The latest note on the monetary policy of the Bank of the Republic of Haiti (BRH), (3rd quarter of the fiscal year: April to June 2021), reveals that at the national level, economic activity continued to suffer socio-political unrest and the deterioration of the country's security climate to which has been added the upsurge in Covid-19 cases.

Regarding the external sector, until April 2021 the BRH reports an increase of 21.60% of imports and 8.16% of exports for the first 7 months of the fiscal year compared to the same period of the previous year which led to a deterioration of 26.28% of the trade balance over this period.

During the third quarter, the public finances situation deteriorated further due to the inability of the State to raise revenue in a context of deteriorating business climate. Thus, the evolution of the public finance situation resulted in a budget deficit partially financed by the BRH for an amount of more than 40 billion Gourde (40,224,780,000 Gourdes in June 2021) against a little over 34 billion (34,037,020,000 Gdes) the previous quarter.

In the short term, the outlook for the Haitian economy remains mixed. The deterioration of the security situation and the socio-political context as well as its impact on production and marketing channels could continue to negatively affect economic activity. As for agricultural production, it could suffer from the depletion of farmers' meager reserves during the lean season and the potential negative impacts of the hurricane season.

At the same time, the socio-political and security situation risks having a negative impact, once again this year, on the inflow of visitors during the summer period. Likewise, inflationary pressures could be fueled by the continuing upward trend in commodity prices on the international market, especially oil. Moreover, such a situation would risk increasing the country's import bill and amplifying the state's shortfalls.

Download the full BRH note from April to June 2020 (13 pages in PDF) : https://www.haitilibre.com/docs/BRH-note-3T.pdf

HL/ HaitiLibre