Haiti Second Review Under the Staff-Monitored Program - Press Release and Staff Report

© 2023 International Monetary Fund IMF Country Report No. 23/230 HAITI SECOND REVIEW UNDER THE STAFF-MONITORED PROGRAM—PRESS RELEASE; AND STAFF REPORT In the context of the First Review Under the Staff-Monitored Program (SMP), the following documents have been released and are included in the package: • A Press Release • The Staff Report prepared by a staff team of the IMF for the Executive Board’s information following discussions that ended on April 28, 2023, with the officials of Haiti on economic developments and policies underpinning the First Review Under the Staff-Monitored Program. Based on information available at the time of these discussions, the staff report was completed on May 31, 2023. The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents. Copies of this report are available to the public from International Monetary Fund • Publication Services PO Box 92780 • Washington, D.C. 20090 Telephone: (202) 623-7430 • Fax: (202) 623-7201 E-mail: publications@imf.org Web: http://www.imf.org Price: $18.00 per printed copy International Monetary Fund Washington, D.C. June 2023 PR23/213 IMF Management Completes the Second Review of the Staff Monitored-Program with Haiti FOR IMMEDIATE RELEASE Staff Monitored Programs (SMPs) are informal arrangements between national authorities and IMF staff to monitor the authorities’ economic program. As such, they do not entail endorsement by the IMF Executive Board. SMP Staff reports are issued to the Board for information • Management of the International Monetary Fund (IMF) approved on May 30, 2023 the second and final review of Haiti’s Staff -Monitored Program (SMP). The SMP has helped the government restore macroeconomic stability and strengthen governance and fiscal transparency. • The SMP has played an important role in advancing decisive governance reforms to enhance accountability through stronger public finance management, revenue administration, data provision, and anti-corruption measures. • The program has been designed to take into account Haiti’s fragility and capacity constraints and has helped the authorities build a track record of policy implementation. Washington, DC – June 15, 2023: Management of the International Monetary Fund (IMF) approved on May 30, 2023 the Second and Final review of the Staff-Monitored Program (SMP) which started in June 2022. The SMP was designed to support the authorities’ economic policy objectives and build a track record of reform implementation. In line with the Fund’s Strategy for Fragile and Conflict-Affected States, staff also coordinated closely with Haiti’s main development partners. Haiti faces a challenging macroeconomic outlook amid a humanitarian crisis. The country has been hit hard by economic spillovers from Russia’s invasion of Ukraine, with food price inflation triggering a hunger crisis. This global shock has been compounded by a dire security situation, which has heightened the economy’s fragility, hampered activity, and generated supply-side bottlenecks which have further fueled inflation. External shocks and the volatility of the security situation have resulted in a macroeconomic environment that has been worse than had been envisaged at the time of the program’s approval by IMF management in June 2022. Despite the more challenging domestic and external environment, the authorities have adopted important policy reforms, anchored by the SMP, and displayed a firm commitment throughout. The reforms cover governance and anti-corruption, tax and revenue administration, public finance management (including budget preparation and execution), central bank autonomy and governance, and anti -money laundering. Data provision has also improved during the course of the program. All these reforms have enhanced transparency 2 in public spending and in the financial sector and helped maintain macroeconomic stability. Despite the delicate political situation, thanks to a highly inclusive consultative process, the authorities have taken the necessary ownership and earned public support for the SMP through the high- level Program Monitoring Committee. The Haitian authorities had adopted a budget for FY2023 that is consistent with agreed targets under the SMP and in the context of a medium- term fiscal framework. Implementation of the budget has been to date consistent with the objective of the SMP of reducing monetary financing of the budget deficit to levels that staff assesses to be non- inflationary. The authorities are striving to ensure that a meaningful budget allocation is used to protect the most vulnerable and are implementing public financial management systems to monitor the use of public funds. In line with the reforms under the SMP, the authorities also took measures aimed at strengthening revenue administration and boosting revenue mobilization over time. These include the approval of a new tax code and tax procedures code, publication of all codes and tariffs related to customs, adoption of unique Tax Identification Numbers (TINs), publication of the TIN database and of the file of active taxpayers, and stronger oversight of the revenue agency since August 2022. Notably, the new tax code—a primer in the country’s history— entails the rationalization and simplification of the personal income tax and corporate income tax, including through the broadening of the tax base and elimination of many exemptions. Thanks mainly to an improvement of revenue administration, customs revenue has reached a historic high in recent months, although from a low base. There has been significant progress on governance issues, and corruption and broader financial integrity risks need to continue to be effectively addressed. The authorities have taken measures to strengthen accountability in the use of public resources and have boosted the transparency of public procurement for emergency resources. The recent finalization of revisions to the Central Bank and to the AML/CFT legal frameworks are also critical for improving governance and transparency. They have also recently made a formal request for a Fund Governance Diagnostic, which is a very welcome development. The Haitian authorities have expressed interest in another SMP, which should help maintain macroeconomic stability and lock in and sustain recent approved reforms to further enhance economic resilience and governance. HAITI SECOND REVIEW UNDER THE STAFF-MONITORED PROGRAM EXECUTIVE SUMMARY Context. Haiti faces a challenging macroeconomic outlook amid a humanitarian crisis. The country has been hit hard by economic spillovers from Russia’s invasion of Ukraine, with food price inflation triggering a hunger crisis. This global shock has been compounded by a dire security situation, which has heightened the economy’s fragility, hampered activity, and generated supply-side bottlenecks which have further fueled inflation. Risks to the outlook are tilted to the downside. Program implementation. The implementation under the SMP has been broadly satisfactory. Despite domestic and global difficulties, the authorities have adopted important policy reforms, anchored by the SMP, and displayed a firm commitment throughout. The reforms cover governance and anti-corruption, tax and revenue administration, public finance management, including budget preparation and execution, and central bank independence. Data has also improved. All these have enhanced much-needed transparency in public spending and in the financial sector and helped maintain macroeconomic stability. Despite the delicate political landscape, and thanks to a highly inclusive consultative process, the authorities have taken the necessary ownership and earned public support for the SMP through the high-level Program Monitoring Committee (Comité de Suivi). The authorities met three of the four end-December 2022 periodic quantitative targets (QTs) and the indicative targets (IT) for end-December. They missed the end-December QT floor on budget allocation to the Ministry of Social Affairs and Labor (MAST) for social expenditure. The authorities also met four of the five ITs for end-March 2023 and missed by a narrow margin the IT floor on central government revenues, which was revised up at the time of the first review. The authorities also met the three continuous QTs—non-accumulation of both domestic and external arrears and no new contracting or guaranteeing by the public sector of non-concessional external debt. Despite some delays, all structural benchmarks were achieved. The two end-March 2023 structural benchmarks were not met but implemented with delay in April. The end-April 2023 structural benchmark and the monthly and quarterly structural benchmarks were all met. Next steps. The authorities have expressed interest in another SMP, which should help lock in and sustain recent approved reforms to further enhance economic resilience and governance. The new SMP will continue to be supported by Fund capacity development assistance. In line with the Fund Strategy for Fragile and Conflict-Affected States, staff will also continue to coordinate closely with Haiti’s main development partners. May 31, 2023 HAITI 2 INTERNATIONAL MONETARY FUND Approved By Patricia Alonso-Gamo and Peter Dohlman Discussions took place remotely during April 4-6 and in person in Washington during the week of the spring meetings (April 10-17), continued remotely thereafter, and were concluded on April 28. The team comprised Ms. Tumbarello (Head), Mr. Noah Ndela, Ms. Bhattacharya (all WHD), Ms. Osorio-Buitron (FAD) and Mr. Shenai (SPR) and Messrs. Duvalsaint and Wata (Port- au-Prince office). Ms. Ojo (WHD) provided valuable research assistance and Ms. Coquillat (WHD) assisted with logistics and document preparations. Mr. Saraiva and Ms. Florestal (OED) joined the discussions. The team met with Mr. Michel Patrick Boisvert (Minister of Economy and Finance), Mr. Jean Baden Dubois (Governor of the Bank of the Republic of Haiti), Mr. Pierre Ricot Odney (Minister of Social Affairs and Labor), other senior officials, the private sector (civil society, association of industries, and banking association), and the international community through the process (WB, IADB, EU, UN, USAID, and WFP) to coordinate technical assistance and donor support. CONTENTS CONTEXT AND RECENT DEVELOPMENTS_______________________________________________________ 4 PROGRAM IMPLEMENTATION UNDER THE SMP ______________________________________________ 6 OUTLOOK AND RISKS ___________________________________________________________________________ 7 POLICY DISCUSSIONS ___________________________________________________________________________ 8 A. Fiscal Policy ____________________________________________________________________________________ 8 B. Monetary and Exchange Rate Policy___________________________________________________________ 11 C. Financial Sector _______________________________________________________________________________ 12 D. Governance ___________________________________________________________________________________ 13 STAFF APPRAISAL ____________________________________________________________________________ 14 FIGURES 1. Real Sector Developments, 2016–23 __________________________________________________________ 17 2. Fiscal Sector Developments, 2016–23 _________________________________________________________ 18 3. Monetary and Financial Sectors Developments, 2016–23 ______________________________________ 19 4. Financial Sector Indicators, 2016–22 ___________________________________________________________ 20 5. External Sector Developments, 2016–23 _______________________________________________________ 21 6. Social Indicators _______________________________________________________________________________ 22 HAITI INTERNATIONAL MONETARY FUND 3 TABLES 1. Selected Economic and Financial Indicators, 2020–28 _________________________________________ 23 2a. Non-Financial Public Sector Operations, 2020–28 (In millions of gourdes) ___________________ 24 2b. Non-Financial Public Sector Operations, 2020–28 (In percent of GDP) _______________________ 25 3a. Balance of Payments, 2020–28 (In millions of US$) ___________________________________________ 26 3b. Balance of Payments, 2020–28 (In percent of GDP) __________________________________________ 27 4. Summary Accounts of the Banking System, 2020–28 __________________________________________ 28 5. External Financing Requirements and Sources, 2020–28 ______________________________________ 29 6. Financial Soundness Indicators, June 2020–December 2022 ___________________________________ 30 APPENDIX I. Letter of Intent _________________________________________________________________________________ 31 Attachment I. Technical Memorandum of Understanding ____________________________________ 36 HAITI 4 INTERNATIONAL MONETARY FUND CONTEXT AND RECENT DEVELOPMENTS 1. Haiti continues to face dire humanitarian and security crises. The country has been hit hard by the economic spillovers from Russia’s invasion of Ukraine, with food price inflation triggering a hunger crisis affecting over 50 percent of the population. To address Haiti’s balance of payments needs, the Fund approved in January 2023 US$110.6 million under the Food Shock Window (FSW) of the Rapid Credit Facility (RCF). The security situation remains very difficult, with gangs controlling large parts of the capital and key infrastructure, worsening widespread fuel shortages. The recent cholera outbreak has further aggravated the emergency. 