Honduras Economic Forecast

Honduras Economic Outlook

October 13, 2020

Economic activity shrank a staggering 18.5% year-on-year in the second quarter due to the blow from Covid-19 and associated containment measures. The pandemic wreaked havoc across all sectors of the economy: Domestic demand was hit hard with household spending, public consumption and fixed investment all nosediving. Falling imports of goods and services further highlighted dented domestic demand, while lockdowns abroad and weakened trade flows hammered exports of goods and services. Turning to Q3, early data points to continued economic hardship: Economic activity fell steeply in July, while exports and imports nosedived and private-sector credit growth slowed in the same month. Meanwhile, the government tabled the 2021 draft budget in mid-September, with a focus on rekindling economic activity and strengthening the health sector. The fiscal shortfall is expected to remain elevated.

Honduras Economic Growth

The economy is set to contract steeply this year as the global health crisis and associated restrictions weigh heavily on domestic and foreign demand. Activity is forecast to recover next year as demand gradually picks up; however, the recovery will be partly due to a supportive base effect, with the balance of risks tilted to the downside. FocusEconomics Consensus Forecast panelists see the economy contracting 5.0% in 2020 before growing 3.4% in 2021, 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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