Earthquake impacts will deepen Haiti's economic woes

Significance

A lack of fiscal buffers to mitigate the pandemic’s dramatic consequences has increased Haiti’s dependence on international financial assistance, while a recent earthquake has piled additional spending pressures on the government. Marginal past gains in poverty reduction have been reversed, leaving almost 60% of Haitians in poverty in 2020.

Impacts

• The interim government’s inability to deliver sufficient aid to earthquake-hit areas will drive unrest in the coming months.
• Haiti’s vulnerability to natural hazards and lack of adequate coping mechanisms will threaten growth.
• Informal bilateral trade with the Dominican Republic will continue eating into fiscal revenues.
• The continuing upward trend in commodity, especially oil, prices on the international market could drive inflationary pressures.
• Any pause in gang violence during the earthquake rescue efforts will be brief, with security worsening as elections approach.