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North & Central America and Caribbean
Haiti |
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Country information
ECONOMY
Basic Economic Facts
GDP: Gross Domestic Product (GDP): US$4.3 billion for 2005.
Annual GDP Growth: Fiscal year 2003-2004: 4%. Fiscal year 2004-2005: 2%.
GDP per head: purchasing power capacity - US $505 (2005)
GDP by sector (2006): agriculture – 29%; industry - 16%; services - 55%.
Inflation: 14.1% (June 2006)
Natural resources: bauxite, copper, calcium carbonate, gold, marble.
Major Industries: agriculture: (29% of GDP) - coffee, mangoes, sugarcane, rice, corn, cacao, sorghum, pulses, other fruits and vegetables Industry (16% of GDP) - Apparel, handicrafts, electronics, food processing, beverages, tobacco products, furniture, printing, chemicals, and steel Services: (55% of GDP) - Commerce, government, tourism
Major trading partners: US ($310 million, 2005)
Total Exports F.O.B. - $381 million (2005): light manufactures, mangoes, essential oils, cocoa
Imports: US$1.3 billion C.I.F.(2005)
Exchange rate: approx. 40.7 Haitian Gourdes = US$1.00
Note: There are serious problems with national accounts in Haiti, including incomplete coverage and the questionable accuracy of raw data. Structural adjustment agreements with the International Monetary Fund (IMF), World Bank, Inter-American Development Bank and other international financial institutions are aimed at creating necessary conditions for private sector growth, have proved only partly successful.
Economy Overview
Haiti is the poorest country in the Western Hemisphere. About 80% of the population lives in abject poverty. Nearly 50% of all Haitians depend on the agricultural sector for employment, Agriculture’s contribution to the economy consists mainly of small-scale subsistence farming, with most farms being less than 2 hectares. Unemployment is estimated at 70%, and the country has experienced little job creation in recent times although the informal economy is growing. Following legislative elections in May 2000, fraught with irregularities, international donors – including the US and the EU – suspended almost all aid to Haiti. This destabilised the Haitian Currency, the gourde, and combined with fuel prices hikes, caused widespread price increases.
The IMF, in a statement issued in June 2007, noted that the authorities had made remarkable progress in achieving economic stability over the last year. The statement was cautious as to continued progress given the economic and social challenges facing Haiti. Economic and social conditions in Haiti deteriorated significantly during the early 2000s as the continued political stalemate undermined external financial support, and private investment and structural reforms came to a halt. According to the IMF, the situation resulted in economic stagnation, high inflation and widespread unemployment. The political turmoil in early 2004 and the devastating floods in May and September compounded these difficulties and led to a contraction of real Gross Domestic Product (GDP) by nearly four per cent in 2003-04. GDP has begun to recover, growing at 2.3% in FY 05/06.
The broad social and economic strategy developed by the interim government gained the support of the international community and substantial pledges of financial assistance during a July 2004 donors’ conference.
The government’s macroeconomic policies were framed in the context of a Staff-Monitored Programme (SMP) with the IMF covering the period April-September 2004 and from October 2004 were supported by the International Monetary Fund’s Emergency Post-Conflict Assistance (EPCA), which was approved by the Fund’s Board on 10 January 2005. The IMF has deemed performance under the SMP and the EPCA-supported programme satisfactory.
The IMF said the key challenge is to put in place policies that would promote faster growth and generate adequate fiscal revenues for improving social services, institutional capacity and infrastructure and for bringing down poverty. The actions taken by the authorities to re-engage donors, clear arrears to the World Bank and increase the Fund’s involvement in Haiti have been important steps towards a medium-term development programme aimed at raising the rate of growth and reducing poverty.
The Inter-American Development Bank (IDB) has approved a Transition Strategy for Haiti for the period 2005-2006. This "supports Haiti's efforts to alleviate pressing social needs, establish its economy, lay a foundation for pro-poor growth and pave the way towards a new elected government in 2006 and beyond the transition". The IDB Transition Strategy will guide the implementation of a $270m programme of operations in the form of investment loans and technical assistance grants.
