IMF and Honduras Reach Staff-Level Agreement on the First Review of the Economic Program under the Stand-by/Credit Facility Arrangement

IMF News, November 8, 2019

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Canonical URL: IMF and Honduras Reach Staff-Level Agreement on the First Review of the Economic Program under the Stand-by/Credit Facility Arrangement

Press Release No. 19/405; date: November 8, 2019.
An IMF team led by Mr. Esteban Vesperoni visited Honduras from October 28 to November 8 to conduct discussions on the First Review of Honduras’s IMF-supported program under the Stand-By Arrangement (SBA) and the Credit Facility Arrangement (CFA).
The mission reached a staff-level agreement on the first review of the economic program supported by a two-year Stand-by and Credit Facility arrangement.
The mission will not result in a Board discussion.
Mission contact: PRESS OFFICER: Maria Candia Romano. Phone: +1 202 623-7100. Email: MEDIA@IMF.org. @IMFSpokesperson.

Honduras has made important progress implementing its economic program aimed at fostering inclusive growth through:
- prudent macroeconomic policies;
- structural and governance reforms.
Recent dynamics:
- Honduras experienced a moderation in economic growth during the last quarters.
- Growth is expected to recover next year, in line with a better global environment.
Fiscal framework:
- Authorities continue to pursue prudent macroeconomic policies anchored by the Fiscal Responsibility Law.
- Authorities are working on expenditures reallocations to protect investment and social spending.
- Authorities remain committed to maintaining revenue mobilization efforts to preserve gains achieved over the past years.
Expected fiscal outcome:
- Strengthening the financial position in ENEE has the potential to create the needed fiscal space to protect infrastructure investment and social spending.

Authorities are making progress on an ambitious reform agenda with potential to raise the economy’s growth potential.
Electricity sector reform — notable advances in the initial phase:
- Strengthening of the regulatory agency.
- Creation of an independent system operator.
- Efforts by the new management of the public electricity company (ENEE) and the Secretary of Finance to improve governance and transparency in ENEE.
- Establishment of an electricity theft task force.
- These measures aim to reinforce the institutional framework for an open, competitive and transparent market in the electricity sector and a sustainable financial position in ENEE.
- Continued steadfast implementation of the reform plans in the sector remains essential.
Broader governance and business climate roadmap includes:
- Drafting the new central bank charter.
- Improving the budget process and the quality of public spending.
- Simplifying the regulatory framework.
- Developing reforms to foster transparency and advance the fight against corruption.

The mission held discussions with:
- President of the Republic Juan Orlando Hernández;
- President of Congress Mauricio Oliva;
- Magistrates of the Court of Accounts;
- Members of the economic cabinet;
- Other senior officials and representatives of civil society, the private sector and the international community.
The mission expressed appreciation for the authorities and counterparts for excellent discussions and hospitality.

International Monetary Fund — Press Release No. 19/405, November 8, 2019.