October 22, 2026

Haiti’s economy is expected to contract for an eighth consecutive year in fiscal 2026 as persistent insecurity, higher oil prices and weak export prospects continue to weigh on activity. The International Monetary Fund said the country remains in an exceptionally difficult macroeconomic environment shaped by humanitarian pressures, institutional fragility and repeated external shocks.

Inflation remains elevated but has moderated significantly from last year’s peak. Consumer prices are projected to rise by around 16 per cent year over year in fiscal 2026, down from more than 32 per cent in October 2025. A relatively stable exchange rate has helped contain price pressures, although higher global oil prices continue to increase living costs and place pressure on both the fiscal and external accounts.

The external position has nevertheless remained comparatively resilient. Strong remittance inflows continue to support the current account, which is expected to remain in surplus despite a weak trade balance. Gross international reserves remain adequate at about seven months of prospective imports, providing an important buffer against external shocks. However, the IMF warned that sustained increases in fuel import costs could weaken this position.
Fiscal pressures are becoming more difficult to manage. Government revenue remains exceptionally low while spending needs linked to security, humanitarian assistance and development remain substantial. The IMF has therefore called for stronger revenue mobilisation, improved tax and customs administration, more realistic expenditure planning and continued reliance on prudent financing rather than non-concessional borrowing.

Despite these constraints, Haiti has continued to make progress under its Staff-Monitored Program with the IMF. Most quantitative and indicative targets were met at the end of June, while net international reserves increased to approximately US$1.9 billion, comfortably above the programme floor. Reform implementation has continued, although some measures have been delayed by weak institutional capacity and the difficult operating environment.

Further reforms will focus on strengthening governance, improving financial integrity and increasing domestic revenue. The new tax code, which took effect on October 1, represents an important step toward modernising the tax framework, while stronger coordination between tax and customs authorities is expected to support compliance and reduce revenue leakages.

The outlook, however, remains tilted to the downside. Renewed security deterioration, higher oil prices, weaker remittance inflows following the end of Temporary Protected Status for Haitians in the United States, and possible drought associated with El Niño could all deepen economic pressures. Conversely, lower energy prices, security improvements and reduced political uncertainty could support a stronger recovery.

Ultimately, Haiti’s recovery will depend on whether macroeconomic stability can be preserved while the authorities strengthen institutions, mobilise revenue and direct scarce public resources toward urgent social and development priorities.

Source: (Caribbean News Global)