Haiti - FLASH : State loans to the BRH jump from 9.6 to 18.8 billion in 3 months - HaitiLibre.com : Haiti news 7/7

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Haiti - FLASH : State loans to the BRH jump from 9.6 to 18.8 billion in 3 months
10/10/2018 08:53:18

Haiti - FLASH : State loans to the BRH jump from 9.6 to 18.8 billion in 3 months
During the last quarter of the fiscal year 2017-2018, the macroeconomic situation was marked on the national level, by the inflationary pressures and the reinforcement of the depreciation of the gourde following the increase of the liquidity in Gourdes, consecutive to the increase in the state's financing needs and the uncertainties arising from the July social and political unrest. These disturbances and drought have particularly impeded economic activity in the tertiary and agricultural sectors respectively.

Government financing needs are steadily increasing due to lower revenues and higher public spending. To cope with this situation, which has persisted since the beginning of the fiscal year 2017-2017, the State borrowed from the BRH in the first quarter 5.8 billion gourdes https://www.haitilibre.com/en/news-24181-haiti-economy-strong-increase-in-public-spending-compared-to-revenue.html , loan totaling $ 8.9 billion in the second quarter to $ 9.9 billion in the third quarter https://www.haitilibre.com/en/news-25053-haiti-economy-mixed-economic-outlook-according-to-the-brh.html and almost double the last fiscal quarter or 18.8 billion Gourdes...

Extracts from the BRH Note 4th quarter of fiscal year 2017-2018 :

"[...] At the domestic level, an increase in inflationary pressures has been observed thanks to the increase in monetary financing , the depreciation of the Gourde [...] Annual inflation s is 14.15% in August https://www.haitilibre.com/en/news-25632-haiti-economy-inflation-passes-the-bar-of-14.html against 13% in June. On a monthly basis, price growth was 1.40% in August after a peak of 1.46% in July. For the month of September, the forecasts of the Directorate of Currency and Economic Analysis of the BRH are based on inflation of 14.4% year-on-year.

During the fourth quarter of the 2017-2018 fiscal year, the evolution of the real sector was characterized by three major trends. The sharp slowdown in the tertiary sector, following the riots from 6 to 8 July 2018, a relative decline in agricultural production due to a drier summer than usual, an increase in exports after the decline observed in the previous quarter due to strikes recorded on the occasion of wage demands.


Over the first six months of the year, the trade balance shows a deficit of US $ 1.82 billion, an increase of 47.49% over the same period last year. This worsening of the trade deficit is mainly due to a larger increase in imports than that of exports over the six months as a whole [...]

Transfers received from abroad increased 20.41% in the first eight months of the year compared to the same period last year and reached US $ 1.59 billion. Despite the currency supply generated by the rise in the level of transfers, exchange rate pressures continued. As a result, as of 21 September 2018, the reference rate1 was 69.71 gourdes, an increase of 4.18% compared to 29 June.

As of September 27, 2018, the state of public finances is characterized, on the one hand, by a fall in public revenue and, on the other hand, by an increase in public expenditure. [...]

As regards the cumulative revenue from October 2017 to 14 September 2018, they reached 78 billion (78 669.48 MG) or 84.19% compared to the revenues provided for in the amending budget 2017-2018. Cumulative public expenditure from October 2017 to 14 September 2018 totaled more than 112 billion (112,607.72)

The increase in expenditures combined with the decline in government revenue has led to an increase in the government's financing requirements, mainly provided by the BRH. This resulted in monetary financing at September 27, 2018 of more than 18 billion (18,860,980) against more than 9,6 billion (9,666.69) the previous quarter.


Perspectives :
The forecasts of the BRH provide the continued upward growth in annual inflation in the first quarter of fiscal 2018-2019. On a year-on-year basis, the inflation rate should be 14.4% in September, 14.8% in October and 14.7% in November.

GDP growth could be between 1% and 1.5% for the 2017-2018 fiscal year, mainly because of the "relatively weak performance of the agricultural sector and the deterioration of the business climate resulting from socio-political unrest" The BRH points out that "this situation is likely to reinforce the agents' negative expectations, which could affect the exchange rate. However, the pressure on the foreign exchange market should decrease as the entry into office of the new government could reduce uncertainties [...]"

Download the full BRH note (PDF) : https://www.haitilibre.com/docs/note_polmon4t18.pdf

The Note on Monetary Policy of the Bank of the Republic of Haiti (BRH) analyzes recent developments in the Haitian economy. Its purpose is to provide information on the direction of monetary policy and the latest decisions taken by the authorities to identify short-term prospects for the national economy.

See also :

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