Located in the Western Hemisphere, Haiti is the poorest country in the region, with 80% of its population living below the poverty line. Widespread deforestation, frequent natural disasters and a history of political violence have restricted the country’s growth. The country relies on international economic assistance for its fiscal sustainability. Haiti continues to record high inflation and record trade deficits. Although some improvement was witnessed in the country’s economic situation since its democratization in 2006, four tropical storms in 2008 and a massive earthquake of the magnitude 7.0 that occurred in January 2010 devastated the country’s whole infrastructure.
Haiti Economy: Reforms and GDP
A macroeconomic program developed by the International Monetary Fund (IMF) for Haiti enabled the country to post an economic growth rate of 1.8% in 2006. Continued international assistance and an improved investment scenario enabled the country to improve its economic growth to 3.4% in 2007. However, the global economic crisis of 2007-09 and its consequent impact on export demand led to a slowdown in growth in 2008 to 1.3% and negative growth of 0.5% in 2009.
Haiti continues to receive significant aid and has also received debt forgiveness for about $525 million through the Highly-Indebted Poor Country (HIPC) initiative in 2009. Haiti’s apparel segment has received a boost through US economic engagement under the Haitian Hemispheric The Opportunity through Partnership Encouragement (HOPE) Act was passed in December 2006 and HOPE II was passed in 2008. Consequently, apparel exports from Haiti have surged in recent years and account for two thirds of the country’s total exports, while contributing one tenth of its GDP. Remittances from expatriates are a major source of foreign income and contribute nearly a quarter of the country’s GDP.
Haiti Economy: Haiti Economic Profile
Haiti’s economic stagnation is the result of inappropriate economic policies, political instability for a long time, shortage of good arable land, environmental disasters, inadequate investments and migration of large portions of the skilled population.
Listed below are certain key features of Haiti’s economy.
Nearly two thirds of its population depends on the agriculture sector
The US is Haiti’s biggest trading partner
It continues to have high trade deficits
The services sector contributes over 50% of its GDP
Key Statistics: Haiti Economy
Here are some key statistics as per the 2009 estimates:
Consumer Price inflation : 0.4%
Industrial Production growth rate: -2%