IMF Staff Concludes Visit to Honduras

Press Release No. 16/66
February 19, 2016

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. This mission will not result in a Board discussion.

An International Monetary Fund (IMF) mission led by Mr. Roberto Garcia –Saltos visited Tegucigalpa during February 15-19 to review economic developments and authorities’ implementation of their Fund-supported program during 2015. At the conclusion of the visit Mr. Garcia –Saltos issued the following statement today:

“The mission is encouraged by the continued strengthening of the Honduran economy. Economy is projected to have grown at 3.6 percent in 2015, better than anticipated. This performance was driven by a recovery in U.S. growth, improved terms of trade, and strong remittances inflows, which helped Honduras sustain growth in consumption and investment –with strong growth in infrastructure spending. At the same time lower international fuel prices have pushed headline inflation to 2.4 percent by end-year, much lower than the central bank inflation target of 4.7 percent. These factors have also supported a US$307 million increase in Net International Reserves to US$2,783 million at end 2015—slightly above the program target—with gross reserves reaching 4.6 months of imports. Fiscal performance is also expected to have evolved better than programmed. Based on preliminary information, the fiscal position seems to have strengthened because of stronger revenue collection, mainly higher Value Added Taxation and income tax, and expenditure control, including the wage bill.”

“The 2016 outlook for the Honduran economy remains positive amid tighter global financial conditions. Real GDP growth is expected at about 3.5 percent and end-year inflation at 4 percent. Most of the structural reforms are moving forward. Tax administration is being strengthened, contributing to solid revenue growth and improved fiscal accounts. Building upon the medium-term fiscal framework introduced last year, the mission is encouraged by authorities’ commitment to maintain the course towards fiscal sustainability. In that sense, the mission welcomes the submission to congress of a fiscal responsibility legislation aimed to institutionalize fiscal discipline, which given the broad support for macroeconomic stability is expected to be approved soon. With regards, to the electricity sector, the mission encourages the authorities to ensure strong implementation of the plan to reduce electricity distribution losses, which have remained essentially unchanged from their 2014 level.

“The staff team met with Jorge Ramon Hernandez-Alcerro, Minister Coordinator of the Presidency, Head of the Economic Cabinet and Minister of Finance Wilfredo Cerrato, Central Bank Governor Manuel Bautista, Minister Director of the Tax Agency Miriam Guzman, President of the National Commission of Banking and Insurance Ethel Deras, Minister of Infrastructure and Public Services Roberto Ordoñez, Vice Minister of Public Credit and Investment Rocio Tábora and other senior government officials.

“The mission would like to thank the authorities for a fruitful and cordial dialogue, as well as for their excellent cooperation.”



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