Debt Cancellations Provide Some Fiscal Relief

While Haiti's incoming government will continue to face huge fiscal problems in the coming years, the willingness of international agencies and creditors to cancel the country's debt obligations as part of ongoing aid packages should provide some relief. Nonetheless, with President Michel Martelly pledging to considerably ramp up expenditure, fiscal deterioration over 2011 and 2012 is likely, and we expect Haiti to remain reliant on external financing to cover its deficits.

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