IMF Executive Board Approves $105 Million Food Shock Window for Haiti

WASHINGTON – The Executive Board of the International Monetary Fund (IMF) today approved the disbursement of 81.9 million SDRs ($105 million) to Haiti in accordance with food shock window the Rapid Credit Facility to help Haiti meet urgent balance of payments needs related to the global food crisis.

Haiti has been hit hard by the global food price shock. Record price inflation has exacerbated Haiti’s fragility, given the high shift from international to domestic food prices and the shortage of food supplies. With more than half of the population already below the poverty line, Haiti is facing a severe humanitarian crisis, with an expected financing gap of at least US$105 million (0.5 percent of GDP) in FY 2023, subject to reduced imports and pending additional external funding from development partners. . This shock adds to the hardships of an already highly unstable country, which is also suffering from a public health emergency (cholera) and serious security threats.

Following discussion by the Executive Board, Ms. Antoinette Sayech, Deputy Managing Director and Acting Chair, made the following statement:

“Haiti is facing a severe humanitarian crisis and has been hit hard by the economic fallout from the Russian invasion of Ukraine. These side effects included record price inflation, which exacerbated Haiti’s instability and exacerbated the suffering of the already severely malnourished Haitian population. The government is taking steps to mitigate the impact of food price shocks on the population and expand social safety nets.

“The IMF’s emergency support under the Food Shock Accelerated Lending Program will help close the balance of payments gap and support those hardest hit by rising food prices through nutrition programs and cash transfers and cash transfers to vulnerable households, tuition fee abolition, and others. measures.

“To overcome the crisis, it will be necessary to direct budgetary resources to priority spending on food programs and to increase social assistance to the most vulnerable segments of the population. To ensure the appropriate use of emergency funding, which will be vital to mobilize further donor support and mitigate debt sustainability risks, the authorities must carefully monitor, track, record and publish all emergency response costs. With the support of the Fund, they should conduct internal audits of spending by all line ministries involved in the use of emergency resources provided under the food shock program through the General Financial Inspectorate and report these internal audits to the Supreme Audit Court in a timely manner. .

“The combination of appropriate macroeconomic and structural policies under the Staff Supervised Program (SMP) provides additional assurance to the Fund’s outstanding obligations. While providing adequate liquidity support to the financial sector, the central bank should reduce monetary financing of the deficit and limit foreign exchange intervention to smooth volatility.

“SMP is also a catalyst for donor support. The successful implementation of Haiti’s SMP will be key in restoring macroeconomic stability and resilience, strengthening social safety nets, and addressing governance weaknesses and corruption.”