(2018-11) Budget framing letter for the FY2018-2019 Finance Law
Summary — Memorandum from Prime Minister Jean Henry Ceant to all public spending authorizers setting the framework for the FY2018-2019 Finance Law: macroeconomic context, the government's seven priority axes, budget discipline directives, and the macro-fiscal performance targets underlying the draft budget.
Key Findings
- Government commits to a 3-year IMF Extended Credit Facility (ECF) program to restore macroeconomic balances.
- FY2017-2018 GDP growth estimated at 1.4% (up from 1.3%), driven by commerce, transport/communication and construction, despite the July 6-8, 2018 riots.
- Fiscal revenue rose 6% to 79.6 billion gourdes in FY2017-2018 but reached only about 80% of the revised budget target.
- The gourde depreciated 11.6% between October 2017 and September 28, 2018, versus a 4.3% appreciation the prior year.
- FY2018-2019 targets: 2.8% real GDP growth, 14.7% average inflation (12.7% end-of-period), 16.6% tax pressure, deficit under 2% of GDP, Treasury-financed investment at 15%+ of domestic revenue.
Full Description
This memorandum (letter of framing, or lettre de cadrage) sets the objectives and technical instructions for preparing Haiti's Finance Law for fiscal year 2018-2019. It reviews the macroeconomic backdrop (IMF July 2018 world growth projections of 3.9%; slower Latin America and Caribbean activity) and Haiti's domestic conditions: an estimated 1.4% GDP growth for FY2017-2018 (up from 1.3%) led by commerce, transport/communication and construction, despite the July 6-8, 2018 riots that weakened the economy; annual inflation easing to 14.1% (August 2018) from 15.4% (September 2017); an 11.6% gourde depreciation between October 2017 and September 28, 2018 (versus a 4.3% appreciation the prior year); and fiscal revenue up 6% to 79.6 billion gourdes in FY2017-2018, reaching only about 80% of the revised budget target. The government states it is ready to enter a three-year IMF Extended Credit Facility (ECF) program.
The letter lays out seven priority axes inherited from the President's five-year plan (state reform and political-social stability; turning Haiti into an investment destination; agricultural production and environment; social stability via social programs; infrastructure and education quality; water and sanitation infrastructure; energy, road and port infrastructure), and directs ministries on customs/tax base widening, expenditure rationalization under the March 2017 decrees on the state's cost of living and subsidy rationalization, a near-freeze on new hiring (except the national police), a 90-day cap on supplier payment delays, and monthly online publication of subsidy beneficiaries. It sets FY2018-2019 macro-fiscal targets: 2.8% real GDP growth, 14.7% average annual inflation (12.7% end of period), tax pressure around 16.6%, a budget deficit under 2% of GDP, and Treasury-financed investment spending at 15% or more of domestic revenue (versus an estimated 10% in FY2017-2018), with Treasury bond issuance prioritized over central bank financing. It also references piloting program-based budgeting at the Ministries of Education and Health under the May 2016 law on the elaboration and execution of finance laws (LEELF). The letter is dated and signed in Port-au-Prince on 7 November 2018 by Prime Minister Me Jean Henry Ceant.
Notes
Filename/doc_id says 'v-juin2018' (June 2018 version), but the document's own signature block is dated and signed in Port-au-Prince on 7 November 2018 by PM Jean Henry Ceant (who took office in September 2018). Content (riot references, data through September 28, 2018) is consistent with a November 2018 issuance, not June 2018. Used the document's actual date (2018-11) for the title prefix rather than the filename's implied month; flagging the discrepancy for review, since a sibling 'novembre2018' file is also expected to exist and this one may be mislabeled or duplicated.