Honduras Economic Outlook

March 12, 2019

The economy should have accelerated in Q4 2018, powered by private sector activity as reflected by the monthly economic activity index for October–November. However, the external sector likely dragged on economic growth. Monthly data suggests the trade deficit increased by nearly a fifth in 2018, partly due to a drop in coffee prices and a higher import bill. Looking at Q1 2019, data paints a mixed picture. Coffee prices remained low and dropped sharply in late-February, which bodes ill for the external sector’s performance. In contract, family remittances grew strongly in year-on-year terms in January.

Honduras Economic Growth

The economy should continue growing robustly this year, driven by resilient domestic demand. However, commodity price volatility present a downside risk to the outlook. The ending of Hondurans’ TPS in the U.S.—scheduled for 2020—could dampen remittances inflows next year. FocusEconomics Consensus Forecast panelists see the economy growing 3.7% in 2019, down 0.1 percentage points from last month’s forecast, and 3.5% in 2020.

Honduras Economy Data

	2013	2014	2015	2016	2017
Population (million)	7.8	8.0	8.1	8.2	8.3
GDP per capita (USD)	2,354	2,462	2,580	2,647	2,774
GDP (USD bn)	18.5	19.6	20.8	21.7	23.0
Economic Growth (GDP, annual variation in %)	2.8	3.1	3.8	3.8	4.8
Consumption (annual variation in %)	3.7	1.7	3.6	4.3	4.3
Investment (annual variation in %)	-1.9	0.6	12.3	-6.8	7.5
Fiscal Balance (% of GDP)	-7.9	-4.3	-3.0	-2.8	-2.7
Money (annual variation in %)	8.5	13.1	8.1	12.9	12.4
Inflation Rate (CPI, annual variation in %, eop)	4.9	5.8	2.4	3.3	4.7
Inflation Rate (CPI, annual variation in %)	5.2	6.1	3.2	2.7	3.9
Benchmark Interest Rate (%)	20.28	20.65	-	-	-
Exchange Rate (vs USD)	20.59	21.63	22.45	23.18	23.54
Exchange Rate (vs USD, aop)	20.38	21.13	22.10	22.80	23.42
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)	7.8	8.1	8.2	7.9	8.7
Imports (USD billion)	11.0	11.1	11.2	10.6	11.3
Exports (annual variation in %)	-6.6	4.0	1.3	-3.5	9.3
Imports (annual variation in %)	-3.7	1.2	0.8	-5.5	7.2
International Reserves (USD)	3.1	3.4	3.7	3.8	4.7
External Debt (% of GDP)	36.3	36.6	35.8	34.5	37.3

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Honduras Facts

	Value	Change	Date
Exchange Rate	24.37	-0.03 %	Mar 11

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