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Quick Facts
- Population:
- GDP (PPP):
- $20.7 billion
- 1.5% growth
- 1.6% 5-year compound annual growth
- $1,864 per capita
- Unemployment:
- Inflation (CPI):
- FDI Inflow:
Haiti’s economic freedom score is 52.3, making its economy the 153rd freest in the 2020 Index. Its overall score has decreased by 0.4 point because of drops in scores for monetary freedom and trade freedom. Haiti is ranked 27th among 32 countries in the Americas region, and its overall score is well below the regional and world averages.
The Haitian economy is sliding back in the mostly unfree ranks toward the repressed category from which it had emerged in 2018. GDP continues to register very weak growth.
Poor economic management and crippling natural disasters have taken a terrible human and economic toll in Haiti. Years of political volatility have severely undermined better performance on such Index indicators as financial freedom, business freedom, property rights, judicial effectiveness, and government integrity. Any hope for a more prosperous future will depend on the government’s willingness and capacity to undertake serious reforms in these areas.
Background
The Western Hemisphere’s poorest country, Haiti is plagued by widespread corruption, gang violence, drug trafficking, and organized crime. Risks are growing that President Jovenel Moïse may be ousted before the end of his term in 2022 because of a stagnating economy and his alleged involvement in the embezzlement of as much as $2 billion from Venezuela’s now-defunct PetroCaribe program. Ongoing demonstrations in 2019 quickly escalated into violent and deadly riots. Blocked roads made the distribution of food, water, medicines, and utilities difficult, and the lack of a parliamentary government has prevented fresh loans from the International Monetary Fund to pay for fuel. Ongoing reconstruction from storm damage is another major challenge. One-quarter of Haiti’s people live in extreme poverty.
Real property interests are impaired by the absence of a comprehensive civil registry. Bona fide property titles are often nonexistent. Bureaucratic red tape impedes the functioning of the judicial system, as do an antiquated penal code, opaque court proceedings, lack of judicial oversight, and widespread corruption. Political instability has undermined the rule of law. Corruption, including bribery, has raised the costs and risks of doing business.
The top personal income and corporate tax rates are 30 percent. Other taxes include value-added and capital gains taxes. The overall tax burden equals 13.3 percent of total domestic income. Government spending has amounted to 18.8 percent of the country’s output (GDP) over the past three years, and budget deficits have averaged 1.0 percent of GDP. Public debt is equivalent to 33.0 percent of GDP.
Haiti has launched a new credit registry. Labor legislation pertaining to the 24-hour weekly rest period, weekly holiday and night work premiums, distribution of hours, and minimum working age has been amended. Over two-thirds of the labor force lack jobs. In 2019, the government continued to face violent protests against IMF-mandated attempts to reduce fuel subsidies.
The total value of exports and imports of goods and services equals 75.5 percent of GDP. The average applied tariff rate is 6.5 percent, and overall trade freedom is hampered considerably by nontariff barriers. Foreign investors are granted national treatment, but the investment regime lacks efficiency. Most financial transactions are handled informally, and credit for new business ventures is severely constrained.