Honduras Economic Outlook

February 18, 2020

The economy is likely to have lost momentum in the final quarter of last year, with growth in the monthly index measuring economic activity easing in October–November compared to the third quarter. In particular, the agriculture, manufacturing and retail sectors lost momentum relative to Q3. Furthermore, private-sector credit growth moderated somewhat in October–November. More positively, the merchandise trade deficit narrowed in November; however, this was reflective of limp domestic demand as imports contracted at the steepest rate in over three years, while exports were broadly flat. This follows a third quarter in which economic growth accelerated on the back of stronger public consumption growth amid an infrastructure push.

Honduras Economic Growth

Economic growth should shift into a higher gear this year as domestic demand strengthens amid a recovery in fixed investment. Moreover, a still-tight labor market and the extension of TPS of Hondurans living in the U.S. should underpin healthy private consumption. Volatile commodity prices and lingering political unrest, however, cloud the outlook. FocusEconomics Consensus Forecast panelists see the economy growing 3.0% in 2020, which is down 0.2 percentage points from last month’s forecast, and 3.2% in 2021.

Honduras Economy Data

	2014	2015	2016	2017	2018
Population (million)	8.8	9.0	9.1	9.3	9.4
GDP per capita (USD)	2,227	2,379	2,396	2,498	2,547
GDP (USD bn)	19.6	21.3	21.8	23.2	24.0
Economic Growth (GDP, annual variation in %)	3.1	3.8	3.9	4.8	3.7
Consumption (annual variation in %)	1.7	3.6	4.1	4.3	4.0
Investment (annual variation in %)	0.6	12.3	-7.4	9.2	5.4
Fiscal Balance (% of GDP)	-4.4	-3.0	-2.7	-2.7	-2.1
Money (annual variation in %)	13.2	7.8	15.8	13.4	7.2
Inflation Rate (CPI, annual variation in %, eop)	5.8	2.4	3.3	4.7	4.1
Inflation Rate (CPI, annual variation in %)	6.1	3.2	2.7	3.9	4.3
Benchmark Interest Rate (%)	20.65	20.02	18.79	18.24	17.43
Exchange Rate (vs USD)	21.63	22.08	23.20	23.54	24.27
Exchange Rate (vs USD, aop)	21.13	21.60	22.71	23.42	23.85
Current Account (% of GDP)	-7.0	-4.6	-2.6	-0.8	-5.3
Current Account Balance (USD bn)	-1.4	-1.0	-0.6	-0.2	-1.3
Trade Balance (USD billion)	-3.0	-2.9	-2.6	-2.7	-3.5
Exports (USD billion)	8.1	8.2	8.0	8.6	8.7
Imports (USD billion)	11.1	11.2	10.6	11.3	12.2
Exports (annual variation in %)	4.0	1.3	-3.2	8.6	0.3
Imports (annual variation in %)	1.2	0.8	-5.5	7.2	7.7
International Reserves (USD)	3.4	3.8	3.8	4.7	4.8
External Debt (% of GDP)	36.6	35.0	34.3	37.0	37.5

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Honduras Facts

	Value	Change	Date
Exchange Rate	24.59	-0.03 %	Jan 01

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