WASHINGTON, CMC -The International Monetary Fund (IMF) says risks to Haiti’s outlook remain tilted to the downside and that intensified gang-related disruptions, and escalating violence or social unrest could further exacerbate social and economic vulnerabilities.
In addition, the Washington-based financial institution is warning that potential shifts in foreign immigration and trade policies could sharply reduce exports and remittance inflows. It said these developments could compound the adverse impact of the security crisis on domestic production, worsen the humanitarian and economic crisis, and increase fiscal pressures.
But on the upside, the IMF said that the United Nations Security Council’s authorisation to transition the Kenya-led Multinational Security Support (MSS) mission in Haiti for a new multinational Gang Suppression Force (GSF), supported by the newly established United Nations Support Office for Haiti and the Organization of American States, “could mark a turning point in efforts to restore security in the country, rebuild institutions, and lay the foundations for economic growth and improved prospects for the Haitian people”.
The senior economist in the Regional Studies Division of the IMF’s Western Hemisphere Department, Camilo E. Tovar, led a virtual mission to Haiti, to assess progress under the country’s Staff-Monitored Program (SMP), which are informal agreements between country authorities and the IMF to monitor the implementation of the authorities’ economic programme and build a track record of policy implementation that could pave the way for financial assistance from the IMF’s upper credit tranche (UCT).
Haiti’s SMP is tailored to Haiti’s context of acute security challenges, institutional fragility, and capacity constraints. It supports the authorities’ economic policy priorities, including stabilizing the economy, strengthening governance, and reinforcing the social safety net. Engagement with the authorities will continue over the coming weeks.
But Tovar said that economic conditions in the French-speaking Caribbean Community (CARICOM) countries remain fragile amid persistent domestic and external shocks and rising uncertainty.
He said the economy has contracted for a seventh consecutive year. Inflation remains high at around 32 per cent year-on-year.
The banking sector continues to show vulnerabilities, with the nonperforming loan ratio above 13 percent in June 2025, although the system’s capital adequacy ratio (22 percent) exceeds the regulatory minimum of 12 percent.
“Remittance inflows have continued to increase. This reflects increased financial support from migrants to their families due to worsening security conditions, and possibly in anticipation of changes in international migration policies. These inflows have strengthened the current account balance, which is projected to record a moderate surplus in the financial year 2025.”
Tovar said that the gross international reserves remain adequate, at over US$3.1 billion, or about seven months of prospective imports, as of end-July 2025. The nominal exchange rate remains stable, leading to genuine exchange rate appreciation.
“Fiscal policy continues to be constrained by security challenges, institutional weaknesses, and limited policy space. The fiscal position was broadly balanced in the financial year 2025, reflecting improved nominal revenue collection and low spending execution, despite persistent security conditions and institutional fragilities.
“Social spending rose by about 34 per cent, supported by the 2023 IMF’s Food Shock Window under the IMF’s Rapid Credit Facility. Public debt is projected at 12.4 per cent of GDP by the end of the financial year 2025, the lowest in the Latin America and Caribbean region,” he added.
The IMF said that program implementation is encouraging. All quantitative and indicative targets for the end-June test date have been met. Monetary financing of the fiscal deficit has been maintained at zero, social spending reached the program’s targets, and revenue performance stayed on track.
“International reserves continue to accumulate, supported by strong remittances. Net international reserves reached US$1.5 billion by the end of July 2025, supported by strong remittance inflows and foreign exchange purchases. The reform agenda, covering governance, public financial management, safeguards, and data provision, continues to advance, albeit with delays in some areas.”
The IMF said that the SMP will continue to emphasize the following priorities, namely advancing governance reforms to overcome fragility.
It said reform efforts should be coordinated and anchored in the Governance Diagnostic Report, including enhancing transparency and accountability in public financial management; mitigating corruption risks in revenue administration; and ensuring accountability for serious corruption, organized crime, and money laundering.
The Haitian authorities are being encouraged to complete the national assessment for money laundering and terrorist financing, and to continue addressing other gaps in the anti-money laundering/combating the financing of terrorism (AML/CFT) framework to support Haiti’s exit from the Financial Action Task Force (FATF) grey list.
The Washington-based financial institution stated that, regarding revenue mobilization and improving budget execution, immediate priorities include operationalizing automated monthly data exchanges between the tax and customs systems and completing the rollout of tax declaration and payment services for all large taxpayers across all commercial banks.
It said strengthening budget execution, especially for social and security spending, is essential to adequately support vulnerable populations and advance critical infrastructure and development needs.
“This requires improved treasury cash management and adequate project appraisal and budget prioritization, in line with the 2022 IMF Public Investment Management Assessment,” the IMF said, noting that in strengthening the central bank’s policy frameworks, monetary policy credibility has improved with the elimination of monetary financing of the budget deficit.
“For the second consecutive year, monetary financing has been held at zero, helping contain inflation and reinforcing the credibility of the Bank of the Republic of Haiti (BRH). Moreover, the relative stability of the nominal exchange rate is providing the economy with a nominal anchor. “Given the challenging and uncertain environment, foreign exchange interventions should remain focused on preserving exchange rate stability and supporting the accumulation of international reserves.”
The Haitian authorities are also being encouraged to continue the annual on-site inspection program, enhance off-site supervision, integrate the risk assessment grid framework into the BRH’s supervisory architecture, and finalize the new chart of accounts for financial institutions.
But the IMF acknowledges that despite the authorities’ continued efforts, Haiti requires international financial support to meet its urgent and significant development needs.
“To safeguard debt sustainability and consolidate progress achieved under the SMP, this support should be provided in the form of grants rather than non-concessional loans.
“Grant financing would help address the country’s immediate humanitarian, social, and economic needs, and place the economy on a steady and sustainable medium- and long-term growth path, which is essential for improving living conditions for the Haitian people,” it added.
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