Honduras Economic Forecast

Honduras Economic Outlook

October 11, 2021

The recovery gained traction in Q2, with the economy growing 25.5% year-on-year (Q1: +1.0% yoy). While benefiting from a base effect, the print marked the strongest growth reading since at least 2001 when current records began. The upturn was driven by stellar growth in public and private consumption, fixed investment and exports. Household spending likely benefited from the gradual relaxation of restrictive measures and robust remittance inflows. Turning to Q3, momentum seemingly cooled: Economic activity expanded at a softer pace in July due to easing growth in the manufacturing sector. More positively, private-sector credit growth gained steam in the same month. Meanwhile, the cabinet approved the draft 2022 budget in early September. The plans focus on broadening the tax base, while defense and public security remain key pillars.

Honduras Economic Growth

After recovering this year, the economy is forecast to expand at a somewhat softer pace in 2022 as the base effect fades. That said, the rollback of restrictive measures should support domestic and foreign demand. The outlook is clouded by lingering uncertainty over the course of the pandemic amid the emergence of new strains of Covid-19. FocusEconomics Consensus Forecast panelists see the economy expanding 6.8% in 2021 and growing 4.0% in 2022, which is unchanged from last month’s forecast.

Honduras Economy Data

2015 2016 2017 2018 2019
Population (million)9.09.19.39.49.6
GDP per capita (USD)2,3792,3962,5022,5532,621
GDP (USD bn)21.321.823.224.125.1
Economic Growth (GDP, annual variation in %)3.83.94.83.72.7
Consumption (annual variation in %)3.64.14.14.33.6
Investment (annual variation in %)22.4-5.211.84.3-15.4
Fiscal Balance (% of GDP)-3.0-2.7-2.7-2.1-2.5
Money (annual variation in %)7.815.812.87.411.6
Inflation Rate (CPI, annual variation in %, eop)2.43.34.74.14.1
Inflation Rate (CPI, annual variation in %)3.22.73.94.34.4
Benchmark Interest Rate (%)20.0218.7918.2417.43-  
Exchange Rate (vs USD)22.0823.2023.5424.2724.59
Exchange Rate (vs USD, aop)21.6022.7123.4223.8524.46
Current Account (% of GDP)-4.6-2.6-0.8-5.3-0.6
Current Account Balance (USD bn)-1.0-0.6-0.2-1.3-0.2
Trade Balance (USD billion)-2.9-2.6-2.7-3.7-3.2
Exports (USD billion)8.28.08.78.68.7
Imports (USD billion)11.210.611.412.311.9
Exports (annual variation in %)1.3-3.29.3-1.11.2
Imports (annual variation in %)0.8-5.58.07.9-3.3
International Reserves (USD)3.83.84.74.85.7
External Debt (% of GDP)35.034.336.937.437.8

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Honduras Facts

Value Change Date
Exchange Rate24.59-0.03 %Jan 01

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