2. Political uncertainty persists, albeit with one notable achievement. Prime Minister Henry signed on December 21, 2022, a new agreement with representatives of all political parties, the private sector, and NGOs. The agreement, “National Consensus for an Inclusive Transition and Transparent Elections,” includes a timetable for installing an elected government by February 2024; the establishment of a High Council for the Transition (set up in February), and soon of a Body for the control of government action to enhance the current government’s accountability (including through the oversight of the budget process); and measures to fight corruption. 3. Macroeconomic conditions remain challenging. In fiscal year 2022 (FY2022) 1 , real GDP contracted for the fourth consecutive year, by 1.7 percent (Table 1). Year-on-year inflation reached 48.3 percent in March 2023 as food prices surged 48 percent (year-on-year), driven by global commodity and supply-side disruptions (security and drought). Month- on-month inflation, however, has declined sharply, from near 11 percent in October to 1.7 percent in March, suggesting that inflation is decelerating. The deficit of the non-financial public sector (NFPS) narrowed by 0.4 of a percentage point to 2.1 percent of GDP in FY2022 (Table 2a and Table 2b). Still, this was 0.6 percentage point above the level expected when the SMP was approved in June 2022 and was attributable mainly to higher-than-expected fuel subsidies (until mid-September 2022). The current account balance shifted to a deficit of 2.3 percent of GDP (Table 3a and Table 3b), from a surplus of ½ percent in FY2021, owing mostly to a negative terms-of-trade shock (higher fuel and food import costs). The exchange rate (gourde vis-à-vis US dollar) continued to depreciate, reaching 154 at the end of March 2023, a 30½ percent depreciation from September 30, 2022. Fuel shortages and security issues continue to undermine economic activity, with credit growth decelerating to 2.5 percent (year-on-year) in the first quarter of 2023. 1 The fiscal year runs from October 1 to September 30. 0 10 20 30 40 50 60 Mar-17 Dec-17 Sep-18 Jun-19 Mar-20 Dec-20 Sep-21 Jun-22 Mar-23 Overall CPI (year on year)Food CPI (year on year) Sources: Haitian Institute of Statistics and Informatics (IHSI), and Bank of the Republic of Haiti. Inflation (Percent) HAITI INTERNATIONAL MONETARY FUND 5 4. Signs of resilience have emerged, and buffers have been rebuilt, although from a low base, suggesting that policies, aligned with Staff-Monitored Program (SMP), have helped the economy. Net international reserves (NIR) have picked up in recent months, reaching almost US$396 million in mid-April 2023 (US$110.6 million related to the FSW disbursement), up from just US$114 million at end-October 2022. This increase reflects recent FX purchases to rebuild external buffers, as well as valuation effects in the central bank’s FX portfolio. Remittances remained resilient in 2022 after surging in 2020-21 and were still higher than in the pre-Covid period (as a share of imports). Custom duties helped boost fiscal revenue by 50 percent in the first six months of FY2023, which also reflected improved revenue administration and the government’s ability to collect taxes on fuel imports at the new regulated price. Monetary financing of the budget decreased considerably during October 2022-March 2023 (year-on-year)—in line with the SMP objectives—from an annual rate of 2½ percent of GDP to 1 percent. 5. Despite multiple challenges, the authorities demonstrated a firm commitment under the SMP which provided a credible anchor for enhancing policymaking and have stayed actively engaged with Fund staff, which has spurred additional support. Since the disbursement of US$110.6 million under the FSW of the Rapid Credit Facility, the authorities’ engagement has strengthened through the high-level Program Monitoring Committee (Comité de Suivi)—which meets with IMF staff biweekly. Since the last review, the Fund has also continued actively supporting Haiti’s capacity development. The IMF Legal Department (LEG) conducted a CD mission on AML/CFT in late January and advised the authorities on the revision of the Central Bank law; the IMF Fiscal Affairs Department (FAD) and LEG delivered assistance on the consumer-pricing mechanism reform of the fuel subsidy regime, completed in April. The latter will allow changes in international fuel HAITI 6 INTERNATIONAL MONETARY FUND prices to be regularly passed on to consumers. 2 This reform also features a smoothing mechanism to protect consumers by limiting the monthly variation of prices at the pump (through revisions of the current 1995 law). 3 FAD and the Caribbean Regional Technical Assistance Centre (CARTAC) provided technical assistance (TA) on cash management to improve PFM systems; FAD also delivered TA on revenue administration to broaden the tax base and improve tax compliance; the IMF Statistics Department worked with the authorities to support the production of quarterly GDP data; and the Monetary and Capital Markets Department (MCM) delivered TA on the Central Bank Banking Chart of Accounts to align them with IFRS Standards. Finally, the SMP has helped facilitate the forthcoming budget support (€19.5 million) from the European Union, which was conditional, among other things, on the successful completion of the first and second reviews of the SMP. PROGRAM IMPLEMENTATION UNDER THE SMP 6. The overall SMP implementation has been broadly satisfactory. It has helped the authorities stabilize the macroeconomic situation and move ahead with key structural reforms. This despite a worsening global economic environment, elevated global food and fuel prices, a cholera epidemic, and a highly volatile security situation. •Quantitative and indicative targets (Appendix 1. Table 1). The authorities met three of the four end-December 2022 periodic quantitative targets (QTs)— the floor on the NIR of the central bank; the floor on the preliminary balance of the NFPS; and the ceiling on the net central bank credit to the NFPS— the indicative targets (IT) for end-December. But they missed the QT on budget allocation to the Ministry of Social Affairs and Labor (MAST). However, missing this target does not imply underperformance in targeted social spending, but rather the implementation of additional safeguards that somewhat slowed budget execution by MAST (which included a more detailed tracking system). They also met four of the five ITs for March 2023, including the budget allocation to MAST. They missed by a narrow margin, however, the floor on central government revenues, which was revised up at the time of the first review. The authorities also met the three continuous QTs—non-accumulation of both domestic and external arrears and no new contracting or guaranteeing by the public sector of non- concessional external debt. •Structural benchmarks supported by capacity development (Appendix 1. Table 2). Despite some delays, all structural benchmarks were achieved. The two end-March 2023 structural benchmarks were not met but implemented with delay in April. The end-April 2023 structural benchmark and the monthly and quarterly structural benchmarks were all met. In spite of the multiple challenges, the authorities have continued implementing the structural reform agenda, supported by Fund CD, in the following areas: 2 The one-time increases in fuel prices were announced in September 2022 and passed on to consumers at the pump in November 2022 (First Review of the SMP, footnote 1, and ¶9). 3 The next steps entail ensuring consistency between the amendment law and the excise chapter of the new tax code. HAITI INTERNATIONAL MONETARY FUND 7 oGovernance and Public Financial Management. Transparency of operations at the agency Economic and Social Assistance Fund FAES has improved. The authorities re-convened the governing board of FAES and prepared the quarterly report on its operations through March 2023 (quarterly structural benchmark). They also continue to publish, on a regular basis, all public procurement contracts, including information on the successful bidders (monthly structural benchmark). They have also expanded the Treasury Single account (TSA) and adopted a medium-term budget framework with the NFPS deficit as the main anchor. oTax administration. The authorities issued a decree in late December making compulsory the use of the Taxpayer Identification Number (TIN) for all finance departments, with sanctions for fraudulent or non-use. This was followed by publication at the end of April 2023 of the TIN database and the file of active taxpayers (end-March 2023 structural benchmark). oCentral bank law. The authorities have completed the benchmark on finalizing amendments to the central bank Law, which were ratified by the Board of Directors of the BRH at the end of April 2023 in line with Fund’s TA (end-March 2023 structural benchmark). Achieving this benchmark also marks a key milestone in implementing the recommendations of the 2019 Safeguards Assessment. oAnti-money laundering. The authorities have drafted a new AML/CFT Decree that is in greater alignment with Financial Action Task Force (FATF) international standards than the previous AML/CFT law and that was endorsed by the Council of Ministers (end-April structural benchmark). oTax Policy and Custom Administration. The government has adopted of a new tax code, a primer that simplifies the tax system and eliminates many exemptions, and it is publishing all codes and tariffs related to customs. oSafeguards. The FY2021 financial audit of the BRH has been completed and its audited financial statements published. OUTLOOK AND RISKS 7. The macroeconomic outlook for Haiti remains very challenging. Growth is expected to be almost muted at 0.1 percent in FY2023 (slightly lower than 0.3 percent projected at the time of the First Review), in line with the deceleration in credit growth, owing mainly to the security crisis. It is expected to reach 1½ percent over the medium term, depending on continued implementation of structural reforms and an improved security situation. Inflation is expected to moderate gradually–to about 30 percent at the end of this fiscal year–as the impact of lower monetary financing of the fiscal deficit takes effect and world market prices for food and fuel stabilize. Inflation is then forecast to ease further over the medium term, assuming adequate macroeconomic policies. The fiscal deficit of the NFPS is projected at 1.8 percent of GDP in FY2023—0.3 percentage points below that envisaged at the time of the SMP approval—because of lower fuel subsidies and higher customs HAITI 8 INTERNATIONAL MONETARY FUND revenues. The fiscal deficit would expand slightly to about 2.2-2½ percent of GDP over the medium term, led primarily by capital spending. External debt indicators are expected to declined relative to the First Review as fiscal deficits are lower than envisaged at the time of the First Review, resulting also in a lower monetary financing of the deficit. The current account deficit is expected to narrow to 0.8 percent of GDP in FY2023, and further to 0.6 percent over the medium term, assuming imports compression and as import prices stabilize. 