Management of the International Monetary Fund (IMF) announced its approval of the first review of Haiti's Staff-Monitored Program (SMP) on April 15, 2025. SMPs are agreements that allow the IMF to monitor and evaluate the implementation of economic policies by a country's authorities. This initiative could lead to financial assistance from the IMF under the Upper Credit Tranche.
Haiti is currently facing a complex crisis with significant uncertainties. Both global and local challenges have heightened its vulnerability since the SMP was negotiated. There are risks related to increasing insecurity that might further limit economic activity, reform implementation, and the attraction of aid and investments. The ongoing security situation affects growth prospects and inflation, making security restoration a national priority.
Despite these challenges, Haiti's authorities remain committed to the SMP and have been able to mitigate the impact of certain economic shocks. The country's net international reserves stood at over US$1.1 billion by the end of December 2024. The Ministry of Finance and the Bank of the Republic of Haiti have continuously worked to address macroeconomic imbalances with the help of a high-level Program Monitoring Committee engaged with IMF staff.
The SMP's implementation has been satisfactory so far, with all quantitative targets achieved. Six out of seven structural benchmarks were met, with the last expected by June. The program signals the government's dedication to macroeconomic stabilization and improved governance.
A crucial government objective is to mobilize revenue to address Haiti's development needs and enhance targeted expenditures. Strengthening social safety nets is essential to mitigate the impact of economic shocks. The authorities' previous spending commitments, particularly using Food Shock Window resources, require auditing under the SMP.
The zero monetary financing commitment for the deficit by fiscal and monetary authorities is notable and should be maintained. The financial audit of the Bank of the Republic of Haiti is urgent, with publication expected by August 2025 to promote transparency.
Improving governance remains crucial for Haiti to overcome fragility and maintain macroeconomic stability. The publication of the Governance Diagnostic Report and action plan serves as a reform guide and requires support from the IMF and development partners.
Haiti's strategy to bolster economic resilience depends heavily on international financial support. Assistance in the form of grants is necessary to achieve sustainable quality spending. The government should refrain from non-concessional loans to align with SMP commitments, as such loans could jeopardize debt sustainability.
The IMF staff will continue collaborating with Haiti's development partners for governance and capacity development, consistent with the Fund Strategy for Fragile and Conflict-Affected States.