(2023-04) Haiti Macro Poverty Outlook
Summary — World Bank Spring 2023 Macro Poverty Outlook for Haiti: GDP contracted 1.7 percent in 2022 amid political crisis and gang violence, with a further 1.1 percent contraction projected for FY23 before a modest rebound, while high inflation and rising poverty weigh on households.
Key Findings
- GDP contracted 1.7 percent in 2022, with agriculture down 4.5 percent and services down 2.1 percent amid political crisis and gang violence.
- The fiscal deficit widened to 3.2 percent of GDP in 2022 as tax revenue fell to 5.2 percent of GDP and fuel subsidies rose; the gourde depreciated 17.4 percent and inflation hit 38.7 percent by end-FY22.
- Remittances declined for the first time in decades, the current account turned to a 2.5 percent of GDP deficit, and net international reserves fell 71 percent to US$141 million.
- GDP is projected to contract a further 1.1 percent in FY23 before rebounding to 1.5 percent in 2024 and 2.5 percent in 2025, conditional on political stabilization and improved security.
- Poverty at the $3.65 (2017 PPP) line rose to about 62 percent in 2022 and is expected to remain near 62 percent through 2024, with risks firmly to the downside.
Full Description
Haiti's GDP contracted by 1.7 percent in 2022 as a political and power vacuum pushed gang violence to a crisis point, with agriculture (40 percent of the labor force) recording the largest decline at -4.5 percent and services falling 2.1 percent led by hospitality. Tax revenue dropped to 5.2 percent of GDP as businesses shut down, while higher fuel subsidies widened the fiscal deficit to 3.2 percent of GDP; the BRH monetized part of the gap, the gourde depreciated 17.4 percent, and inflation reached 38.7 percent by end-FY22. Remittances declined for the first time in decades and the current account swung to a 2.5 percent of GDP deficit, with net international reserves falling 71 percent to US$141 million. The outlook sees GDP contracting a further 1.1 percent in FY23 before rebounding to 1.5 percent in 2024 and 2.5 percent in 2025, contingent on political stabilization and improved security. The fiscal deficit is projected to narrow to 3.0 percent of GDP in FY23 on declining energy subsidies, then fall below 2.0 percent over the medium term, while inflation is expected to close FY23 near 40 percent on average. Poverty at the lower-middle-income line ($3.65, 2017 PPP) rose to about 62 percent in 2022 and is expected to stay elevated near 62 percent in 2023 and 2024, with growth too weak to reverse the trend. Risks are heavily to the downside, centered on continued political turmoil, insecurity, and vulnerability to natural hazard shocks.
Notes
World Bank Macro Poverty Outlook - Haiti country brief, Spring 2023 (April 2023) edition. Part of the semiannual MPO series.