Honduras Economic Forecast

Honduras Economic Outlook

August 6, 2019

The economy likely continued to lose steam in the second quarter. The index of economic activity moderated in April–May from Q1. While activity in most sectors eased in May, there was a marked weakening in the mining and quarrying, and manufacturing sectors. In the same month, the merchandise trade deficit widened to the largest shortfall since January, as exports fell for the eighth-consecutive month and outweighed a marked drop in imports. Meanwhile, in mid-July, the IMF concluded its Article IV consultation. While the Fund praised the government for reducing macroeconomic imbalances and improving its policy framework, it also stressed the importance of addressing poverty and the informal economy. The IMF also approved a two-year USD 208 million standby arrangement, as well as a USD 104 million standby credit facility, both of which are designed to support the government’s reform agenda.

Honduras Economic Growth

Economic growth should decelerate this year amid prolonged popular protests. Softening private consumption and fixed investment are seen eating into domestic demand, while volatile commodity prices and uncertainty over U.S. aid and Hondurans’ temporary protected status cloud the outlook. FocusEconomics Consensus Forecast panelists see the economy growing 3.5% in 2019, which is unchanged from last month’s forecast, and 3.5% again in 2020.

Honduras Economy Data

20132014201520162017
Population (million)8.78.89.09.19.3
GDP per capita (USD)2,1342,2272,3252,3662,474
GDP (USD bn)18.519.620.821.622.9
Economic Growth (GDP, annual variation in %)2.83.13.83.94.8
Consumption (annual variation in %)3.71.73.64.14.3
Investment (annual variation in %)-1.90.612.3-7.49.2
Fiscal Balance (% of GDP)-7.9-4.4-3.0-2.7-2.7
Money (annual variation in %)8.313.27.813.313.9
Inflation Rate (CPI, annual variation in %, eop)4.95.82.43.34.7
Inflation Rate (CPI, annual variation in %)5.26.13.22.73.9
Benchmark Interest Rate (%)20.2820.6520.0218.7918.24
Exchange Rate (vs USD)20.5921.6322.4523.1823.54
Exchange Rate (vs USD, aop)20.3821.1322.1022.9923.65
Current Account (% of GDP)-9.5-7.0-4.7-2.6-1.8
Current Account Balance (USD bn)-1.8-1.4-1.0-0.6-0.4
Trade Balance (USD billion)-3.1-3.0-2.9-2.6-2.7
Exports (USD billion)7.88.18.28.08.6
Imports (USD billion)11.011.111.210.611.3
Exports (annual variation in %)-6.64.01.3-3.28.6
Imports (annual variation in %)-3.71.20.8-5.57.2
International Reserves (USD)3.13.43.83.84.7
External Debt (% of GDP)36.336.635.834.837.4

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Honduras Facts

ValueChangeDate
Exchange Rate24.46-0.03 %Jul 31

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