Press Release: IMF Mission Reaches Agreement in Principle on a Stand-by Agreement for US$196 Million with Honduras
September 13, 2010Press Release No. 10/338
September 13, 2010
A staff mission from the International Monetary Fund (IMF) visited Tegucigalpa from September 7-10 to continue discussions on a new IMF arrangement in support of the Government’s economic program. Mr. Przemek Gajdeczka, the IMF’s mission chief for Honduras issued the following statement at the end of the mission, on September 10:
“I am pleased to inform that the mission has reached an agreement in principle with the Honduran authorities on an economic program through March 2012, to be supported by a US$196 million Stand-By Arrangement and Stand-by Credit Facility. The agreement reached with the authorities is subject to approval from the IMF’s management and Executive Board, who will consider the request for the agreement in early October.
“The program is geared at re-establishing macroeconomic stability, strengthening public finances, restoring investor confidence, and supporting economic recovery. The program will be anchored on the authorities’ efforts to establish control over the public finances, maintain prudent monetary policy, and undertake structural reforms to improve the efficiency of the public sector.
“On the public finances, the program aims at reducing fiscal imbalances while improving the composition of public spending, to give space for high priority investment and poverty-reducing outlays. To achieve these objectives, the authorities are committed to improve tax administration and collection; control current spending, including the wage bill; improve the targeting of social spending to the poor; and improve the financial position of key public enterprises and pension funds. In addition, the program aims at keeping inflation restrained, strengthen the international reserves position, and safeguard competitiveness. The program also seeks to improve banking supervision and strengthen buffers in the financial system. These policy actions will facilitate the restoration of macroeconomic stability and lay the foundations for sustained economic growth.”