UNITED NATIONS (Reuters) - The economy of earthquake-ravaged Haiti could grow at an average rate of 8 percent in the coming years, provided the international community comes to its aid, the IMF chief said on Wednesday.
Dominique Strauss-Kahn, managing director of the International Monetary Fund, said the IMF believes “that it’s possible to obtain over the coming five years an average rate of growth of 8 percent ... which will lead to a GDP (gross domestic product) per capita of $1,000.”
He said that estimate is around 50 percent higher than what the fund had forecast prior to the January 12 earthquake in the impoverished Caribbean country. The 7.0-magnitude quake killed as many 300,000 people and left another 1.2 million homeless.
“That’s possible, but condition one is to have the Haitian authorities really in the driver’s seat,” he told reporters after addressing a one-day conference that the United Nations hopes will raise nearly $4 billion for Haiti.
Strauss-Kahn added that the Haitians would need immediate financial aid to plug a hole in their budget.
“Everybody is talking about reconstruction and medium term, and that’s right and we share this view,” he said. “But there will be no medium term if there is no short term. And in the short term the question is the financing gap in the budget.”
The IMF estimates that the shortfall in the Haitian budget amounts to some $320 million, Strauss-Kahn said. Haitian Prime Minister Jean-Max Bellerive told the U.N. conference his country was seeking $350 million over the next six months.
“I urged the conference to provide budget support, not only financing for long-term investment but budget support for the short term so that this financing gap can be bridged,” Strauss-Kahn said.
If Haiti does not get that money swiftly, the central bank will have to step in and provide financial resources, resulting in a “huge risk of inflation,” he added.
He also said he hoped the IMF would be part of a wider debt relief program for Haiti. The country currently owes the IMF $271 million and Strauss-Kahn said he would recommend to the fund’s board that it cancel all of that debt.
Haiti’s Finance Minister Ronald Baudin told Reuters in an interview in Port-au-Prince this week that the country’s GDP would contract by 8.5 percent this year but would rebound next year to rise by nearly 10 percent.
Editing by Will Dunham