governments (FX) 0.00 Other deposits of public nonfinancial corporations (FX) 0.00 Other monetary liabilities to state and local governments 0.00 Other monetary liabilities to public nonfinancial corporations 0.00 Nonmonetary liabilities to state and local governments 0.00 Nonmonetary liabilities to state and local governments 0.00 50 INTERNATIONAL MONETARY FUND --- Page 54 --- HAITI Net International Reserves central bank are those external assets that are international reserves of the 14. The gross authorities 1 for meeting balance of payments readily available to and controlled by monetary affect the exchange rate, and for other needs, for intervening in exchange markets to the and serving as a financing confidence in the currency and economy related purposes such as maintaining assets and assets that exist. All borrowing. Reserve assets must be foreign currency encumbered. The basis for foreign as collateral are excluded if contingent assets and foreign currency assets pledged Standardized Report Forms 1SR or 2SR must international reserves reported by the BRH from liquid external assets, gross international reserves include monetary gold, conform to this definition. Gross and IMF reserve position. For program including holdings of Special Drawing Rights (SDRs), based on data from the IMF of SDRs and IMF reserve position will be calculated purposes, holdings Finance Department. reserves (illustrated in Table 2 below) are 15. For program purposes, net international central bank, minus: the international reserves of the defined as gross denominated in foreign currency to non-residents), related liabilities (i.e., liabilities certified checks in reserves contracted by the central bank, (ii) such as: (i) short-term loans (lines of credit) data from the IMF Finance Department? (ii) all Haiti liabilities to the IMF, based on U.S. dollars, central bank liabilities to residents, such as: (i) domestic foreign currency denominated the BRH (sight deposits in US dollars and euro, deposits of commercial banks at liabilities to foreign currency transfer), (ii) other foreign currency denominated including from BCM and the CAM base, (ii) foreign currency demand deposits corporations included in monetary transactions other depository commitments related to foreign currency swap of other financial corporations, (iv) with domestic financial institutions; currency special accounts, (ii) foreign liabilities in foreign currency, such as: () foreign other bank off-balance sheet foreign currency liabilities. currency project accounts, (ii) central notions of 'availability for use' and 'control' by the monetary 1 Underlying the concept of reserve assets are the and authorities. See Balance of Payments Manual, -S Guidelines for a Data Template, Note on Program Design and Conditionality -MM 2 As described in the Operational Guidance programs, all 544122, Box 8): "For establishing and should monitoring be deducted Fund-supported from reserve assets to measure Deignand-copnemwener of their maturity, B outstanding IMF credit and loans, regardless NIR for program purposes." INTERNATIONAL MONETARY FUND 51 availability for use' and 'control' by the monetary 1 Underlying the concept of reserve assets are the and authorities. See Balance of Payments Manual, -S Guidelines for a Data Template, Note on Program Design and Conditionality -MM 2 As described in the Operational Guidance programs, all 544122, Box 8): "For establishing and should monitoring be deducted Fund-supported from reserve assets to measure Deignand-copnemwener of their maturity, B outstanding IMF credit and loans, regardless NIR for program purposes." INTERNATIONAL MONETARY FUND 51 --- Page 55 --- HAITI Attachment II. Table 2. Haiti: Calculation of Program Net International Reserves (In millions of U.S. dollars) September 2024 A. Gross International Reserves 2,525.2 153.1 Monetary gold 37.5 Holdings of foreign currency 444.2 Demand deposits abroad 1,769.3 Investments abroad 93.2 SDR holdings 1/ 27.9 Reserve Position in the Fund 1/ 306.6 B. Reserve Related Liabilities 245.1 Liabilities to the IMF 1/ 2/ 60.2 Short-term loans from private non-residents 1.3 Liabilities to IFls 0.3 Certified checks in FX C. Liabilities to Residents Denominated in Foreign Currency 1,263.4 Financial sector FX deposits in the central bank 1,231.0 32.4 Swaps with financial institutions 35.2 D. Other Liabilities Denominated in Foreign Currency 15.0 Off-balance sheet FX liabilities 20.2 Project accounts 0.1 Special accounts E. Net International Reserves, 2024 SMP definition (A - B- C-I D) 919.9 Memorandum Items (not included in program NIR calculation) Miscellaneous central bank FX liabilities (including values for adjustment) 25.0 Central government FX deposits in the central bank 228.9 Short-term central government FX liabilities (next 12 months) 24.8 Sources: BRH, IFS, and IMF staff calculations. 