PORT AU PRINCE, Haiti – The Bank of the Republic of Haiti (BRH) says economic activity in the French-speaking Caribbean Community (CARICOM) country has been marked by the deterioration of the business climate due to the deterioration of security conditions and prolonged periods of scarcity of fuel.
The central bank said that the outlook for the Haitian economy in 2022 remains mixed. (ANNE MYRIAM BOLIVAR, GPJ HAITI)In its review of the first quarter of the 2021-22 fiscal year, October to December 2021, the BRH said that “this situation affected the production of goods and services and further reinforced the wait-and-see posture of economic agents”.
The BRH, which is the country’s central bank, said in the 14-page report that the agricultural sector has suffered from security conditions that have once again interrupted local supply chains, fueling the negative expectations of economic growth.
“The impact of supply shocks both locally and in the international market has resulted in an increase in consumer prices. On a monthly basis, inflation has largely exceeded the historic one per cent mark, standing at 4.6 per cent and 4.7 per cent respectively in October and November 2021.
“On a year-on-year basis, the inflation rate has increased sharply….reaching 24.6 per cent in November 2021”.
The BRH said that imports amounted to US$293.78 million, down by 5.69 per cent compared to July 2021, while exports increased by 25.68 per cent compared to July to reach US$130.72 million.
The central bank said that the outlook for the Haitian economy in 2022 remains mixed.
It said the exchange rate and inflation will depend, beyond external shocks, on the improvement of the business climate.
“The continued increase in commodities on the international market risks increasing Haiti’s import bill and amplifying inflationary pressures. These could be exacerbated, internally, by the deterioration of security conditions, which may restrict market supply conditions across the country.
“However, the implementation of a realistic budget and the search for better coordination between fiscal and monetary policies through the rigorous monitoring of an economic and financial governance pact, should limit the monetary effect in feeding inflationary pressures.
“Similarly, the commitment and actions of public authorities to improve the macroeconomic framework should lay the groundwork for discussion and the signing of an agreement with the International Monetary Fund (IMF).”
The BRH said that such an agreement “would make it possible to limit recourse to monetary financing and thus facilitate the stabilization of the exchange rate as well as the attenuation of the residual effects of the adjustment of prices at the pump on consumer prices”.
