Haiti: Economic Outline

Economic Indicators

Haiti is among the poorest countries in the world. Its economy, essentially based on agriculture, is very vulnerable to climatic hazards. Two-fifths of Haitians depend on the agricultural sector, mainly small-scale subsistence farming. The country is also highly dependent on international aid and remittances from the diaspora. Growth has been further hampered by a persistent political crisis and escalating gang violence, further eroding the already low human capital and institutional capacity, and Haiti has become highly unsafe. GDP continued to fall in 2023 (-1.9%), due to heightened insecurity that affects all sectors. The agricultural sector, which employs over 40% of the labor force, registered the largest decline (-5.6%). On the demand side, both public and private investments have collapsed due to the high level of insecurity and uncertainty, and government spending remains muted. According to the World Bank, Haiti is expected to experience another year of negative growth in FY24 (-1.8%) due to heightened insecurity. Public and private investments are expected to continue to fall significantly in this insecure environment from already low levels. Private consumption should remain stable, supported by decelerating inflation and strong remittances. With negative real growth, per capita GDP is projected to further decline in FY24 (-3%).

In terms of public finances, tax revenue collection improved in FY23, thanks to tighter customs control and increased oil tax revenue. However, the tax-to-GDP ratio remains low at 6.3%. Efforts to reduce energy subsidies and limit capital spending have improved the fiscal position, lowering financing needs. The fiscal deficit narrowed to 2.3% of GDP in FY23 from 3.2% in FY22. Consequently, central bank (BRH) monetary financing of the deficit declined but continued to exceed statutory limits. The anticipated decline in energy subsidies, creating additional fiscal space, should help narrow the fiscal deficit to 1.4% of GDP in FY24. Fiscal consolidation efforts are expected to continue over the medium term, and with revenue increases, the fiscal deficit should fall to near 1.0% of GDP (World Bank). Inflation decelerated during the second half of FY23 but remained high at 44.2% in FY23 due to continued monetization of the deficit, low agricultural productivity, and gang-related disruptions that hinder the transport of goods, affecting poor and vulnerable households the most. Despite a decrease in global price pressures, persistent high fuel and food prices, along with low agricultural productivity, should keep inflation high at 27% in FY24 and 20% in FY25 (World Bank).

The unemployment rate stands at 14.9% as of 2023 (World Bank). Enhancing agricultural productivity is therefore a critical policy focus to foster inclusive growth and improve equity. The textile sector, the largest formal private-sector employer, lost about 26,000 jobs (nearly half of the total) in FY23, as two large textile/apparel operations closed and others had operations disrupted. In the current context where economic opportunities are scarce and social safety nets limited, job losses have driven many of these workers and their families into poverty. The poverty rate in FY23 was estimated at 63% (USD 3.65 per day).

Monetary Indicators	2015	2016	2018	2019	2020
Haitian Gourde (HTG) - Average Annual Exchange Rate For 1 GBP	77.47	85.52	90.77	105.13	128.12

Source: World Bank - Latest available data.

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Latest Update: May 2024