1/ Based on IMF books. For the purposes of the 2024 SMP, between December 2024 and September 2025, the amounts in SDR will be converted to U.S. dollars using the exchange rate as of September 30, 2024 (1 USD - 0.737261 SDR). 2/ For program purposes, all outstanding Haiti liabilities to the IMF are considered, including the January 2023 Rapid Credit Facility (Food Shock Window), disbursed at a government account in the BRH, for an amount of SDR 81.9 million. 16. If budgetary grants are lower than expected the floor on net international reserves will be downwards the amount of the difference in question. Conversely, the floor will not be adjusted by adjusted upwards by the amount of budgetary grants exceeding the expected levels mentioned in Table 3. 52 INTERNATIONAL MONETARY FUND 737261 SDR). 2/ For program purposes, all outstanding Haiti liabilities to the IMF are considered, including the January 2023 Rapid Credit Facility (Food Shock Window), disbursed at a government account in the BRH, for an amount of SDR 81.9 million. 16. If budgetary grants are lower than expected the floor on net international reserves will be downwards the amount of the difference in question. Conversely, the floor will not be adjusted by adjusted upwards by the amount of budgetary grants exceeding the expected levels mentioned in Table 3. 52 INTERNATIONAL MONETARY FUND --- Page 56 --- HAITI Attachment II. Table 3. Haiti: Projected Budgetary Grants (In millions of US dollars) Cumulative Flows since end-September 2024 June 2025 September September 2024 March 2025 Balance of the Nonfinancial Public Sector Primary accepted by the of the central government refer to expenditure services. 17. Domestic arrears the delivery of the corresponding goods and Treasury and unpaid after 90 days, despite include off-budget government arrears of central government do not unpaid Domestic commitments. refer to liabilities incurred outside off-budget central government commitments rise to contingent 18. Unpaid other bodies), which may give process (from ministries or public the budgetary claims against central government resources. sector (NFPS) corresponds to the sum financing of the nonfinancial public 19. Net domestic bank credit to the NFPS; (ii) net credit from domestic of the following elements: (i) net central Report Form 2SR), which includes commercial banks to the NFPS (as reported in the Standardized bills and other NFPS securities to changes in NFPS deposits and the net issuance of Treasury which includes the net issuance of commercial banks; and (iii) net nonbank credit to the NFPS, the change in the net position of bills and other NFPS securities to nonbank institutions, and the net Treasury independent power producers), the NFPS vis-à-vis the electricity sector (including credit and domestic arrears of central government. change in suppliers' to the sum public sector (NFPS) corresponds Net external financing of the nonfinancial in external 20. (excluding IMF loans) and (ii) the net change of (i) new external loan disbursements arrears minus external loan amortizations. balance of the nonfinancial public sector 21. For the purposes of the program, the primary domestic financing of the NFPS and net corresponds to the sum of the following: net debt. If budgetary (NFPS) interest payments on public external financing of the NFPS, after deducting balance of the NFPS includes an reach the levels, the floor on the primary the floors grants do not expected of budgetary support are in deficit, asymmetric adjustor. More specifically, if the amounts those deficits. Conversely, if external balance will be reduced by the amount of on the primary the floor on the primary balance will not change. budget support exceeds projections, Budget Allocations to Social Expenditure i.e., the authority to incur obligations, The budget decree gives ministries appropriations, (as 22. the fiscal year up to a specified amount for specified purposes which become due during For the of the program, the social decree) within the fiscal year. purposes Labor (MAST), indicated in the budget allocated to Ministry of Social Affairs and spending is defined as the budget envelope INTERNATIONAL MONETARY FUND 53 by the amount of on the primary the floor on the primary balance will not change. budget support exceeds projections, Budget Allocations to Social Expenditure i.e., the authority to incur obligations, The budget decree gives ministries appropriations, (as 22. the fiscal year up to a specified amount for specified purposes which become due during For the of the program, the social decree) within the fiscal year. purposes Labor (MAST), indicated in the budget allocated to Ministry of Social Affairs and spending is defined as the budget envelope INTERNATIONAL MONETARY FUND 53 --- Page 57 --- HAITI of Public Health, in the budget decree. Ministry of