## Honduras's New Economic Plan for Stability and Growth

_IMF News, July 19, 2019_

## Source details

**Canonical URL:** [Honduras's New Economic Plan for Stability and Growth](https://www.imf.org/en/news/articles/2019/07/17/na071819-honduras-new-economic-plan-for-stability-and-growth)

## Other formats

- [Markdown version](/en/news/articles/2019/07/17/na071819-honduras-new-economic-plan-for-stability-and-growth/index.md)
- [Structured JSON version](/en/news/articles/2019/07/17/na071819-honduras-new-economic-plan-for-stability-and-growth/index.json)
- [Bundle manifest](/en/news/articles/2019/07/17/na071819-honduras-new-economic-plan-for-stability-and-growth/bundle-manifest.json)

## Bibliographic details
- Published: July 19, 2019

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### Progress since the 2014–17 IMF-supported program
- Honduras completed its IMF-supported economic program in December 2017 and has "made significant progress in restoring economic stability and laying the groundwork for sustainable growth."
- Remaining challenges identified:
  - High poverty.
  - A large informal labor market.
  - Strong dependence on agriculture.
  - Violence that continues to challenge economic growth.
  - Deteriorating financial situation of the public electricity company, which has strained public finances.
- The authorities maintained prudent policies with a low fiscal deficit that "over-performed the targets in the Fiscal Responsibility Law over the last years."

### IMF support request and terms
- Honduras has requested US$311 million in IMF support to foster its reform agenda and promote inclusive growth.
- The authorities plan to treat the financing as precautionary; they are not planning to draw on it.

### Objectives and key elements of the new economic plan
- Overall aims:
  - Make the economy strong and stable.
  - Protect the most vulnerable.
  - Support jobs and growth that benefit all.
- Key elements listed in the plan:
  - Securing the fiscal position by placing the public electricity company on a sustainable path through reforms in the electricity sector and through measures to maintain spending room in the budget for investment and social spending.
  - Strengthening the monetary policy framework to buffer shocks and maintain stability.
  - Implementing reforms to improve the business environment and governance, including stepping up efforts in the fight against corruption.

### Protecting social spending and targeted interventions
- Fiscal strategy:
  - Bold reforms for the public electricity company’s finances plus efforts to uphold previous revenue mobilization achievements are intended to maintain space for social spending.
  - The fiscal program defines priority spending that will be protected going forward.
- High-impact interventions aimed at alleviating poverty and fostering inclusive growth include:
  - Criando con Amor
  - Mejores Familias
  - Ciudad Mujer
- Policy focus: alleviate poverty, foster investment in human capital, and support women entrepreneurship and participation in labor markets.

### Policies to increase women's participation in the formal labor market
- Current benchmark: women comprise 46 percent of the total working population in the formal labor market.
- Plan measures to support more women in the workforce:
  - Supporting childcare services.
  - Facilitating credit for women.
  - Supporting women with young children.
- These measures combine new programs with expansion of ongoing initiatives to promote women entrepreneurship and improve access to education and labor market opportunities.

### Governance, transparency, and anti-corruption reforms
- Planned reforms aim to:
  - Improve governance and transparency in public finance management.
  - Strengthen the monetary policy operational framework.
  - Reform the electricity sector.
- Efforts with staff and development partners to implement reforms to enhance the rule of law, with objectives to:
  - Prevent misuse of public funds.
  - Improve the business climate.
  - Simplify procedures in public administration to reduce red tape and discretion that can give place to corruption.

*Honduras's New Economic Plan for Stability and Growth — July 19, 2019*

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## References

- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [PRESS CENTER](http://presscenter.imf.org/)
- [latest economic review](https://www.imf.org/en/Publications/CR/Issues/2019/07/18/Honduras-Staff-Report-for-the-2019-Article-IV-Consultation-and-Request-for-a-Stand-By-48509?sc_mode=1)
- [Read the press release](https://www.imf.org/en/News/Articles/2019/07/16/pr19284-honduras-imf-executive-board-approves-stand-by-arrangement-and-standby-credit-facility)
- [Honduras and the IMF](https://www.imf.org/en/Countries/HND)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2019/07/17/na071819-honduras-new-economic-plan-for-stability-and-growth_