Event

After a protracted political crisis that lasted more than a year, Haiti swore in a new president, Jovenel Moïse. Moïse will be replacing interim president Jocelerme Privert. Privert ruled for a year as former president Michel Martelly left office in February 2016 after completing his 5-year mandate. Moïse, a 48-year-old banana exporter, won in a rerun of the presidential elections in November 2016 following the annulment of the late 2015 elections for alleged fraud. He was elected outright in the first round, securing almost 56% of the vote. Though, as turnout was low (around 21%) and the election results are contested by several opposition parties, he has a rather slim mandate.

Impact on country risk

Moïse is facing multiple challenges. He indicated to prioritise the pressing need for infrastructure repairs and investments in the wake of two huge natural disasters. Indeed, next to the recent devastation caused by Hurricane Matthew in October 2016 (with an estimated damage of 23% of GDP), Haiti is still recovering from the major 2010 earthquake. The projects are likely to be funded by international aid. Although aid has been on the decline since the electoral confusion of 2015-16, it is expected to recover with the inauguration of the new president. Security is another major challenge for Moïse, both in terms of crime rate and corruption. Furthermore, notwithstanding the relatively high foreign exchange reserves (covering 6.5 months of import) and the expected rise in economic growth (to around 2.5% in 2017), addressing the weak economy will be key in the coming years. Haiti remains the poorest country in the western hemisphere. It also has a rather high inflation of around 12% (end of 2016) due to depreciation pressures and food scarcity. The country is suffering from structural current account deficits and has a rather narrow export base (mainly based on private transfers and tourism). On top of that, Moïse is likely to struggle with a hostile opposition and money-laundering allegations that threaten to undermine his legitimacy, and violent unrest is not unlikely in the coming year.

Analyst: Jolyn Debuysscher, j.debuysscher@credendo.com