Agriculture, and Ministry Ministry of Education, of Social to the sum of the budget allocations to the Ministry 23. The floor on the QT applies of Agriculture, and Ministry of Public Affairs and Labor (MAST), Ministry of Education, Ministry for QTs and end-March for ITs. ie, end-December and end-June Health, as executed at end-month, that get under way before the actual budget Provisional appropriations, i.e., expenditure appropriation, if any, will be included. External Debt by the Public Sector of Non-Concessional New Contracting or Guaranteeing of debt is set in paragraph 8 of the Guidelines on Public 24. Definition of debt. The definition Decision No. 16919-(20/103) of the in Fund Arrangements, adopted by "debt" will be Debt Conditionality For the purpose of these guidelines, the term Executive Board (October 28, 2020). liability, created under a contractual arrangement understood to mean a current, i.e., not contingent, currency) or services, and which the provision of value in the form of assets (including assets currency) or through in the form of (including requires the obligor to make one or more payments will discharge the principal and/or interest services, at some future point(s) in time; these payments number of forms, the primary ones being as incurred under the contract. Debts can take a liabilities follows: by the lender made on the basis of an i. loans, ie, advances of money to the obligor future (including deposits, bonds, that the obligor will repay the funds in the of assets that undertaking loans and buyers' credits) and temporary exchanges debentures, commercial under which the obligor is required to repay the to fully collateralized loans the future are equivalent the collateral from the buyer in funds, and usually pay interest, by repurchasing and official swap arrangements); (such as repurchase agreements the obligor to defer payments credits, i.e., contracts where the supplier permits are and ii. suppliers' which the goods are delivered or services provided; until sometime after the date on which the lessee has the right to under which property is provided total ii. leases, ie., arrangements of time that are usually shorter than the use for one or more specified period(s) retains the title to the property. For the expected service life of the property, while the lessor of the lease) of all lease the debt is the PV (at the inception purpose of these guidelines, of the agreement excluding those expected to be made during the period payments repair, or maintenance of the property. payments that cover the operation, public sector debt covers public and 25. For the purposes of this debt limit ceiling, 8 of this TMU. debt. Public sector is defined in paragraph publicly guaranteed sector. For the purposes of the program, a debt guarantee 26. Debt guarantees by the public to service a debt in the event of non-payment by the public sector means an explicit legal obligation return for payment in cash or in kind). by the borrower (in 54 INTERNATIONAL MONETARY FUND those expected to be made during the period payments repair, or maintenance of the property. payments that cover the operation, public sector debt covers public and 25. For the purposes of this debt limit ceiling, 8 of this TMU. debt. Public sector is defined in paragraph publicly guaranteed sector. For the purposes of the program, a debt guarantee 26. Debt guarantees by the public to service a debt in the event of non-payment by the public sector means an explicit legal obligation return for payment in cash or in kind). by the borrower (in 54 INTERNATIONAL MONETARY FUND --- Page 58 --- HAITI debt is concessional if it includes a grant element For program purposes, a between 27. Concessionality. the element of a debt is the difference of at least 35 percent, calculated as follows: grant as a percentage of the nominal value value (PV) of debt and its nominal value, expressed the future the present the time of its contracting is calculated by discounting of the debt. The PV of debt at For debts with a grant element equal or stream of payments of debt service due on this debt.3 the debt. The discount rate used for this the PV will be set equal to the nominal value of No. 15248below zero, of 5 set forth in Executive Board Decision is the unified discount rate percent purpose (13/97). of new of the ceiling on the contracting or guaranteeing 28. External debt. For the purposes debt contracted or guaranteed by the public non-concessional external debt, external debt is any in foreign currency, i.e., terms with non-residents or denominated the sector on non-concessional where applicable, debt issued domestically by other than Haiti's currency. It includes, currency government and held by non-residents. undertakes not to contract or guarantee any new non-concessional a 29. The public sector by the public sector that constitutes