8. The outlook is subject to multiple risks, including security, and it is tilted mainly to the downside. Domestic risks include intensified political instability, gang-related disruptions to economic activity, a further spread of cholera, a worsening of the hunger crisis, and extreme natural disasters. Externally, Haiti is vulnerable to volatile remittance flows, lower-than-expected external financing, and renewed surges in global food and energy prices. Normalization of the security situation (not envisaged in our baseline) would greatly improve the medium-term outlook. The projected path of public debt is sustainable, although consistent with a high risk of debt distress and the debt-carrying capacity is assessed as medium, as ascertained in the most recent DSA (see EBS/23/4). POLICY DISCUSSIONS A.Fiscal Policy 9. Background. During the first half of FY2023, domestic revenue was much stronger than in previous years, rising by 48 percent, owing mainly to custom duties and reflecting strong improvement in revenue administration and the government’s ability to collect taxes on fuel imports at the new regulated price. Domestic revenue had a weak start, as a result of the paralysis of the economy in September/October, attributable to the temporary loss of access to the main fuel terminal (Varreux), which reduced tax collection in October 2022. In nominal term, revenue recovered to its historical high as activity resumed. Average monthly revenue exceeded 17 billion gourdes in the second quarter of FY2023, relative to a monthly average of 11 billion gourdes during the year-earlier quarter. Nominal spending grew 18 percent (year-on-year) in the first semester of FY2023, led mainly by capital spending (25 percent), including to strengthen national police. The increase in current spending was more subdued (13 percent), with energy transfers (including fuel and Haiti: Execution of Social Spending HAITI INTERNATIONAL MONETARY FUND 9 electricity) cut in half, 4 as the fuel price adjustment has cut fuel subsidies to zero. During the first semester of FY2023, social spending totaled 0.65 percent of GDP, slightly higher than the year- earlier period (0.62 percent of GDP). In nominal terms, total social spending surged 50 percent year- on-year, reaching 20.3 billion gourdes. The higher level of spending is primarily domestically financed. Monetary financing of the budget stood at 1 percent of GDP, based on annualized data using the outturn for the first semester. 10.Spending related to the FSW. Resources related to the FSW had not been spent as of April 30, 2023 and were kept as reserves at the central bank. This reflected the authorities’ commitment to following proper procurement processes as well as the need to respect the safeguards agreed under the RCF. Staff has given the authorities a template to facilitate the reporting of forthcoming spending under the FSW, in line with FAD-suggested best practice, to enhance transparency and accountability in the use of public spending. 11.Implementation of the 2023 budget is consistent with the SMP goals of reducing monetary financing of the deficit and in-line with staff’s earlier projections. The overall government balance is projected at 1.9 percent of GDP in FY2023 (2 percent at the time of the First Review). Monetary financing is expected to reach 1.4 percent of GDP at the end of the fiscal year, given seasonality in spending, far below the 2.3 percent in FY2022. Total domestic tax revenue is expected to climb to 6.4 percent in 2023, from 5.3 percent of GDP in 2022, broadly in line with the first Review. The higher tax revenue owes to higher customs revenue, given the recent revenue administration reforms, and the fuel price adjustment—projected to yield 0.9 percent of GDP from taxes on fuel imports. As for expenditures, current spending and domestically financed capital spending are projected to rise by 1.2 percentage point of GDP relative to 2022. 5 With global oil prices moderating, fuel subsidies will remain at zero for the rest of the fiscal year, and transfers to the electricity company will total 0.4 percent of GDP, consistent with historical patterns. The medium-term fiscal deficit is projected to slightly widen to an average of 2.1 percent of GDP, driven by a slight increase in capital spending to support infrastructure needs. 12.Efforts to boost revenue have been successful and collection should be sustained. Weaker-than-expected revenue collection at the start of the SMP at end-June 2022 prompted the implementation of administrative measures in August. These included strengthening the control of invoices submitted for imported goods and replacing the management of the revenue agency. These measures helped the authorities meet the indicative target on the floor of central government fiscal revenue for December. Staff welcomed this development and encouraged the authorities to sustain efforts to strengthen revenue mobilization—to help anchor monetary financing and finance large social and infrastructure needs and work toward the implementation of the tax code of customs reforms (approved by the Council of Ministries in December 2022 as part of the SMP’s structural agenda) and of tax administration. To this end, the authorities have requested TA from the 4 Budget presentation and reporting improved substantially for FY2023 and clearly indicate electricity subsidies. 5 Foreign financed capital spending is fully financed by grant revenues. HAITI 10 INTERNATIONAL MONETARY FUND Fund to help implement the tax code, which will become operational in October 2024 as well as TA on custom administration. 6 13.Meaningful progress has been achieved on PFM, with respect to enhancing the transparency of public spending and public finance reporting and accountability, and efforts should continue. Since March 2023, the authorities have provided far more detailed monthly data on budget execution (including spending on wages, goods and services, and capital investment by ministry and by project) and published (on the web site of the Direction General du Budget, MEF) detailed budget execution by line ministries. They are also committed to sharing more detailed quarterly financial statements for the FAES, following PFM best practices provided by the FAD. The authorities have made progress in seeking to consolidate the Treasury Single Account (TSA) (structural benchmark). They have also prepared a medium-term budget framework (MTBF), with the NFPS deficit as the main anchor, adopted together with the FY2023 budget. Going forward, the MTBF should be prepared using a top-down approach to set expenditure ceilings that will guide budget preparation at the line ministry level. Building on this reform, each key line ministry should prepare a medium-term expenditure framework (MTEF), using its defined expenditure ceilings. This reform would help ensure that the budget of line ministries conforms with the one reported by the ministry of finance, thus fostering also accountability of line ministries and consistency between data on budget execution and the budget document. 14.The authorities are working towards strengthening the social safety net and efforts should continue. Fuel subsidy reform is essential to ensure medium-term fiscal sustainability. Given the political and social implications, the authorities are taking the lead both in terms of the modalities and timing of the reform. The authorities started reviewing the retail price-setting mechanism, as the September fuel price increases have eliminated fuel subsidies only temporarily, and a comprehensive and transparent policy framework for future price adjustments needs to be implemented. The forthcoming fuel price reforms should include mitigating measures to protect the most vulnerable in conjunction with a gradual and well-communicated approach. Staff and the authorities agreed that an elaborated communication policy would greatly help the authorities’ reform strategy. Establishing a regulatory framework for the petroleum products sector and strengthening related regulatory institutions should remain amongst the authorities’ reform priorities. The authorities are taking steps to cushion the impact of the shocks on the population. 6 The authorities are also receiving support from the World Bank on customs, which entails a stock-taking exercise of customs procedures and practices, working with customs administration and sector stakeholders, under the Advisory Services and Analytics umbrella activities. Staff is closely coordinating to ensure synergies between the two institutions. HAITI INTERNATIONAL MONETARY FUND 11 The authorities have prepared a detailed strategy to tackle food insecurity and strengthen the social safety (see text Table1 and ¶15 of IMF Country Report No. 23/48 and ¶8 of IMF Country Report No. 23/80), also leveraging ongoing programs. The plan aims to expand programs that improve living conditions and enhance social inclusion, focusing on the most vulnerable groups (children, women, and old-age group). B.Monetary and Exchange Rate Policy 15.Background. Monetary financing of the budget has decreased since the start of the SMP (text chart in ¶4), which enhances the credibility of the monetary policy framework. On the exchange rate front, recent data suggest that the authorities’ interventions in the foreign exchange (FX) market are mainly to rebuild NIR. The authorities also began to unwind some FX surrender requirements (per Circular 114.3), a positive step in line with staff recommendations. And they have requested technical assistance on FX market operations, aiming at eliminating the foreign exchange parallel market. 7 16.To strengthen the monetary and exchange rate frameworks, staff continued to recommend: (i)greater exchange rate flexibility, (ii)a ceiling on credit to the NFPS as the main anchor to limit monetary financing of the deficit to 1½ percent of GDP, and (iii)short-term liquidity-absorbing operations at a fixed rate (policy rate) and full allotment. Staff recommended a further increase in short-term interest rates to initiate disinflation, given the large negative real rate of about 15 percent. While the interest rate transmission to inflation is weak, there is little room to tighten direct instruments further as reserve requirements are already at 50 percent. 17.The BRH should continue to limit its interventions in the FX market to smoothing excessive exchange rate volatility. Staff recommended that the BRH: (i)put in place an appropriate mechanism for FX interventions, such as well-designed weekly FX auctions, in lieu of the FX allocation system; (ii)advance its ongoing work on an FX market intervention rule; and (iii)complete the revision of banks’ net open position (NOP) limits. 