Honduras Economic Outlook
A mixed economic performance:
Honduras is one of the poorest countries in Latin America, with a GDP of around $30 billion and a per capita income well below the regional average. The economy has grown at a moderate pace in recent decades, averaging around 3–4% annually. However, high levels of poverty, inequality, and violence have hindered broader economic development. The country was severely impacted by the COVID-19 pandemic, contracting by 9% in 2020 before recovering with 12.5% growth in 2021.
Remittances and agriculture drive the economy:The Honduran economy is highly dependent on remittances, which account for nearly 25% of GDP, primarily sent from Hondurans working in the United States. These inflows support domestic consumption and help stabilize the currency. Beyond remittances, agriculture remains a key sector, with major exports including coffee, bananas, and shrimp. However, the country remains vulnerable to climate shocks, such as hurricanes and droughts, which frequently disrupt agricultural output.
Manufacturing and investment challenges:The country has a growing maquiladora (assembly-for-export) industry, particularly in textiles and apparel, benefiting from trade agreements like CAFTA-DR, which provides preferential access to the U.S. market. However, foreign direct investment remains subdued due to governance concerns, corruption, and inadequate infrastructure. Efforts to develop the energy and tourism sectors have been slow, and a large informal economy—accounting for over 70% of employment—limits tax revenue collection and productivity gains.
Governance issues and security concerns:Honduras has long struggled with political instability and one of the highest crime rates in the world, driven by gang violence and drug trafficking. The election of President Xiomara Castro in 2021 marked a political shift, but economic policy uncertainty, particularly regarding energy subsidies and business regulations, has weighed on investor confidence. Despite some improvements in governance, corruption and weak institutions remain major barriers to economic progress.
Honduras’ economic outlook:The Honduran economy is expected to grow at a steady but modest pace of around 3–4% in the coming years, driven by remittances, exports, and infrastructure projects. However, long-term growth prospects remain constrained by structural weaknesses, including poor governance, insecurity, and vulnerability to external shocks. Addressing these challenges through institutional reforms, investment in human capital, and diversification beyond remittance-fueled consumption will be crucial for sustainable development.
Honduras' Macroeconomic Analysis:
Nominal GDP of USD 37.0 billion in 2024.
Nominal GDP of USD 34.4 billion in 2023.
Nominal GDP of USD 37.0 billion in 2024.
GDP per capita of USD 3,472 compared to the global average of USD 10,589.
GDP per capita of USD 3,472 compared to the global average of USD 10,589.
GDP per capita of USD 3,281 compared to the global average of USD 10,589.
Average real GDP growth of 3.3% over the last decade.
Average real GDP growth of 3.4% over the last decade.
Average real GDP growth of 3.4% over the last decade.
Sector Analysis
In 2022, services accounted for 57.4% of overall GDP, manufacturing 15.3%, other industrial activity 15.3%, and agriculture 12.0%. Looking at GDP by expenditure, private consumption accounted for 86.4% of GDP in 2023, government consumption 14.4%, fixed investment 23.1%, and net exports -23.9%.International trade
In 2021, manufactured products made up 30.5% of total merchandise exports, mineral fuels 0.0%, food 62.0%, ores and metals 2.3% and agricultural raw materials 1.2%, with other categories accounting for 4.0% of the total. In the same period, manufactured products made up 64.6% of total merchandise imports, mineral fuels 14.5%, food 19.2%, ores and metals 0.4% and agricultural raw materials 1.4%, with other goods accounting for -0.1% of the total. Total exports were worth USD 11.10 billion in 2024, while total imports were USD 17.80 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 3.3% in the decade to 2023. To read more about GDP growth in Honduras, go to our dedicated page.
Fiscal policy
Honduras's fiscal deficit averaged 3.8% of GDP in the decade to 2023. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 6.9% in the decade to 2023. For more information on Honduras's unemployment click here.
Inflation
Inflation averaged 4.8% in the decade to 2024. Go to our Honduras inflation page for extra insight.
Monetary Policy
Honduras's monetary policy rate ended 2024 at 5.75%, down from 7.00% a decade earlier. See our Honduras monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the lempira weakened by 17.3% vs the U.S. dollar. For more info on the lempira, click here.
Economic situation in Honduras
Our panel hiked its forecasts for GDP in Q1 over the past month due to a stronger-than-expected external sector performance, and now expects economic growth to have picked up steam from Q4 2024 and outpaced the pre-pandemic decade average. In Q1, economic activity growth rose to a three-quarter high, with stronger crop yields and foreign demand fueling a recovery in the agricultural sector. In addition, goods exports and remittances inflows skyrocketed due to front-loading ahead of U.S. tariff hikes and mounting deportation concerns among Hondurans in the U.S., respectively. Shifting to Q2, our panelists have penciled in a slowdown, with activity likely feeling the pinch of rising protectionism in top trading partner the U.S. Moreover, remittances lost pace through May—despite still expanding by over 10%—due to a ramp-up in the U.S.’ deportation efforts.Honduras Economic Forecasts
Projections out to 2034.47 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 15 expert analysts.
Want to get insight on the economic outlook for Honduras in the coming years? FocusEconomics collects projections out to 2034 on 47 economic indicators for Honduras from a panel of 15 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Honduras economy. To download a sample report on the Honduras' economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.