Honduras Economic Forecast

Honduras Economic Outlook

June 11, 2019

Despite picking up in March on a rebound in the agricultural sector, the economic activity index averaged markedly lower in the first quarter compared to the prior quarter, suggesting a noticeable moderation in economic growth in the opening quarter of 2019. The external sector was likely a larger drag on the economy in Q1 as reflected by the year-on-year widening of the trade deficit owing to a sharp drop in exports. Meanwhile, in the political arena, violent protests erupted at the end of May with demonstrators demanding President Juan Hernandez’s resignation. Social unrest, which is centered around fears that the education and health sectors will be privatized, continued through early June, despite the repeal of the reform bills on 2 June. This suggests protests could well constrain the administration going forward.

Honduras Economic Growth

The outlook for this year remains favorable and strong domestic demand should continue to support growth. However, the outlook is clouded by fluctuations in commodity prices, uncertain U.S. foreign policy regarding development funding and the potential termination of Hondurans’ temporary protected status (TPS) in 2020. FocusEconomics Consensus Forecast panelists see the economy growing 3.6% in 2019, which is down 0.1 percentage points from last month’s forecast, and 3.5% in 2020.

Honduras Economy Data

Population (million)
GDP per capita (USD)2,3542,4622,5802,6472,774
GDP (USD bn)18.519.620.821.723.0
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)-1.90.612.3-6.87.5
Fiscal Balance (% of GDP)-7.9-4.3-3.0-2.8-2.7
Money (annual variation in %)8.513.18.112.912.4
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Benchmark Interest Rate (%)20.2820.65-  -  -  
Exchange Rate (vs USD)20.5921.6322.4523.1823.54
Exchange Rate (vs USD, aop)20.3821.1322.1022.8023.42
Current Account (% of GDP)-9.7-7.1-4.8-2.8-1.7
Current Account Balance (USD bn)-1.8-1.4-1.0-0.6-0.4
Trade Balance (USD billion)-3.1-3.0-2.9-2.6-2.6
Exports (USD billion)
Imports (USD billion)
Exports (annual variation in %)-
Imports (annual variation in %)-
International Reserves (USD)
External Debt (% of GDP)36.336.635.834.537.3

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Honduras Facts

Exchange Rate24.46-0.03 %Jun 13

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