The mountains in Honduras

Honduras Economic Forecast

Honduras Economic Outlook

Having expanded at an annual rate of 1.9% in the first quarter, the economy should pick up in Q2: Average annual economic activity growth in the quarter was above Q1’s average. Private consumption likely performed well in the quarter due to softening price pressures and strong remittances growth amid a robust U.S. labor market. In addition, merchandise exports rebounded year on year in Q2. That said, the rebound was weak, hinting at a drought-induced decrease in agricultural output. In Q3, annual GDP growth is projected to lose some momentum from Q2 projections due to the deceleration of the U.S. economy capping exports and remittance inflows. In other news, on 11 August, the IMF granted the country USD 830 million in credit. The three-year deal aims to support fixed investment and ensure macroeconomic stability.

Honduras Inflation

Inflation came in at 5.7% in August, up from 5.1% in July. Our panelists see inflation averaging lower this year than last but remaining above the Central Bank’s target range of 3.0–5.0%. Drought conditions, exacerbated by El Niño, and an increase in international oil prices are expected to intensify inflationary pressures in the second half of the year.

This chart displays Economic Growth (GDP, annual variation in %) for Honduras from 2013 to 2022.

Honduras Economic Data

2018 2019 2020 2021 2022
Population (million) 9.6 9.8 9.9 10.1 10.3
GDP (USD bn) 24.1 25.1 23.8 28.5 31.7
GDP per capita (USD) 2,505 2,570 2,397 2,815 3,079
GDP (HNL bn) 575 615 586 684 777
Economic Growth (Nominal GDP, ann. var. %) 5.9 6.9 -4.7 16.8 13.5
Economic Growth (GDP, ann. var. %) 3.8 2.7 -9.0 12.5 4.0
Domestic Demand (ann. var. %) 5.5 -0.2 -8.6 19.3 3.7
Private Consumption (ann. var. %) 5.5 4.7 -6.2 15.1 5.0
Government Consumption (ann. var. %) 1.0 1.7 2.9 8.5 0.8
Fixed Investment (ann. var. %) 7.3 -5.2 -23.8 33.3 -0.7
Exports (G&S, ann. var. %) 1.4 2.4 -20.8 21.5 5.8
Imports (G&S, ann. var. %) 4.5 -2.4 -18.5 33.0 4.8
Unemployment (% of active population, aop) 5.6 5.4 10.9 8.6 -
Fiscal Balance (% of GDP) -2.1 -2.5 -7.0 -5.1 -1.3
Public Debt (% of GDP) 42.4 42.9 52.7 50.3 50.0
Money (ann. var. of M3 %) 8.1 10.7 18.6 9.7 13.0
Inflation (CPI, ann. var. %, eop) 4.2 4.1 4.0 5.3 9.8
Inflation (CPI, ann. var. %, aop) 4.3 4.4 3.5 4.5 9.1
Policy Interest Rate (%, eop) 5.50 5.50 3.00 3.00 3.00
Exchange Rate (HNL per USD, eop) 24.30 24.62 24.11 24.33 24.62
Exchange Rate (HNL per USD, aop) 23.91 24.49 24.58 24.03 24.50
Current Account Balance (USD bn) -1.6 -0.7 0.7 -1.3 -1.0
Current Account Balance (% of GDP) -6.6 -2.6 2.8 -4.6 -3.2
Merchandise Trade Balance (USD bn) -3.8 -3.4 -2.6 -4.9 -5.4
Merchandise Exports (USD bn) 8.6 8.8 7.7 10.2 12.2
Merchandise Imports (USD bn) 12.5 12.1 10.3 15.1 17.6
Merchandise Exports (ann. var. %) -0.1 1.7 -12.6 33.0 19.1
Merchandise Imports (ann. var. %) 9.2 -2.5 -15.6 47.0 16.7
Foreign Direct Investment (USD bn) 1.0 0.5 0.4 0.7 0.8
Remittances (USD bn) 4.8 5.4 5.6 7.2 8.5
International Reserves (USD bn) 4.8 5.7 8.1 8.7 8.4
International Reserves (months of imports) 4.6 5.7 9.5 6.9 5.7
External Debt (USD bn) 9.3 9.8 11.1 11.6 11.8
External Debt (% of GDP) 38.6 39.0 46.8 40.7 37.2

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