(2020-10) Haiti Macro Poverty Outlook
Summary — World Bank Macro Poverty Outlook brief for Haiti (October 2020), reporting that COVID-19, political instability, and structural weaknesses drove GDP to contract by 3.1 percent in HFY2020 while the international poverty rate rose to 27.3 percent. It presents macroeconomic and poverty projections through 2021/22.
Key Findings
- Real GDP is estimated to have contracted 3.1 percent in HFY2020 amid COVID-19, political crisis, and global downturn, after a 1.4 percent drop in HFY2019.
- The gourde lost 23.4 percent of its value between October 2019 and August 2020 before appreciating around 30 percent by mid-September on BRH interventions and spending suspension.
- Headline inflation reached 25.7 percent and food inflation 31.1 percent year on year in July 2020, with the policy rate cut 400 basis points to 10.0 percent.
- The international poverty rate rose to an estimated 27.3 percent in 2020 from 25.9 percent in 2019, and is projected to reach 28.7 percent in 2021.
- Limited fiscal space, gang violence, and political instability threaten recovery, with growth projected at 1.1 percent in 2020/21 and 2.1 percent in 2021/22.
Full Description
This World Bank Macro Poverty Outlook country brief for Haiti (Annual Meetings, October 2020 edition) assesses an economy battered by the COVID-19 pandemic, a lingering political crisis, and deep structural weaknesses. After contracting 1.4 percent in HFY2019, activity is estimated to have fallen 3.1 percent in HFY2020, with the business indicator (ICAE, covering about 80 percent of activity) down 4.1 percent in the first half. The gourde lost 23.4 percent of its value between October 2019 and August 2020 on central bank financing of large deficits, before appreciating around 30 percent by mid-September after aggressive BRH FOREX interventions and a suspension of discretionary spending. Headline inflation reached 25.7 percent and food inflation surged to 31.1 percent year on year in July 2020, while the central bank cut its policy rate 400 basis points to 10.0 percent. The international poverty rate (US$1.90 per day, 2011 PPP) is estimated to have risen to 27.3 percent in 2020 from 25.9 percent in 2019, and nearly half of those employed before COVID-19 had lost jobs by May 2020. The brief projects GDP growth recovering modestly to 1.1 percent in 2020/21 and 2.1 percent in 2021/22, with the poverty rate climbing further to 28.7 percent in 2021. Limited fiscal space, gang violence, and political instability are flagged as key risks to recovery.
Notes
World Bank Macro Poverty Outlook, Haiti country brief, Annual Meetings 2020 (October 2020) edition. Haiti section extracted from the Latin America and Caribbean regional MPO volume. Part of the semiannual MPO series.