Haiti Request for Disbursement Under the Rapid Credit Facility - Press Release; Staff Report; and Statement by the Executive Director for Haiti

Haiti faced a major economic shock in 2020 with the COVID-19 pandemic, coming after two years of political instability and social unrest that had already weakened the economy. The country experienced protracted political crisis from mid-2018 to early 2020, with Parliament dissolved and the President ruling by decree since January 2020. Almost 4 million people were living with food insecurity before the pandemic hit.

The COVID-19 pandemic significantly worsened Haiti's economic outlook through multiple channels. Remittances, which represent over 34% of GDP, were expected to drop sharply due to the global economic downturn. Textile exports to the US were projected to decline by $178 million, while foreign direct investment was also expected to fall. The fiscal situation deteriorated with additional health and social expenditures needed while revenues declined.

The IMF approved emergency financing of SDR 81.9 million ($111.6 million, equivalent to 50% of quota) under the Rapid Credit Facility to help address these challenges. The funding aimed to cover balance of payments needs stemming from the pandemic and create fiscal space for essential health expenditures, income support to workers, and cash transfers to households. The authorities committed to implementing policies for macroeconomic stability and planned to begin discussions for a Staff Monitored Program.

The support was critical given Haiti's limited healthcare services and high poverty levels, making the country particularly vulnerable to the pandemic's impact. The financing was intended to help the government pay salaries of teachers and workers, provide food rations and cash transfers to households, and support the transport and sanitation sectors during the crisis.