external debt. It also applies to any private debt guaranteed (with a maturity of less than one year) liability. Excluded from the ceiling are short-term the IMF, non-resident purchases contingent borrowing from import-related credits, rescheduling arrangements, bills that are indexed to the exchange rate. This of treasury bills, and gourde-denominatedl BRH the authorities and any non-observance will target will be monitored continuously by quantitative be immediately reported to the Fund. Public Sector External Arrears Accumulation sector. They include all debt-service obligations Arrears on external debt of the public that are due to non30. or guaranteed by the public sector (principal and interest) on loans contracted loan contract; they exclude those arising residents but not paid on the due date as set out in the and (or) those that are litigious. For the being renegotiated with external creditors external debt arrears from obligations on the non-accumulation of new purpose of assessing the quantitative target of debt service due to international by the public sector, arrears resulting from non-payment from the previous definition. This preventing payments to the creditor are excluded non-observance will sanctions continuously by the authorities and any quantitative target will be monitored be immediately reported to the Fund. all aspects of the debt agreement, including maturity, grace 3The calculation of concessionality takes into account and management fees. period, payment schedule, upfront commissions, element of a wide range of financial packages is available at: 4A tool to calculate the grant tonuimeaisdiesedicocdes INTERNATIONAL MONETARY FUND 55 sector, arrears resulting from non-payment from the previous definition. This preventing payments to the creditor are excluded non-observance will sanctions continuously by the authorities and any quantitative target will be monitored be immediately reported to the Fund. all aspects of the debt agreement, including maturity, grace 3The calculation of concessionality takes into account and management fees. period, payment schedule, upfront commissions, element of a wide range of financial packages is available at: 4A tool to calculate the grant tonuimeaisdiesedicocdes INTERNATIONAL MONETARY FUND 55 --- Page 59 --- HAITI Domestic Arrears Accumulation of the Central Government 31. Arrears on domestic debt of the central government. They include all debt-service obligations (principal and interest) on loans contracted or guaranteed by the central government that are due to residents but not paid 90 days after the due date set out in the loan contract. The quantitative target on domestic arrears accumulation, will be monitored continuously by the authorities and any non-observance will be immediately report to the Fund. C. Reporting of Data for the Monitoring of the Program 32. In order to facilitate monitoring of the program, the government will provide IMF staff with the information set out in the following summary table. Any data revisions will be promptly communicated to IMF staff. 33. The authorities will inform IMF staff in writing at least 10 working days (excluding public holidays in Haiti) before any change in economic and financial policies that may affect the outcome of the program. Such policies include, for example, changes in tax or customs legislation, wage policy, and support for public or private enterprises. With respect to continuous QTs, the authorities will report any non-observance to the IMF promptly. 56 INTERNATIONAL MONETARY FUND --- Page 60 --- HAITI Attachment II. Table 4. Haiti: Summary of Data to be Provided Sector Data Series Periodicity Timeliness Real Sector National accounts Annual Three months Quarterly economic indicators (economic cycle) Quarterly Two months Consumer price index (including breakdowns) Monthly Three weeks Public Finances Fiscal revenues (internal, external, other) Monthly Four weeks Expenditures on Cash Basis (wages and salaries, goods and services, external debt, current accounts) Monthly Four weeks Table of government financial transactions (TOFE) Monthly Two weeks Balance on current accounts and operation of projects Monthly One month Table Underlying TOFE, which enables the determination of checks in circulation and balance Monthly One month on investment project accounts Table on budget implementation with breakdown by ministry and other bodies and by type of Monthly One month expenditure Total monthly amount of expenditure executed by transfer letters Monthly One month Report on Revenue Collection of DGI (progress report) Monthly One month Tables of revenue collection of AGD (port activity indicators, analytical report of customs receipts on Monthly One month import) Table of revenue collected and authorized expenditure (TEREDA) Monthly One month Detailed revenue and expenditures of BMPAD