7 The BRH published the daily reference exchange rate (taux de référence), a weighted average between the interbank rate or marche bancaire (60 percent), and the informal rate or marche informel (40 percent). In addition to the informal rate reported by the BRH, a parallel market rate is obtained from informal surveys data. HAITI 12 INTERNATIONAL MONETARY FUND These reforms will deepen the foreign exchange market and help the government formalize the FX market as well. Staff also urged the authorities to maintain their commitments not to introduce exchange restrictions or multiple currency practices. Staff received requested information on the unwinding of FX surrender requirement measures (under Circular 114.3). C.Financial Sector 18.Background. The BRH is advancing reforms to increase financial inclusion and support growth. It has been strengthening banking supervision, with Fund assistance, to upgrade the regulatory framework and move to risk-based supervision. More information is needed for a full- fledged assessment of risks faced by the financial sector, including for small non-bank financial institutions that have been growing fast. 19.Reform efforts will need focus on: •Banking supervision. The BRH has reinforced human capital through external hiring and training of supervisors. It finalized the pre-draft of risk assessment grids and the rating matrix for financial institutions, an important step toward risk-based supervision. The adoption of regulations on risk concentration, classification, and provisioning of credits—and a new chart of accounts for financial institutions—are being finalized. Staff commends recent progress and urges the BRH to finalize pending regulation and to continue working to establish risk-based supervision, supported by TA. •Digital money. BRH has benefited from the Fund’s technical assistance in analyzing key issues related to a central bank digital currency. The BRH conveyed that it does not intend to implement the CBDC at the moment, but stressed the importance of putting a placeholder in the central bank framework, in anticipation of future implementation, as legal frameworks are not frequently revised in Haiti. Staff strongly recommended that the BRH considers all aspects of the project’s desirability and feasibility, including a robust evaluation of costs and risks, before proceeding. Haiti still needs to improve the regulatory framework and/or update the national payment system to facilitate mobile payments and operators. Modernization efforts should HAITI INTERNATIONAL MONETARY FUND 13 include migration toward new international messaging standards that support interoperability and financial integrity. •Anti-money laundering. The authorities have upgraded the AML/CFT framework with the technical support of the IMF Legal Department to ensure greater alignment with the international standards of the Financial Action Task Force (FATF); and they approved in April the new AML/CFT Decree. The revised AML/CFT framework should allow Haiti to address a key item on the FATF action plan. The authorities are working with staff to address other steps necessary to exit FATF grey list and ease potential pressures on correspondent banking relationships, including completing sectoral risk assessments, implementing a risk-based supervision regime for financial institutions and designated non-financial businesses and professions, and ensuring transparency of basic and beneficial ownership information on legal persons. The authorities should also review regulations recently published by the BRH to ensure consistency with the new AML/CFT decree. In addition, the authorities are making progress in amending the Financial Intelligence Unit (FIU) law (Unité Centrale de Renseignements Financiers—UCREF), 8 including to ensure UCREF’s operational autonomy. LEG has also provided TA in this area. The IMF Legal Department stands ready to support the authorities on this endeavor. 20.The authorities are committed to the prudent use of Haiti’s SDR holdings and to transparent reporting on Haiti’s use of its SDR allocation. Haiti converted about half the SDR holdings it received from the 2021 SDR allocation to freely usable currencies, which it subsequently used to pay for priority fiscal spending. Staff emphasized the importance of maintaining institutional frameworks governing the fiscal use of the SDR allocation—including on the repayment terms between the finance ministry and central bank—and on transparency measures for SDR-related spending. The authorities also agreed to communicate publicly on the BRH or MEF websites any future conversion of their SDR allocation into freely usable currencies and to engage staff on future SDR conversions. D.Governance 21.The authorities have made solid progress on governance and further efforts are needed. The authorities have published public procurement contracts, including the publication of tenders, contracts, and the beneficial owners of successful bidders (monthly SB). To monitor the implementation of social programs, the authorities are committed to follow good PFM practices, in line with recent technical assistance from the IMF. They introduced all social expenditure into the budget and all associated financing in the Single Treasury Account at the central bank, in compliance with procurement, execution, and expenditure control procedures. The authorities have requested an IMF Governance Diagnostic CD which should help them identify the next priorities for 8 The financial intelligence units globally are tasked with receiving suspicious transaction reports from both financial institutions and non-financial institutions in cases where these institutions suspect they are dealing with proceeds of crimes. The FIU analyzes the information and together with other data sources produces intelligence reports that are sent to law enforcement to launch investigations. They are effectively the bridge between the financial sector and the law enforcement community. HAITI 14 INTERNATIONAL MONETARY FUND governance and anti-corruption reforms. The revision of to the AML/CFT legal framework is also an important step forward to address the FATF recommendations and fight corruption. 22.The authorities committed in January 2023 to strengthen transparency and audit capacity in the spending of emergency resources for the most vulnerable households to ensure accountability. To this end, they have activated budgetary mechanisms to carefully monitor, record, and publish all expenditure related to the emergency response and started publishing comprehensive monthly reports on the execution of the budget (on the Direction General du Budget, MEF), no later than 45 days after the end of each month, while carrying out internal audits of expenditure by all the ministries concerned with the requested use of the emergency resources provided in the framework of the IMF Food Shock Window. Staff welcomed these measures and stressed that an accurate and transparent recording of how these resources are spent is important for catalyzing further donor support. Staff will work closely with the authorities to monitor the implementation of these safeguards. 23.With a view to strengthen its governance and operations, the BRH had made further efforts to implement some of the overdue 2019 safeguards recommendations and staff urges the authorities to implement the pending ones. The BRH recently approved drafting amendments to its organic act (end-March 2023 structural benchmark) which, once passed, will strengthen its governance arrangements and autonomy as well as clarify its mandate. The other priority recommendations, such as the adoption of International Financial Reporting Standards and development of a medium-term plan to phase-out BRH’s involvement in development activities, as well as the alignment of the foreign investment strategy with best practices, remain in progress. Staff will continue to monitor the implementation of these recommendations. STAFF APPRAISAL 24.Haiti faces humanitarian and security crises, with a challenging macroeconomic outlook and risks tilted to the downside. The country has been hit hard by the economic spillovers from Russia’s invasion of Ukraine, with food price inflation triggering a hunger crisis. This global shock has been compounded by political instability and a dire security situation, which has heightened the economy’s fragility and further fueled inflation. Risks to the outlook include intensified political instability, a worsening of the security conditions constraining further business activity, further spread of cholera, and natural disasters. 25.Despite domestic and global difficulties, the authorities have adopted important policy reforms over the last year, anchored by the SMP, and displayed a firm commitment throughout. These include reforms on governance and anti-corruption, tax and revenue administration, budget preparation and execution, and central bank independence. Data and statistics have also greatly improved. All these have enhanced much-needed transparency in public spending and in the financial sector and helped maintain macroeconomic stability. Still, the paralysis of economic activity in September/October, owing to the escalation of gang violence, has led to temporary macro slippages. Despite the delicate political landscape, and thanks to a highly inclusive HAITI INTERNATIONAL MONETARY FUND 15 consultative process, the authorities built the necessary ownership and public support for the SMP (including through public consultations when warranted) through the high-level Program Monitoring Committee (Comité de Suivi). 26. The recent fiscal reforms are encouraging and should continue to allow Haiti to finance its large development needs. The authorities have taken crucial measures to strengthen revenue administration and boost revenue mobilization over time. These include the approval of a new tax code and tax procedures code, publication of all codes and tariffs related to customs, adoption of unique Tax Identification Numbers (TINs), publication of the TIN database and of the file of active taxpayers, and stronger oversight of the revenue agency since August 2022. Thanks mainly to an improvement of revenue administration, customs revenue has reached a historic high in recent months, although from a low base. 27. Staff welcomes the recent progress made in reducing governance vulnerabilities, but corruption and broader financial integrity risks need to continue to be effectively addressed. Governance and anti-corruption measures were key components of reforms under the SMP. The authorities have acted to strengthen accountability in the use of public resources and have boosted the transparency of public procurement for emergency resources. The recent finalization of revisions to the Central Bank Law and to the AML/CFT legal framework are also critical for improving governance and transparency. Sustaining progress on reforms to strengthen governance is paramount for ensuring inclusive growth and building the trust of the private sector and of development partners. The authorities’ recent formal request of a Fund Governance Diagnostic is a welcome development. 28. Measures taken under the SMP to strengthen public financial management are needed to promote fiscal and macroeconomic stability and should continue. The authorities have successfully consolidated the main central budgetary accounts into one Treasury Single Account and adopted a three-year medium-term budget framework for the first time. Their improved budget presentation and execution will ensure greater accountability and transparency in public finances and help reduce fiscal dominance, as will the government’s commitment to limit central bank financing of the NFPS deficit to 1½ percent of GDP. Going forward, the medium-term budget framework should be prepared at the line ministry level. The completed FY2021 financial audit of the BRH and publication of its audited financial statements was an important step in implementing the recommendations of the 2019 Safeguards Assessment, which staff urges the authorities to complete. 