OREANDA-NEWS. The Executive Board of the International Monetary Fund (IMF) approved a three-year SDR 49.14 million (about US\$69.7 million, 60 percent of quota) arrangement under the Extended Credit Facility (ECF) for Haiti on Monday, May 18, 2015. The approval enables the immediate disbursement of an amount equivalent to SDR 7.02 million (about US\$10 million), while the remaining amount will be phased over the duration of the arrangement, subject to semi-annual program reviews.

The authorities’ ECF-supported program aims to raise Haiti’s growth potential and reduce vulnerabilities to shocks, while entrenching macroeconomic stability.

Following the Executive Board’s discussion on Haiti, Mr. Min Zhu, Deputy Managing Director, and Acting Chair, made the following statement:

“Haiti’s pursuit of macroeconomic stability in the aftermath of the 2010 earthquake is commendable—growth has been positive, inflation has remained moderate, and international reserve levels adequate. Going forward, continued efforts are needed to support sustained and inclusive growth, strengthen institutions and the policy framework, and maintain adequate buffers to absorb shocks.

“The new three-year program supported by the Fund’s Extended Credit Facility (ECF) seeks to entrench macroeconomic stability, improve competitiveness to spur inclusive growth, and preserve buffers, through streamlined policies that have full country ownership. Donor support ensures the full financing of the program.

“The program targets a reduction of the non-financial public sector deficit from 7.5 percent in FY2014 to 3.25 percent of GDP in FY2015 and 2.5 percent in the medium term to preserve sustainability. Lower oil prices will facilitate fiscal consolidation (allowing the government to raise fuel taxes and lower electricity subsidies), while preserving pro-poor spending. The adoption of an automatic fuel pricing mechanism will safeguard fuel taxes if oil prices rebound.

“The program aims to preserve price stability. Accordingly, the monetary policy stance will remain tight as needed until fiscal consolidation proceeds to anchor exchange rate expectations. The policy mix seeks to keep international reserves at an appropriate level to ensure adequate buffers.

“The program’s structural reform agenda focuses on strengthening competitiveness to foster growth. It tackles deep-seated problems in the electricity sector; supports the authorities’ efforts to strengthen property rights; and includes actions to increase policy effectiveness through reforms in tax administration, tax policy and public financial management, as well as improvements in the monetary framework and economic statistics.”