- IMF And Haiti Reach Staff-Level Deal Despite Security and Fiscal Pressures
Haiti and the International Monetary Fund have reached a staff-level agreement on the fourth review of the country’s Staff-Monitored Programme, even as persistent insecurity, weak state revenues and a worsening humanitarian crisis threaten to prolong an economic contraction now entering its eighth consecutive year.
The preliminary agreement, reached after a virtual IMF mission held from September 14 to 25, remains subject to approval by the Fund’s management. The programme does not provide financing or require endorsement by the IMF’s Executive Board, but is intended to help Haiti build a policy track record that could eventually support access to a formal IMF lending arrangement.
Haiti met all but one of the programme’s quantitative and indicative targets at the end of June 2026. The exception was the continuous target preventing the accumulation of external arrears. The arrears, which the IMF attributed to administrative and capacity constraints, were subsequently cleared.
The performance is notable because it has been achieved in an operating environment where insecurity has disrupted economic activity, weakened public services and complicated the implementation of reforms.
Yet the headline compliance figures conceal a more difficult economic reality. Haiti’s economy is expected to contract for an eighth consecutive year in the 2026 financial year, weighed down by insecurity, elevated oil prices and weak prospects for textile and apparel exports.
“Haiti faces an exceptionally challenging macroeconomic environment shaped by persistent insecurity, dire humanitarian and social conditions, and multiple adverse shocks,” said Camilo E. Tovar, who led the IMF mission.
Inflation is projected at about 16 per cent year on year in 2026. That is substantially below the peak of more than 32 per cent recorded in October 2025, helped by a relatively stable exchange rate, but it remains high enough to erode household incomes in a country already facing widespread poverty and limited access to essential services.
The central tension in Haiti’s economic position is that its external accounts appear more resilient than its domestic economy.
Strong remittance inflows and adequate foreign-exchange reserves have helped to stabilise the balance of payments. Gross international reserves stand at roughly seven months of prospective imports, while net international reserves increased to about $1.9bn at the end of June — well above the programme floor.
The current account is expected to remain in surplus despite a weak trade balance.
But that resilience is heavily dependent on financial flows from Haitians living abroad. The termination of Temporary Protected Status for Haitians in the US could weaken remittance inflows, removing one of the economy’s most important sources of foreign currency and household support.
Higher global oil prices present another vulnerability. Haiti depends heavily on imported fuel, meaning sustained increases in energy prices would place pressure on inflation, the fiscal position and foreign-exchange reserves simultaneously.
“The external position continues to be supported by strong remittance inflows and adequate reserve buffers,” Mr Tovar said. “However, sustained increases in fuel import costs remain a source of vulnerability for the external sector.”
This creates an uncomfortable policy dilemma. The government must increase expenditure on security, humanitarian assistance and development at precisely the moment when exceptionally low domestic revenue and higher fuel costs are narrowing its fiscal space.
The IMF said Haiti would need stronger revenue mobilisation, improved tax and customs administration and more realistic expenditure planning to accommodate its spending priorities without undermining macroeconomic stability.
A new tax code scheduled to take effect on October 1 is expected to consolidate and modernise the country’s tax framework. Its impact, however, will depend on the ability of already stretched public institutions to enforce the rules, improve compliance and reduce leakages.
The Fund also urged the authorities to avoid non-concessional borrowing and strengthen budget execution, cash management and payroll controls. Consolidating the Treasury Single Account and improving the management of the public-sector wage bill could release resources for priority spending.
“Creating space for these priorities, while protecting the most vulnerable and preserving macroeconomic stability, will require stronger revenue mobilisation,” Mr Tovar said.
Haiti’s reform agenda extends beyond fiscal policy. The IMF is seeking improvements in financial integrity, anti-corruption enforcement, central bank governance, financial-sector supervision and the quality of economic data.
Operationalising specialised judicial chambers for complex financial crimes and mass crimes is expected to form part of efforts to strengthen enforcement against corruption, money laundering and organised crime.
The Banque de la République d’Haïti is also expected to improve reserve management, internal controls, information-technology security and the governance of its investment decisions while maintaining confidence in the exchange-rate framework.
These reforms are technically important, but their success depends on a functioning state. Haiti’s experience illustrates the limits of conventional economic policy in a country where insecurity restricts commerce, disrupts tax collection and prevents public institutions from operating normally.
The proposed deployment of the Gang Suppression Force has raised hopes of a gradual improvement in security. A successful electoral process could also reduce political uncertainty and revive confidence.
But the IMF warned that risks remain tilted to the downside. Renewed security setbacks, higher oil prices, weaker remittances and a possible El Niño-related drought could deepen the contraction and keep inflation elevated.
Conversely, lower oil prices, stronger security gains and a smooth political transition could provide the foundation for recovery.
The authorities’ success in meeting most programme targets therefore represents institutional resilience rather than economic recovery. Haiti has maintained reserves, limited central bank financing of the public sector and advanced parts of its reform programme. It has not yet restored the conditions required for sustained growth.
External assistance will remain critical. The IMF said development partners should provide timely and predictable support through grants and concessional financing, accompanied by transparency and rigorous monitoring.
For Haiti, the fourth programme review offers evidence that economic discipline can be preserved even under extreme pressure. But it also reveals the fragility of that achievement.
Reserves and remittances may stabilise the external accounts, while programme targets provide a measure of policy credibility. Neither can substitute for security, political legitimacy and functioning public institutions.
Until those conditions improve, Haiti’s apparent macroeconomic stability will remain less a platform for recovery than a defence against deeper economic deterioration.
