In its note on monetary policy for the 3rd fiscal quarter of 2018-2019 (April-May-June), the Bank of the Republic of Haiti (BRH) underlines that the national economy "[...] suffered from the degradation of the business climate caused by repeated socio-political unrest [...] This situation has had a significant negative impact on investment in general and the tourism sector in particular, in terms of reducing the flow of foreign currency, the hotel occupancy rate and the number of jobs in the sector. [...] At the same time, the drought recorded in several agricultural regions of the country was unfavorable to the spring harvest [...]

[...] the negative impact of this situation on the local supply of goods and services and the difficulties of supplying the markets, have resulted in an increase in inflationary pressures, which have been amplified by the depreciation of the Gourde compared to to the US dollar. Thus, the annual inflation rate stood at 18.6% in June https://www.haitilibre.com/en/news-28299-haiti-flash-inflation-out-of-control-flies-to-186.html [...]

[...] in the first six months of the year, the trade deficit was US $ 1.59 billion, down 7.3% from the same period of the year prior. This decline in the trade deficit is due to the combined effect of lower imports and higher exports. For the period under review, the value of imports declined from 2.21% to $ 2.15 billion, while exports increased by 15.7% to $ 561.7 million.

In addition, for the first 7 months of the year, transfers received from abroad increased by 6.72% over the previous year to reach US $ 1.48 billion. The supply of foreign exchange fueled mainly by transfers has not been able to offset the increase in the demand for precaution and speculation induced by uncertainties related to the socio-political climate. As of June 28, 2019, the benchmark exchange rate reached the level of 93.0256 gourdes per US dollar, an increase of 12.6¨% over the end of March 2019.

[...] With regard to public finances, the State's financial situation has deteriorated considerably because of the socio-political troubles that prevailed during the quarter. Indeed, the paralysis of economic activities in most cities of the country for about two weeks and the difficulties of the perception organizations (DGI https://www.haitilibre.com/en/news-28057-haiti-strike-truce-at-the-dgi-tax-collection-will-finally-resume.html and Customs https://www.haitilibre.com/en/news-27567-haiti-flash-the-mci-strike-and-the-closure-of-port-lafiteau-seriously-threaten-the-textile-industry.html ) to operate normally have resulted in falling tax revenues. For the 3rd quarter, tax revenue was 16.1 billion gourdes, down 16.4% compared to the previous quarter. Similarly, cumulative revenue for the full year amounted to 54.8 billion as at 24 June 2019, a collection rate approaching 55% compared to 63.7% for the same period last year.

Expenditure [...] amounted to 24.45 billion gourdes, down 5.5% from the previous quarter [...] The combined change in revenue and expenditure in the third quarter led to a deficit of 8.1 billion gourdes, which resulted in monetary financing of 4.14 billion gourdes. It should be noted that the absence of a ratified Government and budget, which caused delays in the approval of the financial program with the IMF, has reduced the prospects for disbursement of external budget support during the current fiscal year.

[...] The outlook for the Haitian economy remains mixed. The deterioration of the business climate and its impact on production and marketing channels could continue to negatively affect economic activity. As for agricultural production, it should suffer from a poor performance of spring harvests given the persistence of the water deficit. In addition, the socio-political situation may negatively impact the period July-September considered a flagship season for tourism and foreign exchange earnings. At the same time, it is likely to maintain uncertainties about investment decisions. On the other hand, the fact that fiscal support has not been disbursed, on which the tax authorities counted, poses the risk of a deterioration of the monetary situation with adverse repercussions on the evolution of prices in the economy.

Download the complete BRH note for the 3rd fiscal quarter 2018-2019 (PDF in French) : https://www.haitilibre.com/docs/note_polmon3t19.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 :

https://www.haitilibre.com/en/news-28291-haiti-economy-customs-revenue-down.html

https://www.haitilibre.com/en/news-28057-haiti-strike-truce-at-the-dgi-tax-collection-will-finally-resume.html

https://www.haitilibre.com/en/news-27487-haiti-economy-note-from-the-brh-on-economic-activity-2nd-quarter-2018-2019.html

https://www.haitilibre.com/en/news-27567-haiti-flash-the-mci-strike-and-the-closure-of-port-lafiteau-seriously-threaten-the-textile-industry.html

https://www.haitilibre.com/en/news-26844-haiti-flash-the-state-signs-a-new-pact-of-economic-governance-with-the-brh.html

HL/ HaitiLibre