Press Release: IMF Staff Concludes Visit to Honduras

IMF News, July 16, 2015

Source details

IMF mission led by Mr. Lisandro Ábrego visited Tegucigalpa during July 13-16 to review economic developments and the authorities’ implementation of their Fund-supported program during 2015.
The mission met with President Juan Orlando Hernández; Minister Coordinator of the Government Jorge Hernández Alcerro; Central Bank Governor and Head of the Economic Cabinet Marlon Tábora; Minister of Finance Wilfredo Cerrato; 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 issued a staff statement conveying preliminary findings; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.

Real GDP posted a growth rate of 4 percent in the first quarter of 2015.
Inflation was 3.6 percent in June, supported by the decline in fuels prices and appropriate macroeconomic policy management.
By end-June net international reserves (NIR) rose by over US$370 million compared to end-2014.
Reserve coverage increased to 4.5 months of imports.
Data for January-May shows a substantial improvement in the finances of the central government and the state electricity company (ENEE) compared to the same period in 2014, supporting a significant strengthening of the position of the non-financial public sector.
Spreads on external sovereign bonds have continued declining.

Real GDP growth is expected at 3.5 percent—slightly higher than previously anticipated.
End-year inflation is projected at 4¾ percent.
The deficit of the combined public sector is expected to be reduced to about 3 percent of GDP this year as targeted under the program.

Tax administration is being strengthened, contributing to solid revenue growth and the improvement in the fiscal accounts.
The authorities have developed a new medium-term fiscal framework, which is expected to guide budget formulation starting this year.
In the electricity sector, the new regulator (CREE) has been established and is expected to become operational over the coming months.
The mission encourages the authorities to accelerate efforts to reduce electricity distribution losses, which have remained essentially unchanged from their 2014 level.

The mission is encouraged by the continued strengthening of the Honduran economy and notes that available information through May bodes well for the achievement of the program’s June fiscal targets.
The mission thanked the authorities for a fruitful and cordial dialogue, as well as for their excellent cooperation and hospitality.

Source: Press Release No. 15/339, July 16, 2015.