(2020-04) Haiti Macro Poverty Outlook

World Bank • 2020

Summary — World Bank Spring 2020 Macro Poverty Outlook for Haiti: GDP is estimated to have contracted by 0.9% in HFY2019 amid political turmoil, and is projected to shrink by a further 3.5% in HFY2020 as COVID-19 hits the economy. The outlook carries heavy downside risks and poverty is expected to rise.

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Key Findings

GDP contracted an estimated 0.9% in HFY2019 amid political turmoil and is projected to shrink 3.5% in HFY2020 as COVID-19 hits, before recovering 1.0% in 2021 and 1.3% in 2022.
The fiscal deficit was contained at 4.0% of GDP in 2019 through cuts to capital investment and social spending, but debt rose to 43.3% of GDP (from 23.7% in 2014) and is projected to reach 54.1% by 2022.
The gourde depreciated over 22% in the fiscal year and inflation closed above 20%, with the Bank's end-January 2020 estimate at 22.5%, eroding the purchasing power of the poor.
The current account deficit narrowed to 0.4% of GDP in 2019 on weak imports and remittances (now 35% of GDP) but is projected to widen to 6.1% in HFY2020.
With the rebound not outpacing population growth, no welfare improvement is expected and poverty incidence would likely increase, amid risks from the political crisis, institutional vacuum and the pandemic.

Full Description

This World Bank Macro Poverty Outlook brief (Spring 2020, cut-off April 6, 2020) reports that Haiti's GDP growth has been anemic for five years, barely matching population growth of 1.5%, and that GDP contracted by an estimated 0.9% in HFY2019 amid a protracted political crisis that hurt agriculture and services. The fiscal deficit was contained at 4.0% of GDP through cuts to capital investment and social spending, while the debt-to-GDP ratio nearly doubled from 23.7% in 2014 to 43.3% in 2019. The gourde depreciated by more than 22% over the fiscal year and inflation closed above 20%, eroding household purchasing power, with about half of households food insecure at end-September 2019. In Q1 HFY2020 activity remained subdued, with GDP estimated to have contracted 4.0% y/y and the Bank's end-January inflation estimate at 22.5%. The outlook projects GDP to contract 3.5% in HFY2020 as COVID-19 hits services, remittances and exports, before a modest recovery of 1.0% in 2021 and 1.3% in 2022, with the current account deficit widening to 6.1% of GDP in HFY2020. Because the rebound is not expected to outpace population growth, no welfare improvement is anticipated and poverty incidence would likely increase, with downside risks from the unresolved political crisis, an institutional vacuum after Parliament lapsed on January 13, 2020, and the COVID-19 pandemic.

Topics

Geography

Time Coverage

2017-01-01 — 2022-12-31

Keywords

Macro Poverty Outlook, MPO, macroeconomic outlook, poverty projection, GDP growth, fiscal, Haiti

Entities

World Bank

Notes

World Bank Macro Poverty Outlook, Haiti country brief, Spring 2020 (April 2020) edition. Haiti section extracted from the Latin America and Caribbean regional MPO volume. Part of the semiannual MPO series.