IMF Staff Concludes Visit to Honduras

IMF News, April 30, 2022

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IMF team led by Joyce Wong visited Tegucigalpa from April 27 to29 to discuss recent economic developments, the impact on the Honduran economy of the COVID-19 pandemic and the war in Ukraine, and the authorities’ reform plans.
The mission held meetings on the 2022 budget, public investment plans, debt management, electricity sector reforms, and monetary and financial policy.
The mission will not result in a Board discussion; views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.

Economic growth in Honduras reached 12.5 percent in 2021.
Recovery was led by strong remittances, which supported private consumption, and robust external demand boosted by the U.S. recovery.

The central bank’s reference range is 3 to 5 percent.
After remaining within that range for most of 2021, inflation breached the upper band in December and neared 7 percent y/y at end-March.
Inflationary pressures largely reflect supply side factors, together with some demand pressures from strong remittances and higher government spending.

Authorities expressed commitment to:
- protecting the vulnerable,
- combating poverty and migration,
- improving the management of public finances and investment execution,
- enhancing institutions and transparency.
Discussions laid important groundwork for further engagement with the Fund and continuing capacity development.

Heightened global risks and continuing shocks noted include the COVID-19 pandemic, tropical storms Eta and Iota, and the war in Ukraine.
The IMF team emphasized that, given the domestic context and heightened global risks, authorities must remain vigilant.
Policy priorities recommended:
- Protect the most vulnerable people,
- Preserve macroeconomic stability,
- Maintain fiscal discipline,
- Continue efforts to improve public financial management and transparency.

Press Release No. 22/137 — April 29, 2022