29. Continued strengthening of the social safety net will be essential for cushioning the impact of the shocks on the population and alleviating widespread poverty. Staff thus welcomed the authorities’ detailed strategy to tackle food insecurity and looks forward to assessing the implementation of spending related to FSW resources. The authorities are taking meaningful steps toward implementing the fuel reform strategy. The technical assistance from the Fund on the consumer-pricing mechanism of fuel—which took place in January 2023—should allow changes in international fuel prices to be regularly passed on to consumers instead of ad hoc price/sudden price adjustments. Staff recommends that the authorities follow through with the implementation of HAITI 16 INTERNATIONAL MONETARY FUND this reform, following recent TA provided by FAD. The reform should be accompanied by mitigating measures together with an effective communication strategy, to protect the most vulnerable. 30. The authorities have strengthened the monetary policy and exchange rate frameworks and should continue to do so. The authorities moved toward greater exchange rate flexibility, which has helped rebuild reserves. They have also limited monetary financing of the deficit to less than 1½ percent of GDP. The revisions to the central bank law should allow the BRH to focus on its core policy goals of stabilizing prices while maintaining adequate liquidity and financial stability to support growth. 31. Data provision to the Fund for program and surveillance purposes has improved under the SMP and data gaps are being closed. The timeliness and periodicity of data provided to the Fund exceed the commitments of countries of comparable capacity under the Enhanced General Data Dissemination System (e-GDDS), for publication purposes—which the authorities are considering implementing in the future. 32. Based on Haiti’s performance under the SMP, staff supports the completion of the Second Review. The authorities have expressed interest in another SMP, which should help lock in recent approved reforms and sustain them to further enhance economic resilience. The new SMP will continue to be supported with Fund capacity development assistance. In line with the Fund Strategy for Fragile and Conflict-Affected States, staff will also coordinate closely with Haiti’s main development partners and produce an updated Country Engagement Strategy as part of the upcoming Article IV Consultation, scheduled for fall 2023. HAITI INTERNATIONAL MONETARY FUND 17 Figure 1. Haiti: Real Sector Developments, 2016–23 Real GDP has contracted for the fourth consecutive year in FY2022 1 by 1.7 percent… …reflecting mostly a sharp decline in private consumption, investment, and net exports 1 … …and negative growth in all key sectors, particularly in agriculture, services… …and construction. Inflation rose sharply, reaching almost 50 percent y/y in March. The output gap also widened, and unemployment increased. Sources: Haitian Institute of Statistics and Informatics (IHSI), Bank of the Republic of Haiti, and Fund staff estimates. 1/ On a fiscal-year basis, ending on September 30. HAITI 18 INTERNATIONAL MONETARY FUND Figure 2. Haiti: Fiscal Sector Developments, 2016–23 Tax revenue has fallen since 2019… … while expenditure has remained stable. The fiscal deficit has been driven by fuel subsidies until September 2022… …and had been largely monetized until then... …raising also domestic debt. A fuel price adjustment took place in September 2022, mitigating the pressure on public finances thereafter. Sources: National authorities and Fund staff calculations. HAITI INTERNATIONAL MONETARY FUND 19 Figure 3. Haiti: Monetary and Financial Sectors Developments, 2016–23 Bank of Republic of Haiti’s financing of the fiscal deficit … … increased BRH net credit to the government. Private sector credit has been volatile.... …as were the lending rates which periodically decoupled from the BRH policy rate. FX deposits and loans have been stable since August 2020, after the central bank revalued the gourde… …while excess structural liquidity 1 is rising in the banking system. Sources: Bank of the Republic of Haiti and Fund staff calculations. 1/ Excess reserves are reserves above requirement ratios on deposits; structural excess reserves include excess reserves plus other bank deposits at the BRH minus reserves banks obtain under BRH facilities. HAITI 20 INTERNATIONAL MONETARY FUND Figure 4. Haiti: Financial Sector Indicators, 2016–22 The banking system has adequate reported capital buffers… … but relatively high non-performing loans and related provisions. Profitability has recovered since the exchange rate shock of August 2020 and has been stable since… …while liquidity conditions remain favorable. Sources: National authorities and Fund staff calculations. HAITI INTERNATIONAL MONETARY FUND 21 Figure 5. Haiti: External Sector Developments, 2016–23 The current account swung into a deficit in 2022 after registering surpluses in 2020-21… … while remittances (in dollar terms) are above pre-pandemic trend. FDI has declined in recent years... …while donor flows increased following the August 2021 earthquake. The REER has remained stable after its sharp appreciation in August 2020… …and external buffers have been rebuilt since November 2022. Sources: National authorities and staff calculations. HAITI 22 INTERNATIONAL MONETARY FUND Figure 6. Haiti: Social Indicators Political instability and security problems have taken a heavy toll on Haitian society… … and have reversed the small progress made in reducing poverty. The absolute number of people undernourished has resumed its upward trend… …although the undernourished as a percent of the population have been relatively steady since 2010. Sanitation rates are well below those in Fragile and Conflict- Affected states (FCS)... …although youth literacy is significantly above the FCS average and close to the world average. Sources: International Organization for Migration (IOM), Fed, World Bank, and Fund staff estimates. HAITI INTERNATIONAL MONETARY FUND 23 Table 1. Haiti: Selected Economic and Financial Indicators, 2020–28 (Fiscal year ending September 30) HAITI 24 INTERNATIONAL MONETARY FUND Table 2a. Haiti: Non-Financial Public Sector Operations, 2020–28 (Fiscal year ending September 30; in millions of gourdes) HAITI INTERNATIONAL MONETARY FUND 25 Table 2b. Haiti: Non-Financial Public Sector Operations, 2020–28 (Fiscal year ending September 30; in percent of GDP) HAITI 26 INTERNATIONAL MONETARY FUND Table 3a. Haiti: Balance of Payments, 2020–28 (In millions of U.S. dollars on a fiscal year basis; unless otherwise indicated) HAITI INTERNATIONAL MONETARY FUND 27 Table 3b. Haiti: Balance of Payments, 2020–28 (In percent of GDP on a fiscal year basis; unless otherwise indicated) HAITI 28 INTERNATIONAL MONETARY FUND Table 4. Haiti: Summary Accounts of the Banking System, 2020–28 HAITI INTERNATIONAL MONETARY FUND 29 Table 5. Haiti: External Financing Requirements and Sources, 2020–28 (In millions of US$ on a fiscal year basis; unless otherwise indicated) 1/ HAITI 30 INTERNATIONAL MONETARY FUND Table 6. Haiti: Financial Soundness Indicators, June 2020–December 2022 (In percent; unless otherwise stated) HAITI INTERNATIONAL MONETARY FUND 31 Appendix I. Letter of Intent Port-au-Prince Ms. Kristalina Georgieva May 26, 2023 Managing Director International Monetary Fund Washington, D.C., 20431, U.S.A. Madam Managing Director: 1. The Staff Monitored Program (SMP) approved in June 2022 has been a great help to us in anchoring our macroeconomic policies and our structural reforms, despite the multiple challenges our country faces. The spillovers from the Russian invasion of Ukraine have increased our economic fragility and the recent cholera outbreak has compounded the suffering of our people. With the global landscape deteriorating, our domestic structural weaknesses have grown more severe and have tested our resilience. We are also deeply grateful to you for the SDR 81.9 million (50 percent of Haiti’s quota) financial assistance the International Monetary Fund (IMF) has provided our country under the Food Shock Window (FSW) of the Rapid Credit Facility (RCF), in January 2023. This assistance has been critical in enabling us to meet urgent balance-of-payments needs arising from the war in Ukraine, and, in particular, to mitigate the impact on hunger and food insecurity in our country. Owing to external shocks and the internal escalation of violence, macroeconomic prospects have become more challenging relative to the outlook on June 17, 2022—when you approved our SMP. 2. We are most grateful to the Fund for its support and for the technical assistance provided us in implementing our structural reform agenda. Every structural benchmark has been mapped with CD provision. We greatly benefitted from the synergies between capacity development and the SMP, as part of the implementation of the new IMF Strategy for Strategy for Fragile and Conflict-Affected States (which provides for a more tailored capacity development approach anchored in the fragility context). 3. Macroeconomic conditions remain challenging. Economic growth has continued to be weak, and it contracted for the fourth consecutive year in the fiscal year ending September 30, 2022, by 1.7 percent. Growth will likely be muted this year. Year-on-year inflation grew to 48.3 percent in March from 38.7 percent in September, largely reflecting the surge in global food prices. Going forward, however, inflation (year-on-year) is expected to decelerate steadily to about 31 percent by the end of FY2022-23, owing to the stabilization of food and fuel prices in world markets. 4. On fiscal policy, we expect to end this fiscal year with an overall deficit for the nonfinancial public sector of 1.9 percent of GDP, somewhat below the 2 percent projected at the time of the First Review of the SMP. Buffers have been rebuilt and reserved reached US$396 million in April 2023. The first half of the 12-month SMP program saw progress on structural reforms in a number of key areas, despite the considerable challenges cited earlier. We completed the FY2021 financial audit of the BRH and published the audited financial statements. We have been publishing all public HAITI 32 INTERNATIONAL MONETARY FUND procurement contracts awarded since the publication of the November 9, 2021 procurement decree No. 52, including information on the beneficial owners of successful bidders (monthly structural benchmark). With the benefit of technical assistance from the IMF’s Fiscal Affairs Department, the Treasury Single Account (TSA) at the central bank has been expanded to include the main central budgetary units, including the emergency fund (end-September 2022 structural benchmark). We have also restored the regular functioning of the Board of Directors of the Economic and Social Assistance Fund (FAES), which now meets quarterly, and we are publishing the consolidated quarterly financial statements of the FAES (quarterly structural benchmark). 