The Bank of the Republic of Haiti (BRH) has released its quarterly note on the Monetary Policy for the third quarter of the 2015-2016 fiscal year (April to June 2016), which analyzes recent developments observed in the Haitian economy. Its purpose is to inform the public of the direction of monetary policy, to report the latest decisions and identify short-term outlook for the national economy.

Extract from the note of the BRH :

According to estimates specialized services of the BRH "[...] The economic growth should continue to slowto settle below 1%. This reduction was founded largely on the assumption of the weakness of global demand, observed mainly through the decline in public investment spending. Indeed, they have suffered the negative impact of the drastic reduction of PetroCaribe Fund (due to the oil price collapse) and the reduction of external assistance in budget support since 2014 [and its removal since the establishment of a transitional government]. Added to this, the cash management which should limit the scope of the government's public expenditure assuming that seasonal factors are unfavorable to a good performance of tax revenues in the last quarter of the year 2015- 2016.

However, the situation should improve for inflation as we approach the end of the year. The inflation rate is expected to be in end of year at a level close but less than 12%, due to the systematic recovery of excess liquidity through BRH bonds and the gradual erosion of the base effect characterizing the evolution of the index of Consumer Prices.

It is true that political uncertainty may generate additional pressures on the foreign exchange market, but the BRH is ready to use all instruments at its disposal to contain, within the limits of its mandate and control field, the repercussions of the exchange rate to inflation and other monetary impacts. In addition, the increase of private unrequited transfers and the materialization of seasonal effects associated with the summer period could result in an increase in currency supply with Haitian returning home for the patron saint festival. This could thus mitigate exchange pressures.

Furthermore, agriculture and livestock would benefit from a greater level of funding as a result of decisions taken by the Haitian monetary authorities to stimulate investment in this sector [...]"

Download the full report of the BRH (PDF): https://www.haitilibre.com/docs/note_polmon3t16.pdf (in french)

HL/ HaitiLibre