LatinNews Daily - 30 June 2022

In brief: IMF approves SMP for Haiti

* The International Monetary Fund (IMF) has approved a staff monitored programme (SMP) with the Haitian government. SMPs are informal agreements between national authorities and IMF staff to monitor the authorities’ economic programme. According to the IMF, the SMP – which does not include financial assistance – aims to help the government restore macroeconomic stability and lower inflation, a key goal given the heavy burden on the poor of high inflation, which was running at an annual rate of 26.7% in April. It adds that the programme comprises “realistic measures suited to Haiti’s fragility and, if implemented, could pave the way to an upper credit tranche IMF-supported programme”. It notes that the authorities have committed to implementing a series of administrative measures, including strengthening the use of the tax identification number and cleaning up taxpayers’ portfolios; revising special tax regimes in a new tax code, including by eliminating some exemptions; and finalising and publishing the new tax code, customs code and the customs tariff. This will simplify the tax system, making it more transparent. Among other things the programme also aims to raise resources for productive spending, and to reduce monetary financing of the fiscal deficit to reduce inflation. After three years of economic contraction, IMF staff expect growth to turn positive in FY2022, supported by an increase in investment, and to recover further to 1.4% the next year.

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