5. Performance under the 2022 SMP since the First Review has been satisfactory overall, given the domestic and international constraints and the political transition we are undergoing. In particular, we have met most of the indicative targets and benchmarks agreed with Fund staff for the end of the SMP program: • Quantitative and indicative targets (Appendix 1. Table 1). At the end of December 2022, we met by a large margin the quantitative targets on the floor for net international reserves of the central bank, the primary balance of the NFPS, and the ceiling for the net central bank credit to the NFPS. The end-December target on the minimum budget allocation to the Ministry of Social Affairs and Labor (MAST) was missed as we were designing a detailed strategy to tackle food insecurity and strengthen the social safety net, in light of the disbursement under the FSW. We met two continuous QTs on arrears and one on no new contracting or guaranteeing by the public sector of non-concessional external debt. We also met four of the five ITs for end-March 2023 and missed by a narrow margin the end-March IT on government tax revenue due to lower-than-expected fuel revenues, which was revised up at the time of the first review. Overall nominal revenues, so far in the fiscal year, have been more buoyant than expected at the time of the approval of the SMP. • Structural benchmarks (Appendix 1. Table 2). Despite the difficult security situation, we have continued to make good progress on structural reform, capacity building, and governance. In late December 2022, we issued a decree making compulsory the use of a unique Taxpayer Identification Number (TIN) for all finance departments, with sanctions for fraudulent or non-use, and in April we published the TIN database and the file of active taxpayers. We have also amended the Central Bank Law, thanks to the technical assistance of the Legal Department, which the BRH Board of Directors endorsed in April. The accomplishment of this benchmark was also a key step in implementing the recommendations of the 2019 Safeguards Assessment. We have also revised the AML/CFT legal framework, with the Council of Ministers approving the revisions in late April, in time to meet the end-April 2023 test date. 6. On December 19, 2022, in line with our commitment under the 2022 SMP, we approved the FY2022-23 budget and adopted a medium-term fiscal framework with the NFPS deficit as the main anchor– the first in this country’s history. The budget targets a fiscal deficit of less than 1.9 percent of GDP, well below the 2.3 percent of GDP projected at the start of the SMP program. And for the first time, the budget document includes forward estimates of central government revenues and expenditures through 2025. The smaller budget deficit is expected despite additional spending under HAITI INTERNATIONAL MONETARY FUND 33 the FSW equal to about 0.5 percent of GDP, and monetary financing of the deficit is expected to decline markedly during the fiscal year, mostly reflecting significantly lower budgetary pressure from fuel subsidies. Along with the FY2022-23 budget, we also adopted a new Tax Code and Tax Procedures Code, which simplifies personal and corporate income taxes and eliminates many exemptions, and we have published all the codes and tariffs related to customs. These reforms are expected to enter into force on October 1, 2024. 7. To promote greater transparency and accountability in public spending, we have committed to publish comprehensive monthly reports on budget implementation and will continue to do so, no later than 45 days after the end of each month. We are also committed to conducting internal audits of expenditures by all ministries involved in the use of emergency resources provided under the FSW. We have also requested of the IMF a Governance Diagnostic, which should help us identify the next priorities for governance and anti-corruption reforms. 8. We consider that a fuel subsidy reform is essential for ensuring medium-term fiscal sustainability, as discussed at the time of the SMP approval, although the SMP does not [include conditions on the specific timing of the reform. We are taking the lead both in terms of the modalities and timing of the reform considering the political and social implications. The increases in fuel prices in September 2022 have eliminated fuel subsidies for now. For future price adjustments, we intend to implement a comprehensive and transparent policy framework with a predictable and regular automatic pricing mechanism that reflects global market prices changes. Our reform will be accompanied by mitigating measures to protect the most vulnerable. 9. We are committed to avoiding the imposition or intensification of exchange and trade restrictions on making payments and transfers for current international transactions, and to not introducing or modifying any multiple currency practices. And we are committed to limiting foreign exchange intervention only to smoothing excess volatility. 10. In view of the macroeconomic policies, we have implemented to achieve the program’s objectives and our progress on the structural reform agenda, the government requests the completion of the Second Review of the SMP. Please accept, Madam Managing Director, this expression of our deepest gratitude. ___/s/___ Michel Patrick Boisvert Minister for Economy and Finance ___/s/___ Jean Baden Dubois Governor of the Bank of the Republic of Haiti Appendix I. Table 1. Haiti: Quantitative and Indicative Targets, June 2022–March 2023 1/ 3 4 INTERNATIONAL MONETARY FUND HAITI HAITI INTERNATIONAL MONETARY FUND 35 Appendix I. Table 2. Haiti: Structural Benchmarks under the SMP HAITI 36 INTERNATIONAL MONETARY FUND Attachment I. Technical Memorandum of Understanding 1. Haiti’s performance under the 12-month Staff-Monitored Program (SMP) ending May 31, 2023, will be assessed based on quantitative targets (QTs) and structural benchmarks (SBs). The authorities implemented two prior actions (see MEFP text table). This Technical Memorandum of Understanding (TMU) defines the QTs established by the Haitian authorities and the staff of the International Monetary Fund (IMF) for monitoring the program. It also defines the arrangements for the transmission of data that will permit staff to monitor program implementation. A. Definitions 2. Central Government. Unless otherwise indicated, central government refers to the central administration of Haiti and excludes local administrations (municipalities), the central bank (BRH), and other public financial institutions, autonomo us state organizations of an administrative, cultural, or scientific nature, and state-owned enterprises. Central government expenditures are financed by domestic taxes and other domestic levies and by foreign donors, through, inter alia, foreign grants, ministerial accounts (comptes courants), and domestic and foreign public debt. 3. Special funds and programs. These includ e the Road Fund (Fonds d’entretien routier, FER) and the resources mobilized to finance the Universal, Free, and Compulsory Schooling Program (PSUGO) for education, in addition to Treasury transfers. Under the Staff-Monitored Program, the resources levied to finance FER and PSUGO (through the National Education Fund, FNE) will be recorded as central government revenues. 4. Economic and Social Assistance Fund (FAES). FAES is an autonomous state financial entity, currently under the supervision of the Ministry of Economy and Finance. T he mission of the FAES is to fund short-term, labor-intensive projects aimed at improving the living conditions of poor people in urban and rural areas and increasing their productive potential. It is responsible for implementing social programs financed by the public Treasury and foreign donors. 5. Office for Monetization of Development Assistance Programs (BMPAD). The BMPAD is an autonomous state administrative organization under the supervision of the Ministry of Economy and Finance. The BMPAD ensures the implementation of grant and/or loan agreements concluded between the government and a donor or foreign lender, as part of the monetization of development aid programs in Haiti. In particular, it finances and monitors approved programs and projects from the funds generated by the monetization of aid in kind. 6. Electricité d’Haïti (EDH). EDH is a state-owned enterprise that produces, supplies, and distributes electricity. Flows between EDH and the Central Government (CG) include (i) CG transfers to EDH (including through sales taxes collected on electricity consumption and not devolved to the CG, and the payment of fuel purchase bills); (ii) the payment of letters of credit in favor of independent power producers to settle power generation bills unpaid by EDH; (iii) the payment of bills from independent producers for the purchase of fuel, which are the counterpart of EDH arrears HAITI INTERNATIONAL MONETARY FUND 37 for unpaid generation bills. Under the Staff-Monitored Program, transfers from central government are recorded under operations “above the line,” while letters of credit and financial receivables are entered under the operations “below the line.” 7. Non-financial public sector (NFPS). The NFPS includes the central government, special funds and programs (defined in paragraph 3), other autonomous state organizations of an administrative, cultural, or scientific nature, including the FAES and the BMPAD (paragraphs 4 and 5), EDH (paragraph 6), the Civil Service Pension Plan and the National Old Age Insurance Office (ONA), and local governments. 8. Public sector (PS). The public sector comprises the nonfinancial public sector, state-owned banks, and nonbank financial SOEs (enterprises over 50 percent state-owned), and the BRH. 9. Budgetary grants. Budgetary grants are grants received from Haiti’s bilateral or multilateral partners (including the European Union, the Inter-American Development Bank, the World Bank, the Caribbean Development Bank, and bilateral donors) for general or sector budget support purposes. B. Quantitative Targets (QT) 10. The implementation of the program will be monitored using the following indicators. Unless otherwise indicated, all QTs will be assessed in terms of cumulated flows from a reference date set at the end of the previous fiscal year (e.g., for fiscal year 2021-2022 the reference date is end- September 2021), as specified in Table 1 of the Memorandum on Economic and Financial Policies. 11. Program exchange rates. For the purposes of the program, all assets, liabilities, and flows denominated in foreign currency will be valued “at the program exchange rates,” as defined below, with the exception of elements that affect the government’s budgetary accounts, which will be evaluated at current exchange rates. For the purposes of the program, it has been agreed to use the following exchange rates: HTG 100.0123/US$ (BRH reference rate as at December 16, 2021), US$1.133600/EUR and SDR 0.7154070/US$ (rates as at December 16, 2021 published by the IMF on its website - https://www.imf.org/external/np/fin/data/param_rms_mth.aspx). Net Central Bank Credit to the Nonfinancial Public Sector 12. Net central bank credit to the nonfinancial public sector is defined as the difference between BRH assets and liabilities vis-à-vis the nonfinancial public sector (net claims on the public sector) according to Standardized Report Forms 1SR or 2SR reported by the BRH to the IMF. This includes the net BRH credit to central government and net BRH credit vis-à-vis the rest of the nonfinancial public sector. The calculation of the net BRH credit to the nonfinancial public sector is shown below as of September 30, 2021. HAITI 38 INTERNATIONAL MONETARY FUND Appendix II. Table 1. Haiti: Components of Net Central Bank Credit to the NFPS (In millions of gourdes) September 2021 June 2022 September 2022 December 2022 March 2023 Net central bank credit to the nonfinancial public sector 160,047,059.23 202,143,310.10 216,907,796.47 229,435,028.69 223,182,962.36 Net credit on central government 162,196,977.99 181,732,827.46 194,641,384.26 207,903,639.72 202,230,795.64 Claims on central government 200,791,090.44 257,194,431.71 269,884,127.20 287,084,483.25 280,281,880.53 Deposits by government 38,777,196.75 75,461,604.26 75,242,742.94 79,180,843.54 78,051,084.89 Deposits in current accounts 26,730,369.21 36,813,575.11 31,796,307.42 37,204,239.38 35,505,990.16 Sight deposits (HTG) 7,073,003.48 11,406,902.81 10,720,115.47 8,660,112.36 8,097,527.55 Sight deposits (US$) 19,657,365.73 