(2022-04) Prime Minister's Budget Framework Letter for FY2021-2022

Primature (Cabinet du Premier Ministre) • 2022

Summary — A memorandum from Prime Minister Ariel Henry to all state spending officers (ordonnateurs) setting the macro-fiscal framework for the remainder of the FY2021-2022 budget, adopted six months late after a rectified 2020-2021 budget. It reviews the shocks that hit FY2020-2021 (COVID-19 resurgence, presidential assassination, the August 2021 earthquake, tropical depression Grace, gang violence) and sets growth, inflation, tax-pressure, and central-bank-financing targets for the remaining exercise.

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Key Findings

FY2020-2021 outturns: real GDP growth -1.8%, inflation 13%, tax pressure 5.7%, BRH financing 42.9 billion gourdes.
January 2022 inflation reached 24% y/y (33% for imported goods vs 19.1% for local goods).
Diaspora remittance growth slowed to 3% over the first four months of FY2021-2022, from 36% in the same period a year earlier.
The August 14, 2021 earthquake caused losses and damages equivalent to 10.9% of 2020 GDP in the Sud, Nippes and Grand'Anse departments.
FY2021-2022 budget targets: GDP growth 0.3%, tax pressure 6.4%, inflation revised to 27.3% y/y, BRH financing 40.3 billion gourdes.
Government commits to a fuel-subsidy phase-out plan, publication of the Cour des Comptes' COVID-19 expenditure audit, and a 1-for-2 civil-service replacement ratio.

Full Description

This is a formal memorandum, dated 4 April 2022 in Port-au-Prince and signed by Prime Minister Dr Ariel Henry, addressed to all spending officers (ordonnateurs) of state institutions as the budget framework letter (lettre de cadrage) for the FY2021-2022 draft budget. It opens by recalling that FY2020-2021 was disrupted by a compounding sequence of shocks (a COVID-19 resurgence from May 2021, the assassination of the President in early July 2021 and the ensuing institutional vacuum, the 14 August 2021 magnitude-7.2 earthquake striking the Sud, Nippes and Grand'Anse departments with losses and damages equivalent to 10.9% of 2020 GDP, tropical depression Grace two days later, and rising gang violence and kidnappings). It reports FY2020-2021 outturns (real GDP growth -1.8%, inflation 13%, tax pressure 5.7%, BRH financing of 42.9 billion gourdes including a 50% allocation of the IMF's SDR allocation), and notes that because the country could not adopt a budget on time, the first six months of FY2021-2022 were run under a renewed rectified budget. The letter then sets out the government's fiscal priorities for the remaining six months of FY2021-2022: financing the Plan de Relevement Integre de la Peninsule Sud (PRIPS) with 10 billion gourdes of Treasury investment spread over four years; allocating 3 billion gourdes to the Politique Nationale de Protection et de Promotion Sociales (PNPPS); and financing agricultural campaigns to mitigate anticipated inflation from the Russia-Ukraine war's impact on global commodity prices. It cites a newly negotiated IMF Staff-Monitored Program as a catalyst for other technical and financial partners, and lists reform commitments across six axes (macro-financial equilibria, fiscal resource mobilization including a planned phase-out of fuel subsidies and a first Code Fiscal Haitien, governance and security including publication of the Cour des Comptes' COVID-19 spending audit, social protection, COVID-19 vaccination, and expenditure rationalization via a public-service voluntary-retirement program with limited recruitment at a 1-for-2 replacement ratio). It closes with the FY2021-2022 budget's macro-fiscal targets: real GDP growth of 0.3%, tax pressure of 6.4% (up from 5.7%), inflation revised to 27.3% year-on-year (from 13% in 2020-2021), and BRH financing of 40.3 billion gourdes (versus a figure cited elsewhere in the same letter as 49.2 billion gourdes for 2020-2021, an internal inconsistency with the 42.9 billion gourdes figure given earlier in the text).

Topics

Geography

Time Coverage

2020-2021 — 2022-04

Keywords

lettre de cadrage, budget 2021-2022, cadrage macro-budgetaire, Ariel Henry, PRIPS, PNPPS, BRH financement, programme de reference FMI, subvention petroliere, pression fiscale

Entities

Primature, MEF, Ministere de la Planification et de la Cooperation Externe, BRH, FMI, Cour des Comptes et du Contentieux Administratif, Administration Generale des Douanes, Direction Generale des Impots, Commission Nationale des Marches Publics, Office National d'Identification, Ariel Henry

Notes

Issued by the Primature (Cabinet of the Prime Minister, signed by Dr Ariel Henry), not by MEF directly, though MEF is named as a co-implementing ministry; organization set to Primature per document letterhead and signature. Cover/body is undated but the closing page (p.9) is dated 'Port-au-Prince, le 04 Avril 2022', used as the publication month. The document's own text is internally inconsistent on FY2020-2021 BRH financing, citing 42.9 billion gourdes on p.2 and 49.2 billion gourdes (as the prior-year comparator) on p.9; both figures are reproduced faithfully as they appear. A sibling version B of this document exists in the corpus.