Honduras Economic Forecast

Honduras Economic Outlook

July 14, 2020

The economy contracted in the first quarter for the first time in over a decade, hit by fallout from the global pandemic and associated containment measures, and will have deteriorated further in the second quarter. Nosediving fixed investment drove the downturn in Q1 as businesses postponed expansion plans. Moreover, the external sector struggled too, with exports and imports plunging. Turning to available data for Q2, economic activity contracted in April by over a fifth compared to the same month a year prior. In the same month, imports fell by nearly a third and suggest the continuation of weak domestic demand, while exports fell amid a drop in foreign demand due to global lockdown measures. While the gradual reopening of the economy since early June should provide some respite, the recent lockdown of Tegucigalpa highlights the risk of an intensification of the health crisis.

Honduras Economic Growth

GDP is expected to shrink at the steepest rate in decades amid the fallout from the health crisis, with the pandemic weighing on trade, tourism and domestic demand. Inbound remittances are expected to take a blow due to the uncertain outlook in the U.S., boding ill for household spending. A possible prolonged outbreak further clouds the outlook. FocusEconomics Consensus Forecast panelists see the economy contracting 4.2% in 2020, which is down 1.4 percentage points from last month’s forecast, and growing 3.3% in 2021.

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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