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- GDP (PPP):
- $18.3 billion
- 2.8% growth
- 2.0% 5-year compound annual growth
- $1,750 per capita
- Inflation (CPI):
- FDI Inflow:
Haiti’s post-earthquake reconstruction efforts continue, assisted by substantial aid from the international community. Governing institutions remain weak and inefficient, and overall progress has not been substantial. The effectiveness of public spending has been severely undermined by ongoing political volatility that undercuts the already weak rule of law.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 51.3 (no change)
- Economic Freedom Status: Mostly Unfree
- Global Ranking: 150th
- Regional Ranking: 24th in the South and Central America/Caribbean Region
- Notable Successes: Trade Freedom
- Concerns: Property Rights, Corruption, Financial Freedom
- Overall Score Change Since 2012: +0.6
Reforms to improve the business and investment climates have had little effect because of pervasive corruption and the inefficient judicial framework. Limited efforts to liberalize trade have been undermined by bureaucracy and red tape that continue to deter much-needed new investment.
Haiti’s already dysfunctional democracy deteriorated significantly under the leadership of outgoing President Michel Martelly, whose term in office was characterized by political stalemate, delayed elections, and political chaos. By the spring of 2015, the entire bicameral legislature consisted of only 10 senators. The results of legislative elections initially held in August 2015 were still in dispute at year’s end, with runoffs and a second round of presidential balloting scheduled for December 27. Twenty-five percent of Haiti’s people live in extreme poverty. Relations with the neighboring Dominican Republic have been strained since Santo Domingo began to deport tens of thousands of Dominican-born people of Haitian descent.
President Michel Martelly, whose closest aides had criminal histories, further weakened Haiti’s already fragmented institutions. Haiti is a major narco-trafficking transshipment point. The dysfunctional judicial system is underfunded, inefficient, corrupt, and burdened by a large backlog of cases, outdated legal codes, and poor facilities. There is no comprehensive civil registry, and clear titles to property are virtually nonexistent.
The top personal income and corporate tax rates are 30 percent. Other taxes include a value-added tax and a capital gains tax. The overall tax burden is estimated to equal about 12.2 percent of GDP. Government spending amounts to 28 percent of total domestic output. The budget balance has fluctuated between deficit and surplus, and public debt has increased to 26 percent of GDP. The government relies extensively on foreign aid.
The overall business environment remains burdensome, and political uncertainty further undercuts already poor regulatory efficiency. A large portion of the workforce is unemployed or dependent on informal activity. An IMF-approved extended credit facility requires Haiti to take advantage of lower global oil prices to undertake various structural reforms, including reducing fuel subsidies to shrink the fiscal deficit.
Haiti’s average tariff rate is 6.5 percent. Foreign and domestic investors are treated equally under the law. In most cases, foreign investors can maintain up to 100 percent equity and freely remit profits. The small financial sector remains underdeveloped and does not provide adequate support for the private sector. Most financial transactions are handled informally, and credit for new business ventures remains severely constrained.