ECONOMIC ANALYSIS – REPUBLIC OF HAITI
Kyle Santwan FY.B 20
Background
The Republic of Haiti also known just as “Haiti” is a sovereign state located on the island of Hispaniola in the Greater Antilles archipelago of the Caribbean Sea. It is 27750 sq.km in size and has a current estimated population of 10.8 million, making it the second most populated country in the Caribbean as a whole. In 2010 just as Haiti’s economy was starting to grow again due to trade agreements that they had signed with the likes of USA, which was giving their exports and economy the necessary push, the economy was sent back into turmoil. On the 12th of January 2010, an earthquake clocking a magnitude of 7.3 on the Richter scale, struck just 25 kilometres south-west …show more content…
This lack of investment would lead to a fall in the demand for Haitian Gourde, causing a depreciation in the case of a flexible exchange rate. But surprisingly empirical evidence shows an appreciation in the exchange rate in fact, since 2010 which may be due to the country overvaluing its currency in a managed float system. Where in the government attempts to keep the value of the currency between a minimum and maximum value decided for a period of …show more content…
All the destruction and injuries caused due to this earthquake would ideally have needed to be taken care of by the government in the form of repairs and other health care. Which led to a severe budget deficit (government spending > government revenue) in order to finance these repairs. In fact this led to Haiti requiring to borrow money on several occasions from other the IMF or other countries in order to get the economy back on track. Resulting in an accumulation of severe debts and a worsening debt to GDP ratio, causing a debt crisis and recession. As GDP growth rate fell in 2010 only to start growing extremely slowly in the years to follow as shown below, further hit recently due to the
Kyle Santwan FY.B 20
Background
The Republic of Haiti also known just as “Haiti” is a sovereign state located on the island of Hispaniola in the Greater Antilles archipelago of the Caribbean Sea. It is 27750 sq.km in size and has a current estimated population of 10.8 million, making it the second most populated country in the Caribbean as a whole. In 2010 just as Haiti’s economy was starting to grow again due to trade agreements that they had signed with the likes of USA, which was giving their exports and economy the necessary push, the economy was sent back into turmoil. On the 12th of January 2010, an earthquake clocking a magnitude of 7.3 on the Richter scale, struck just 25 kilometres south-west …show more content…
This lack of investment would lead to a fall in the demand for Haitian Gourde, causing a depreciation in the case of a flexible exchange rate. But surprisingly empirical evidence shows an appreciation in the exchange rate in fact, since 2010 which may be due to the country overvaluing its currency in a managed float system. Where in the government attempts to keep the value of the currency between a minimum and maximum value decided for a period of …show more content…
All the destruction and injuries caused due to this earthquake would ideally have needed to be taken care of by the government in the form of repairs and other health care. Which led to a severe budget deficit (government spending > government revenue) in order to finance these repairs. In fact this led to Haiti requiring to borrow money on several occasions from other the IMF or other countries in order to get the economy back on track. Resulting in an accumulation of severe debts and a worsening debt to GDP ratio, causing a debt crisis and recession. As GDP growth rate fell in 2010 only to start growing extremely slowly in the years to follow as shown below, further hit recently due to the