Press Release No. 12/43

Press Release No. 12/43
February 9, 2012

An International Monetary Fund (IMF) mission led by Mr. Przemek Gajdeczka visited Tegucigalpa during January 30-February 9 to conduct discussions under the Stand-By Arrangement (SBA) and Stand-By Credit Facility (SCF) approved by the IMF Executive Board in October 2010 (see Press Release No. 10/374). The authorities have considered the arrangements as precautionary and have not drawn on Fund resources. The mission met with President Porfirio Lobo, Vice-President Maria Antonieta de Bográn, Central Bank Governor Maria Elena Mondragón, Minister of Finance William Chong Wong and other senior government officials. At the conclusion of the visit, Mr. Gajdeczka issued the following statement:

“The mission reviewed recent economic developments, the performance of monetary and fiscal policies, and the progress in structural reforms envisaged under the government economic program for 2011. The mission noted achievements in economic growth and control of inflation and acknowledged significant progress in the structural reform agenda during 2011 and early 2012, in particular in public sector pension funds, taxation and education. The mission confirmed that the target deficit of the combined public sector was achieved, but noted that the deficit of the central government was higher than expected. In addition, the mission observed that the monetary targets under the program (net international reserves and central bank domestic assets) were not met.

“The mission updated the macroeconomic projections for 2012 and recommended to strengthen the economic policy framework. In particular, the mission recommended to continue improving liquidity control mechanisms and the operational framework for monetary policy; continue the process of fiscal consolidation by keeping expenditures under control, and improving budget management; and to implement ongoing structural reforms.

“The authorities reaffirmed their commitment to continue the consolidation of public finances and strengthening the monetary policy framework, and to advance implementation of ongoing structural reforms. The authorities and the mission reaffirmed their commitment to maintain the outstanding dialogue on economic policies established with President Lobo’s government.”