(2022-04) Haiti Macro Poverty Outlook
Summary — Haiti's economy contracted for a third consecutive year in 2021 (GDP down 1.8 percent), pushing already high poverty higher, and the World Bank projects a further 0.4 percent contraction in FY2022 amid deep political and security crises. Inflation is expected to climb to about 26.2 percent as partial fuel-subsidy removal and central-bank financing add price pressure.
Key Findings
- GDP contracted 1.8 percent in 2021, a third consecutive year of negative growth, with investment collapsing 21.8 percent and agriculture down 4.1 percent.
- FY2022 growth is projected at negative 0.4 percent, rebounding to about 1.7 percent over the medium term if security and politics stabilize.
- Inflation eased to 15.9 percent in FY2021 but is projected to close near 26.2 percent in FY2022 after a 74.3 percent average retail fuel-price hike and BRH financing of 1.9 percent of GDP.
- The fiscal deficit, 2.5 percent of GDP in 2021, is expected to narrow to 1.5 percent under an IMF Staff-Monitored Program; debt stands near 25.6 to 26.1 percent of GDP.
- Poverty remains high: the international ($1.9) poverty rate is projected around 26.5 percent, and food insecurity worsened with 80 percent of the poorest rural households reporting running out of food.
Full Description
This Spring 2022 (April) Macro Poverty Outlook reports that Haiti's economy contracted by 1.8 percent in 2021, a third straight year of negative growth driven by political instability, gang-related insecurity, and a 21.8 percent collapse in investment, with all three sectors declining and agriculture falling 4.1 percent. The fiscal deficit is estimated at 2.5 percent of GDP in 2021 (energy-sector subsidies alone accounted for 1.3 percent of GDP), and in Q1 FY2022 the government partially removed oil subsidies, raising retail fuel prices by 74.3 percent on average. Headline inflation edged down to 15.9 percent in FY2021 as the strong-gourde policy appreciated the currency by 23.2 percent, but net international reserves fell 35.8 percent to US$457.6 million. Looking ahead, GDP is expected to contract by a further 0.4 percent in FY2022, while inflation is projected to close near 26.2 percent under pressure from higher fuel prices, weaker agricultural output, and 1.9 percent of GDP in BRH financing. The fiscal deficit is expected to narrow to 1.5 percent of GDP as authorities commit to consolidation under an IMF Staff-Monitored Program, and the current account is projected to swing to a deficit of about 1.3 percent of GDP. Poverty remains elevated, with the international ($1.9) poverty rate projected around 26.5 percent in 2021/22. The economy is expected to rebound to about 1.7 percent growth over the medium term if political tensions ease and security improves, though the outlook hinges on reforms and remains vulnerable to natural-hazard shocks.
Notes
World Bank Macro Poverty Outlook - Haiti country brief, Spring 2022 (April 2022) edition. Part of the semiannual MPO series.