25,406,672.30 21,076,191.95 28,544,127.02 27,408,462.61 Securities seized UCREF 594.75 594,748.67 594,748.67 594,748.67 594,748.67 Sundry accounts payable 636,307.08 6,097.41 7,233.00 352.15 33,912.85 Certified checks 329,125.56 371,109.60 286,815.46 420,057.43 433,374.37 Certified bank checks 25,041.45 25,041,448.88 25,043,228.88 25,041,448.88 25,041,448.88 Foreign Debt Special Fund 55,669.97 194,883.78 117,742.54 87,072.38 157,727.34 Internal Public Debt Special Fund 3,037,241.08 1,923.08 - Treasury special accounts 6,762,697.60 10,361,354.81 12,201,556.37 13,134,148.93 13,495,990.60 Civil pension – investments transaction 375,029.84 561,067.48 583,394.69 734,303.46 775,901.20 IMF debt relief after disaster 2,410,591.87 1,907,738.95 1,965,245.23 2,398,082.26 2,508,910.19 Minus: Deposits from autonomous agencies (ONA) 276,996.07 390,420.44 390,990.39 435,533.09 496,919.37 Net credit to the rest of the nonfinancial public sector -2,149,918.76 -5,200,078.71 -3,346,147.14 -4,079,172.38 -4,597,008.35 Claims on the rest of the nonfinancial public sector 610,420.96 1,274,612.09 1,563,886.60 1,552,168.80 1,537,198.42 Deposits by the rest of the nonfinancial public sector 2,760,339.72 6,474,690.80 4,910,033.74 5,631,341.18 6,134,206.77 Deposits by autonomous agencies (ONA) (HTG and US$) 276,996.07 390,420.44 390,990.39 435,533.09 435,533.09 Local government deposits (sight deposits and certified checks) 489,202.33 967,138.58 747,632.79 702,627.07 471,181.47 Deposits by state-owned enterprises (sight deposits in gourdes and US$ and certified checks) 1,994,141.32 5,117,131.78 3,771,410.56 4,493,181.03 5,227,492.22 HAITI INTERNATIONAL MONETARY FUND 39 Net International Reserves 13. The gross international reserves of the central bank are those external assets that are readily available to and controlled by monetary authorities for meeting balance of payments financing needs, for intervention in exchange markets to affect the exchange rate, and for other related purposes such as maintaining confidence in the currency and the economy, and serving as a basis for foreign borrowing. Reserve assets must be foreign currency assets and assets that actually exist. All contingent assets are excluded. Underlying the concept of reserve assets are the notions of ‘availability for use’ and ‘control’ by the monetary authorities. 1 The gross international reserves reported by the BRH from Standardized Report Forms 1SR or 2SR must conform to this definition. They include monetary gold, liquid assets, including holdings of Special Drawing Rights (SDRs), and IMF reserve position. Swaps in foreign currency with domestic financial institutions and pledged or otherwise encumbered reserve assets are excluded from gross international reserves. 14. The net international reserves of the BRH are defined as the gross international reserve of the BRH, minus (i) gross external liabilities excluding allocations of special drawing rights and liabilities related to Haiti’s participation in the capital of international financial institutions, (ii) foreign currency deposits of commercial banks at the BRH (sight deposits in US dollars and euro from BCM to BRH, and the CAM transfer), (iii) commitments related to foreign currency swap transactions, (iv) special foreign currency accounts, and (v) project accounts, all from Standardized Report Forms 1SR or 2SR with the exception of the balances of the IMF accounts (SDR holding, reserve position in the IMF, and liabilities to the IMF), which come from the IMF Finance Department. The calculation of BRH net international reserves is illustrated below. 1 See Balance of Payments Manual, http://www.imf.org/external/pubs/ft/bop/2007/bopman6.htm and Guidelines for a Data Template http://www.imf.org/external/np/sta/ir/IRProcessWeb/pdf/guide2013.pdf. Appendix II. Table 2. Haiti: Calculation of BRH Net International Reserves (In thousands) September 2021 (gourdes) September 2021 (US$) 1 June 2022 (gourdes) June 2022 (US$) 1 September 2022 (gourdes) September 2022 (US$) 1, 2 BRH gross international reserves 243,268,752.78 243,268,752.78 Gold holdings 9,880,753.71 98,795.39 11,973,510.09 119,720.38 11,412,086.84 112,977.20 Foreign currency 5,998,299.64 59,975.62 3,648,143.51 36,476.95 4,626,623.31 45,802.57 Foreign sight deposits 24,302,710.70 242,997.22 19,972,438.93 199,699.83 16,450,821.02 162,859.58 Investments abroad 189,797,159.80 1,897,738.18 196,580,981.41 1,965,568.05 193,091,082.97 1,911,560.11 SDRs holdings (according to IMF books) 13,972,219.51 139,705.01 15,047,009.07 150,451.59 14,514,617.83 143,691.59 IMF reserve position (based on IMF books) 2,818,820.50 28,184.74 3,161,513.40 31,611.25 3,094,766.71 30,637.52 Minus: Foreign liabilities 70,137,904.62 701,292.79 75,598,035.47 755,887.38 68,823,699.75 688,152.35 Of which: Foreign liabilities (excluding liabilities related to Haiti’s participation in the capital of international financial institutions) 8,518,510.82 85,174.63 1,645,925.76 16,457.23 1,652,381.92 16,358.22 Debt service payment to PDVSA 42,558,855.10 425,536.21 53,576,083.08 535,694.94 47,334,516.73 473,286.953 Off-balance-sheet foreign currency liabilities 1,460,675.36 14,604.96 1,738,342.54 17,381.29 1,765,326.81 17,476.35 Liabilities to the IMF (based on IMF books) 17,599,863.34 175,976.99 18,637,684.09 186,353.92 18,067,971.28 178,869.02 Minus: Deposits in foreign currency 129,098,781.43 1,290,829.04 139,537,396.50 1,395,202.36 148,557,706.71 1,470,689.28 Minus: Foreign currency swap transactions 6,002,703.60 60,019.65 7,088,348.85 70,874.77 7,370,423.81 72,965.61 Minus: Special accounts in foreign currency 133,391.45 1,333.75 139,470.08 1,394.53 132,421.50 1,310.94 Minus: Project accounts 67.74 0.68 71.34 0.71 68.92 0,68 Net international reserves of the BRH 41,397,115.02 413,920.24 28,020,274.18 280,168.28 18,613,956.26 186,116.67 1 Exchange rate: HTG 100,0123/US$. 2 Debt service payment to PDVSA equals the amount in escrow account. Haiti has had difficulties processing payments to Venezuela for debts incurred under the Petrocaribe agreement owing to international sanctions. Debt service payments to Venezuela are being placed in an escrow account in U.S. dollars held at the BRH. HAITI 40 INTERNATIONAL MONETARY FUND Appendix II. Table 2. Haiti: Calculation of BRH Net International Reserves (Concluded) (In thousands) December 2022 (gourdes) December 2022 (US$) 1, 2 March 2023 (gourdes) March 2023 (US$) 1, 2 BRH gross international reserves 316,451,257.94 3,132,799.25 366,494,781.48 3,628,219.35 Gold holdings 15,348,726.46 151,949.08 17,430,730.50 172,560.48 Foreign currency 2,641,945.85 26,154.69 2,014,247.53 19,940.62 Foreign sight deposits 32,399,607.01 320,749.13 56,736,180.09 561,675.96 Investments abroad 244,288,639.59 2,418,404.88 267,302,901.83 2,646,241.12 SDRs holdings (according to IMF books) 17,800,956.34 176,225.63 18,758,031.55 185,700.47 IMF reserve position (based on IMF books) 3,971,382.69 39,315.83 4,252,689.98 42,100.71 Minus: Foreign liabilities 74,731,137.84 747,219.47 78,096,292.51 780,866.88 Of which: Foreign liabilities (excluding liabilities related to Haiti’s participation in the capital of international financial institutions) 1,965,536.24 19,458.39 2,018,145.14 19,979.20 Debt service payment to PDVSA 48,095,651.71 480,897.37 49,824,567.07 498,184.39 Off-balance-sheet foreign currency liabilities 2,177,658.89 21,558.35 2,303,604.88 22,805.19 Liabilities to the IMF (based on IMF books) 22,492,291.00 222,668.83 23,949,975.43 237,099.60 Minus: Deposits in foreign currency 183,987,384.45 1,821,435.45 193,901,818.08 1,919,586.21 Minus: Foreign currency swap transactions 8,665,446.01 85,786.05 8,580,317.81 84,943.30 Minus: Special accounts in foreign currency 178,400.15 1,766.12 189,537.18 1,876.38 Minus: Project accounts 77.47 0.77 79.66 0.79 Net international reserves of the BRH 48,888,812.01 488,827.99 85,726,736.23 857,161.93 INTERNATIONAL MONETARY FUND 41 HAITI HAITI 42 INTERNATIONAL MONETARY FUND 15. Interventions of the BRH in the foreign exchange market are defined in the Memorandum of Economic and Financial Policies. 16. If budgetary grants are lower than expected the floor on net international reserves will be adjusted downwards by the amount of the difference in question. Conversely, the floor will not be adjusted upwards by the amount of budgetary grants exceeding the expected levels mentioned in the table below. Appendix II. Table 3. Haiti: Projected Budgetary Grants (In millions of US dollars) Cumulative flows since end-September 2021 Cumulative flows since end-September 2022 Dec. 2021 March 2022 June 2022 Sept. 2022 Dec. 2022 March 2023 June 2023 Sept. 2023 15.2 15.2 45.7 60.9 24.7 49.5 - - Primary Balance of the Nonfinancial Public Sector 17. Domestic arrears of the central government refer to expenditure accepted by the Treasury and unpaid after 90 days, despite the delivery of the corresponding goods and services. Domestic arrears of central government do not include unpaid off-budget government commitments. 18. Unpaid off-budget central government commitments refer to liabilities incurred outside the budgetary process (from ministries or other public bodies), which may give rise to contingent claims against central government resources. 19. Net domestic financing of the nonfinancial public sector (NFPS) corresponds to the sum of the following elements: (i) net central bank credit to the NFPS; (ii) net credit from domestic commercial banks to the NFPS (as reported in the Standardized Report Form 2SR), which includes changes in NFPS deposits and the net issuance of Treasury bills and other NFPS securities to commercial banks; and (iii) net nonbank credit to the NFPS, which includes the net issuance of Treasury bills and other NFPS securities to nonbank institutions, the change in the net position of the NFPS vis-à-vis the electricity sector (including independent power producers), and the net change in suppliers’ credit and domestic arrears of central government. 20. Net external financing of the nonfinancial public sector (NFPS) corresponds to the sum of (i) new external loan disbursements (excluding IMF loans) and (ii) the net change in external arrears minus external loan amortizations. 