(2014-05) Budget framework circular for the 2014-2015 draft budget law

MEF • 2014

Summary — Memorandum from the Prime Minister to all state spending authorities setting the macro-fiscal framework and instructions for preparing the FY2014-2015 draft budget law. It reports FY2013-2014 mid-year fiscal and economic outturns and sets FY2014-2015 targets: 4.6% real GDP growth, 5.7% average inflation, a rise in the tax burden to 13%, and a 10% increase in domestically financed public investment.

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Key Findings

FY2014-2015 targets: 4.6% real GDP growth, 5.7% average inflation, tax burden raised to 13%, domestically financed public investment up 10%.
Current revenue projected up 12% to 57.1 billion gourdes; external budget support projected at 3.0 billion gourdes vs 3.1 billion in 2013-2014; total current expenditure capped around 51 billion gourdes.
FY2013-2014 mid-year: tax/customs revenue of 23.8 billion gourdes (46.76% of the 50.9 billion gourde target), current expenditure of 32 billion gourdes, deficit of 667.4 million gourdes over six months.
March 2014 year-on-year inflation of 3.2%, down from 7.7% a year earlier.
Seven government budget priorities listed, including growth/jobs, free education, poverty reduction, rule of law, PFM modernization, disaster resilience, and regional diversification.

Full Description

This memorandum, signed by Prime Minister Laurent Salvador Lamothe, is the official budget-framework circular ('lettre de cadrage') sent to all ordonnateurs (spending authorities) of the Haitian state administration to launch preparation of the draft Budget Law for fiscal year 2014-2015, the base year of the 2015-2017 triennial framework. It opens by noting that the current FY2013-2014 budget was still not fully adopted, constraining public policy execution, while the government also had to find resources for upcoming elections. It reports provisional FY2013-2014 first-half/first-quarter data: transfers to households up 13% year-on-year, exports up 14%, industrial production index up 1.5%, commercial activity up 6.5%, energy production up 0.5%, construction activity down 4.7%, year-on-year inflation of 3.2% in March 2014 (versus 7.7% the prior year), tax and customs revenue of 23.8 billion gourdes for the first semester (46.76% of the 50.9 billion gourde target, up 8% year-on-year), current expenditure of 32 billion gourdes (65.6% recurrent / 34.4% capital), and a deficit of 667.4 million gourdes over the first six months. For FY2014-2015 the government sets macroeconomic targets of 4.6% real GDP growth, 5.7% average annual inflation (based on an assumed decline in world oil and food prices and improved local agricultural supply), a tax burden rising to 13%, and a 10% increase in domestically financed public investment. Current revenue is projected to rise 12% to 57.1 billion gourdes, external budget support is projected at 3.0 billion gourdes (slightly below the 3.1 billion gourdes of 2013-2014), and total current expenditure is capped at around 51 billion gourdes to contain the deficit. The letter lists seven government priorities (growth and job creation, free universal education, poverty and vulnerability reduction, rule of law, public financial management modernization, environmental protection/disaster resilience, and regional economic diversification) and gives spending authorities detailed instructions on budget preparation, payroll discipline, credit specialization by administrative entity, procurement planning, and performance indicators, with a submission deadline of 9 June 2014 to the Ministry of Economy and Finance and the Ministry of Planning and External Cooperation.

Topics

Geography

Time Coverage

2013-10 — 2015-09

Keywords

cadrage budgetaire, lettre de cadrage, Projet de Loi de Finances, budget 2014-2015, cadre triennal, ordonnateurs, PSDH, croissance economique, pression fiscale, deficit budgetaire

Entities

Primature, Ministere de l'Economie et des Finances, Ministere de la Planification et de la Cooperation Externe, IHSI, Laurent Salvador Lamothe

Notes

Cover page is undated; publication month inferred as May 2014 from the 9 June 2014 submission deadline stated in the letter. The document is signed by the Prime Minister (Primature) rather than issued directly by MEF, though it is the budget-framework circular addressed jointly to MEF and MPCE and governs preparation of the MEF-managed budget law; filed under organization MEF per batch convention. The letter itself contains a typo referring to the 'Projet de Loi de Finances 2013-2014' in its closing line where context makes clear it means 2014-2015.