March 21, 2012 -- The Executive Board of the International Monetary Fund (IMF) completed the second and third reviews of Haiti’s performance under the Extended Credit Facility (ECF) arrangement on March 19, 2012. Completion of the reviews will enable an immediate disbursement of SDR 9.83 million (about US$15.1 million), bringing total disbursements under the program to date to SDR 26.21 million (about US$40.3 million).

Haiti’s ECF arrangement was approved on July 21, 2010 (see Press Release No. 10/299) together with the full relief on the country’s outstanding debt to the Fund of about SDR 178 million (equivalent to US$274 million). The debt relief and IMF financing are part of a broad international strategy to support Haiti’s longer-term economic reconstruction plans, following the devastating earthquake of January 12, 2010.

Following the Executive Board discussion on Haiti, Mr. Naoyuki Shinohara, Deputy Managing director and Acting Chair, issued the following statement:

“Haiti’s economy continues to recover. The sustained efforts of the authorities and the international community have helped rekindle growth, keep inflation at single digits levels, and strengthen the fiscal and external accounts. However, the reconstruction and the pace of implementation of structural reforms have generally been slower than anticipated, reflecting predominantly the protracted electoral process and the country’s limited administrative and absorptive capacity.

“Significant challenges remain. Most Haitians live below the poverty line, and, two years after the earthquake, more than half a million people are still living in temporary shelters. Health and sanitary conditions remain poor. While favorable, the economic outlook remains subject to risks, including a weaker global economic environment and a deterioration in the domestic political and security situations. Pursuit of appropriate macroeconomic policies, acceleration of the reconstruction, and a steady implementation of structural reforms, as well as continuous engagement from the international community, will help support the recovery and lay the foundations for long-term sustainable development.

“The government’s macroeconomic policy mix for 2012 remains appropriate. Higher government revenue and continued non-priority spending restraint will help create additional fiscal space to ramp up spending on poverty-related and other priority projects. Monetary policy remains geared toward containing inflation in single digits. Increased flexibility in the exchange rate will help manage capital inflows, absorb external shocks, and improve monetary policy effectiveness.

“The structural reform agenda focuses on strengthening revenue administration; enhancing institutional capacity for better public investment implementation and monitoring; improving public financial management and economic governance; and strengthening the financial sector.”