21. For the purposes of the program, the primary balance of the nonfinancial public sector (NFPS) corresponds to the sum of the following: net domestic financing of the NFPS and net external financing of the NFPS, after deducting interest payments on public debt. If budgetary grants do not reach the expected levels, the floor on the primary balance of the NFPS includes an asymmetric adjuster. More specifically, if the amounts of budgetary support are in deficit, the floors HAITI INTERNATIONAL MONETARY FUND 43 on the primary balance will be reduced by the amount of those deficits. Conversely, if external budget support exceeds projections, the floor on the primary balance will not change. Budget Allocation to the Ministry of Social Affairs and Labor 22. The budget allocation to the Ministry of Social Affairs and Labor (MAST) for social expenditure is defined as the sum (excluding transfers to the population) of the budget allocation (or expenditure implemented if lower) for all social programs of the MAST budget, including the resources allocated and implemented by the FAES, the Emergency Program (2022), Klere Chimen, and the activities of the Office of the State Secretary for Disability Inclusion (BSEIPH). It should be noted that this does not prevent other government entities from supporting the implementation of MAST programs. The floor on the QT applies to the sum of the allocations mentioned. New Contracting or Guaranteeing by the Public Sector of Non-Concessional External Debt 23. Definition of debt. The definition of debt is set in paragraph 8 of the Guidelines on Public Debt Conditionality in Fund Arrangements, adopted by Decision No. 16919-(20/103) of the Executive Board (October 28, 2020). For the purpose of these guidelines, the term “debt” will be understood to mean a current, i.e., not contingent, liability, created under a contractual arrangement through the provision of value in the form of assets (including currency) or services, and which requires the obligor to make one or more payments in the form of assets (including currency) or services, at some future point(s) in time; these payments will discharge the principal and/or interest liabilities incurred under the contract. Debts can take a number of forms, the primary ones being as follows: i. loans, i.e., advances of money to the obligor by the lender made on the basis of an undertaking that the obligor will repay the funds in the future (including deposits, bonds, debentures, commercial loans and buyers’ credits) and temporary exchanges of assets that are equivalent to fully collateralized loans under which the obligor is required to repay the funds, and usually pay interest, by repurchasing the collateral from the buyer in the future (such as repurchase agreements and official swap arrangements); ii. suppliers’ credits, i.e., contracts where the supplier permits the obligor to defer payments until some time after the date on which the goods are delivered or services are provided; and iii. leases, i.e., arrangements under which property is provided which the lessee has the right to use for one or more specified period(s) of time that are usually shorter than the total expected service life of the property, while the lessor retains the title to the property. For the purpose of these guidelines, the debt is the PV (at the inception of the lease) of all lease payments expected to be made during the period of the agreement excluding those payments that cover the operation, repair, or maintenance of the property. 24. Gross public debt is debt owned by Nonfinancial public sector and comprised the advances by the Banque de la République d’Haiti (BRH) to the government (see Debt Sustainably Analysis). HAITI 44 INTERNATIONAL MONETARY FUND 25. Debt guarantees by the public sector. For the purposes of the program, a debt guarantee by the public sector means an explicit legal obligation to service a debt in the event of non-payment by the borrower (in return for payment in cash or in kind). 26. Concessional debt. An external debt is considered concessional if it includes a grant element of at least 35 percent. 10 27. External public debt. This is the debt of the public sector which is contacted or serviced vis- à-vis non-residents. It includes, where applicable, debt issued domestically by the government and held by non-residents. This TMU assumes that non-residents do not hold debt issued domestically by the public sector. The stock of external debt will be adjusted if new information becomes available. 28. The central government undertakes not to contract or guarantee any new non- concessional external debt. This quantitative target also applies to domestic debt. It also applies to any private debt guaranteed by the central government that constitutes a contingent liability. Excluded from the ceiling are short-term (with a maturity of less than one year) import-related credits, rescheduling arrangements, borrowing from the IMF, non-resident purchases of treasury bills, and gourde-denominated BRH bills that are indexed to the exchange rate. This quantitative target will be monitored continuously by the authorities and any non-observance will be immediately report to the Fund. Public Sector External Arrears Accumulation 29. Arrears on external debt of the public sector. They include all debt-service obligations (principal and interest) on loans contracted or guaranteed by the public sector that are due to non- residents but not paid on the due date as set out in the loan contract; they exclude those arising from obligations being renegotiated with external creditors and (or) those that are litigious. For the purpose of assessing the quantitative target on the non-accumulation of new external debt arrears by the public sector, arrears resulting from non-payment of debt service due to international sanctions preventing payments to the creditor are excluded from the previous definition. This quantitative target will be monitored continuously by the authorities and any non-observance will be immediately report to the Fund. Domestic Arrears Accumulation of the Central Government 30. Arrears on domestic debt of the central government. They include all debt-service obligations (principal and interest) on loans contracted or guaranteed by the central government that are due to residents but not paid 90 days after the due date set out in the loan contract. The 10 A tool to calculate the grant element of a wide range of financial packages is available at: http://www.imf.org/external/np/pdr/conc/calculator/ HAITI INTERNATIONAL MONETARY FUND 45 quantitative target on domestic arrears accumulation will be monitored continuously by the authorities and any non-observance will be immediately report to the Fund. C. Reporting of Data for the Monitoring of the Program 31. In order to facilitate monitoring of the program, the government will provide IMF staff with the information set out in the following summary table. Any data revisions will be promptly communicated to IMF staff. 32. The authorities will inform IMF staff in writing at least 10 working days (excluding public holidays in Haiti) before any change in economic and financial policies that may affect the outcome of the program. Such policies include, for example, changes in tax or customs legislation, wage policy, and support for public or private enterprises. With respect to continuous QTs, the authorities will report any non-observance to the IMF promptly. HAITI 46 INTERNATIONAL MONETARY FUND Appendix II. Table 4. Haiti: Summary of Data to be Provided Sector Type of data Frequency Reporting deadline Real Sector National accounts Annual Year-end + 3 months Quarterly economic indicators (economic cycle) Quarterly Quarter-end + 2 months Consumer price index (including breakdowns) Monthly Month-end + 3 weeks Public Finances Fiscal revenues (internal, external, other) Monthly Month-end + 1 week (4 final weeks final data) Expenditures on Cash Basis (wages and salaries, goods and services, external debt, current accounts) Monthly Month-end + 1 week (4 final weeks final data) Table of government financial transactions (TOFE) Monthly Month-end + 2 weeks Balance on current accounts and operation of projects Monthly Month-end + one month Table Underlying TOFE, which enables the determination of checks in circulation and balance on investment project accounts Monthly Month-end + one month Table on budget implementation with breakdown by ministry and other bodies and by type of expenditure Monthly Month-end + one month Total monthly amount of expenditure executed by transfer letters Monthly Month-end + one month Report on Revenue Collection of DGI (progress report) Monthly Month-end + one month Tables of revenue collection of AGD (port activity indicators, analytical report of customs receipts on import) Monthly Month-end + one month Table of revenue collected and authorized expenditure (TEREDA) Monthly Month-end + one month Detailed revenue and expenditures of BMPAD Quarterly Quarter-end + one month Report on social protection expenditures Quarterly 30-day lag (final data) Table on the implementation of the PSUGO program Quarterly 30-day lag (final data) Dashboard of the state electricity utility EDH showing monthly information on the production of electricity, making explicit the composition of production by independent electricity producers, EDH, and by region. Monthly 30-day lag (final data) EDH commercial data allowing the calculation of EDH's billing and collection rates Monthly Month-end + one week EDH cash data including all revenues and all expenditures (operating, investment, and other) Monthly Month-end + one month Information on any off-budget claims presented for payment Monthly Month-end + one month HAITI INTERNATIONAL MONETARY FUND 47 Appendix II. Table 4. Haiti: Summary of Data to be Provided (Continued) Stock of unpaid off-budget central government liabilities Monthly Month-end + one month Data on all fuel shipments per product giving the CIF import price, the full price structure (including stabilization margin) and import and consumption quantities. Data on actual collections for each month with a breakdown per product and tax type. Monthly Month-end + one week Table of import prices of petroleum products, by arrival Monthly Month-end + one month Table of imported quantities of petroleum products Monthly Month-end + one month “Stabilization margin” table of the Directorate of the Tax Inspectorate Monthly Month-end + one month “Petroleum product tax” table of the Directorate of the Tax Inspectorate Monthly Month-end + one month Details of the stock of all government borrowing and debt securities (interest rate, maturity, creditor if known) Annual End of financial year + 3 months Full amortization table of domestic and external government debt Annual End of financial year + 3 months Statement of stocks and flows of repayment of suppliers’ credits and payment arrears Monthly Month-end + one week Monetary and Financial Data Exchange rate Daily Day-end + one day Monetary base and sources thereof and currency in circulation. Weekly Week-end + one week Aide Memoire Table containing, inter alia: (i) stock of BRH bonds; (ii) deposits at commercial banks; (iii) credit to private sector (in gourdes and U.S. dollars); (iv) details of inflows and outflows of foreign exchange reserves, including budget support received; (v) volume of foreign exchange transactions, including BRH sales and purchases; (vi) gross and net international reserves; (vii) net BRH credit to central government and the non-financial public sector; and stocks and interest rates of BRH bills. Weekly Week-end + one week Tables of monetary statistics showing, inter alia, the balance sheet of the BRH (Table Standardized Report Form-1SR) and the consolidated banking sector (Table Standardized Report Form -2SR) Monthly Month-end + one month IMF Weekly Tables showing, inter alia, the average and weighted interest rates on gourde and U.S. dollar-denominated deposits and credit, and the excess reserves in the banking system. Monthly Month-end + one month HAITI 48 INTERNATIONAL MONETARY FUND Appendix II. Table 4. Haiti: Summary of Data to be Provided (Concluded) Monetary and financial statistics. Standardized reporting form, balance sheets of the Central Bank and other depository corporations. Monthly Month-end + one month Information on the composition of gross reserves. Monthly Month-end + one month Banking supervision statistics and commercial indicators on commercial banks. Quarterly Quarter-end + one month The calendar and planned placements of BRH gourde-denominated dollar-indexed bills, including in banks and nonbanks. Quarterly Quarter-end + one month Audited financial statements of the BRH Annual Year-end + 3 months Balance of Payments Balance of payments (first version) Quarterly Quarter-end + 6 weeks Revised balance of payments Quarterly 3 months after the first reporting BRH FX cash flow table; quarterly projections through end of fiscal year. Quarterly Quarter-end + one month External Debt External debt report prepared by the BRH showing monthly disbursements; debt service, debt forgiveness and rescheduling, arrears, and debt stocks. Monthly Month-end + one month Details of any external public debt and debt guaranteed by the State Monthly Month-end + one month Data on stocks, accumulation, and repayment of external arrears Monthly Month-end + 6 weeks Table of complete amortization of external debt Annual End of financial year + 3 months International Investment Position (IIP) Annual Year-end + 3 months