IMF Staff Concludes Fifth and Sixth Reviews Mission to Honduras

September 15, 2017

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

An International Monetary Fund (IMF) mission, led by Roberto Garcia-Saltos, visited Tegucigalpa during September 11-14 to conduct the fifth and sixth reviews of Honduras’ Fund-supported program. At the conclusion of the visit, Mr. Garcia-Saltos issued the following statement in Tegucigalpa today:

“Honduras’ economic program with the IMF remains on track, with strong ownership and implementation by the government. The government met all performance criteria for end-June 2017. The completion of the final fifth and sixth reviews is subject to approval by the IMF’s Management and Executive Board, which plan to consider them later in the year. While the program is set to expire in December 2017, the current achievements underpin higher and more stable economic growth with improved social conditions.

“The mission revised up the outlook for 2017 with real GDP growth now expected at 4 percent (3.5 percent originally), driven by private consumption—amid remittances growth—as well as by exports and investment. Appropriate macroeconomic policies through August have kept observed and expected inflation in line with the announced inflation target of 4±1 percent. The external current account deficit is expected to widen only marginally to 4 percent of GDP as strong exports, particularly of coffee, and remittances growth largely offset the higher oil import prices. Appropriate monetary policy, sustained FDI flows and the government’s Eurobond issuance resulted in the accumulation of US$500 million in international reserves to US$3.2 billion through end-June 2017, with adequate reserve coverage of about 5 months of imports. The external financing conditions have improved further after the recent credit rating upgrade.

“The mission supports the authorities’ decision to set their own targets for end-2017.These will not undergo a formal IMF review but signal the government’s commitment to pursue a sound macroeconomic policy management after the program expires. The quantitative targets include ceilings for the fiscal deficit that are in line with the Fiscal Responsibility Law, a floor on social spending, a floor on the accumulation of international reserves and appropriate policies to boost growth-enhancing social and infrastructure spending by the government.

“The mission team met with Minister Coordinator of the Presidency, Jorge Ramon Hernandez-Alcerro, Head of the Economic Cabinet and Minister of Finance Wilfredo Cerrato, Central Bank Governor Manuel Bautista, Minister Secretary of the Council of Ministers Ebal Diaz, Minister Director of the Tax Agency Miriam Guzman, President of the National Commission of Banking and Insurance Ethel Deras, Vice Minister of Public Credit and Investment Rocio Tábora and other senior government officials as well as with representatives of the private sector.

“The mission would like to thank the authorities and private sector representatives for a cordial and productive dialogue, as well as for their excellent cooperation and hospitality.”

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