Quarterly One month Report on social protection expenditures Quarterly One month Table on the implementation of the PSUGO program Quarterly One month Dashboard of the state electricity utility EDH showing monthly information on the production of electricity, making explicit the composition of Monthly One month production by independent electricity producers, EDH, and by region. EDH commercial data allowing the calculation of EDH's billing and collection rates Monthly One week EDH cash data including all revenues and all expenditures (operating, investment, and other) Monthly One month Information on any off-budget claims presented for payment Monthly One month INTERNATIONAL MONETARY FUND 57 PSUGO program Quarterly One month Dashboard of the state electricity utility EDH showing monthly information on the production of electricity, making explicit the composition of Monthly One month production by independent electricity producers, EDH, and by region. EDH commercial data allowing the calculation of EDH's billing and collection rates Monthly One week EDH cash data including all revenues and all expenditures (operating, investment, and other) Monthly One month Information on any off-budget claims presented for payment Monthly One month INTERNATIONAL MONETARY FUND 57 --- Page 61 --- HAITI Attachment II. Table 4. Haiti: Summary of Data to be Provided (Continued) Stock of unpaid off-budget central government liabilities Monthly One month Data on all fuel shipments per product giving the CIF import price, the full price structure (including stabilization margin) and import and consumption Monthly One week quantities. Data on actual collections for each month with a breakdown per product and tax type. Table of import prices of petroleum products, by arrival Monthly One month Table of imported quantities of petroleum products Monthly One month "Stabilization margin" table of the Directorate of the Tax Inspectorate Monthly One month "Petroleum product tax" table of the Directorate of the Tax Inspectorate Monthly One month Details of the stock of all government borrowing and debt securities (interest rate, maturity, creditor if Annual Three months known) Full amortization table of domestic and external government debt Annual Three months Statement of stocks and flows of repayment of suppliers' credits and payment arrears Monthly One week Expenditures made for Food Shock Window program-related expenses Monthly One month Monetary and Financial Data Exchange rate Daily One day Monetary base and sources thereof and currency in circulation. Weekly One week Aide Memoire Table containing, inter alia: (i) stock of BRH bonds; (ii) deposits at commercial banks; (ii) credit to private sector (in gourdes and U.S. dollars); (iv) details of inflows and outflows of foreign exchange reserves, including budget support received; (v) volume of foreign exchange Monthly One week transactions, including BRH sales and purchases; (vi) gross and net international reserves; (vii) net BRH credit to central government and the non-financial public sector; and stocks and interest rates of BRH bills. Tables showing, inter alia, the average and weighted interest rates on gourde and U.S. dollardenominated deposits and credit, and the excess Monthly One month reserves in the banking system. 58 INTERNATIONAL MONETARY FUND --- Page 62 --- HAITI Attachment II. Table 4. Haiti: Summary of Data to be Provided (Concluded) Monetary and financial statistics. Standardized reporting form, balance sheets of the Central Bank Monthly One month and other depository corporations. Detailed balance sheet of the central bank (table de passage) with individual account granularity. Monthly One month Information on the composition of gross and net international reserves (Reserve template when Monthly One month available). Banking supervision statistics and commercial indicators on commercial banks. Quarterly One month The calendar and planned placements of BRH gourde-denominated dollar-indexed bills, including Quarterly One month in banks and nonbanks. Audited financial statements of the BRH Annual Three months Balance of Payments and IIP Balance of payments (first version) Quarterly Six weeks Revised balance of payments Quarterly Three months after the first reporting BRH FX cash flow table; quarterly projections through end of fiscal year. Quarterly One month International Investment Position (IIP) Annual Three months External Debt External debt report prepared by the BRH showing monthly disbursements; debt service, debt forgiveness and rescheduling, arrears, and debt Monthly One month stocks. Details of any external public debt and debt guaranteed by the State Monthly One month Data on stocks, accumulation, and repayment of external arrears Monthly Six weeks Table of complete amortization of external debt Annual Three months INTERNATIONAL MONETARY FUND 59