Haiti - Economy : Note on the monetary policy of the BRH (4th quarter 2020)
The international economic situation in the 4th quarter of the fiscal year 2019-2020 (July-September 2020) continued to be marked by the effects of the Covid-19 pandemic. In the United States, for example, while it is true that the available data point to a rebound in economic activity, the latter remains far below pre-crisis levels. For the Euro zone, one can already expect a third quarter of negative growth. At the same time, the pandemic continues to make its effects felt in the Dominican Republic, thus causing the central bank to relax its posture. On the other hand, on the international market, commodity prices have risen slightly from the lows reached at the height of the first wave of the pandemic.
In Haiti, a slight recovery in economic activity was noted compared to the previous three quarters. This development is attributable to a lower number of Covid-19 cases than expected, the return to regular hours of operation in various sectors and the reopening of the country to international air traffic. In addition, this timid recovery was facilitated by the good performance of transfers and an improvement in rainfall conditions since mid-August.
However, certain sectors, particularly tourism and subcontracting, continue to suffer from weak of the external demand caused by the pandemic. In addition, commercial activities in several regions of the country continue to suffer from an uncertain socio-political climate and in the particular case of the border area with the Dominican Republic, from the closure of binational markets.
Regarding the evolution of prices, the sharp depreciation of the national currency until August, the ruptures caused by the security situation in the marketing channels and the relatively high level of monetary financing have helped to keep inflation at a high standard. Thus, the variation in the Consumer Price Index (CPI) year-on-year was above 20% for all the months of the year, until July when it reached 25,7% with an average monthly inflation of 2% over the same period. However, prices started to decelerate from August onwards, thanks to the significant appreciation of the Gourde.
