Management of the International Monetary Fund (IMF) approved the first review of Haiti’s Staff-Monitored Program (SMP). SMPs are arrangements between country authorities and the IMF to monitor the implementation of the authorities’ economic program and to establish a track record of policy implementation that could pave the way for financial assistance from the Fund under the Upper Credit Tranche (UCT). SMPs do not require approval by the IMF's Executive Board.

Haiti faces a multidimensional crisis with a challenging outlook which is highly uncertain. The country is affected by both global and country-specific shocks, which have worsened its fragility, since the negotiation of the SMP. Risks to the outlook are tilted to the downside and include worsening insecurity that would constrain further activity and the ability to implement reforms and attract aid and the foreign direct investment. The supply-side shock caused by the security crisis will continue to suppress growth and feed inflation unless the security outlook improves. Therefore, restoration of security is the priority.

Despite domestic and global difficulties, the authorities are firmly committed to implement this SMP and have managed to contain the impact of the various shocks, thereby averting even worse economic outcomes. Net international reserves were valued at over US$1.1 billion at the end of December 2024. Despite the political transition and insecurity both the Ministry of Finance and the Bank of the Republic of Haiti (the Central Bank) have remained continuously engaged. They have consistently attempted to adopt feasible measures to limit macroeconomic imbalances and have been able to demonstrate full ownership and support for the SMP through the high-level Program Monitoring Committee which meets with IMF staff on a continuous basis.

Implementation under the SMP has been broadly satisfactory and its objectives remain achievable. All quantitative targets have been met, with a comfortable margin. Of the seven structural benchmarks assessed under this review, six were implemented and one is expected to be met by June (due to constraints related to insecurity).

The SMP is an important anchor for signaling the authorities’ commitment to continue making progress toward macroeconomic stabilization and strengthen governance, and locking in macroeconomic gains accumulated over recent years, despite the many headwinds.

An urgent government priority is re-starting the mobilization of revenue to support the country’s massive development needs and boost well-targeted spending. The measures under the SMP should help achieve these goals. Continued strengthening of the social safety net is essential to cushion the impact of the shocks on the population and alleviate widespread poverty. The spending commitments previously indicated by the authorities using Food Shock Window resources should be audited in line with SMP commitments.

The fiscal and monetary authorities’ commitment to keeping monetary financing of the deficit at zero is commendable and should continue. The FY2023 financial audit of the BRH is urgent and its eventual publication by August 2025 would be important for demonstrating transparency.

In addition to addressing insecurity, advancing governance reforms is paramount to help Haiti exit from fragility, ensure macroeconomic stability and build trust with the private sector and development partners. In this vein, the authorities’ publication of the Governance Diagnostic Report and action plan is commendable. The report should provide a road map for reforms to enhance governance and will require capacity development support not only from the Fund but also from development partners.

A government-led strategy to continue to strengthen the economy’s resilience to multiple shocks requires the financial support of the international community. This assistance is indispensable to allow quality spending, over the short, medium, and long term. Without it, Haiti will continue to suffer large import compression. External assistance should take the form of grants. The authorities should avoid contracting non-concessional loans, to ensure consistency with the SMP commitments. Non-concessional loans would not only be against SMP commitment. It would also undermine debt sustainability.

In line with the Fund Strategy for Fragile and Conflict-Affected States, IMF staff will also continue to coordinate closely with Haiti’s main development partners, particularly on governance and capacity development.

HL/ HaitiLibre