Honduran Government should establish policies to deal with crisis

Former minister of Finance, A. Alvarado, recommended that the Government redesign its monetary and fiscal policy in order to deal with the impact of the US financial crisis.

Wednesday, October 1, 2008

There is a huge deficit in the balance of payments and inflationary problems and in the long term this means that we should establish a monetary and fiscal policy that is more conservative, he suggested.
We have to reduce the liquidity in the economy. There will probably be a drop in credit being offered to the various sectors and an increase in the interest rates but at the same time we should be revising the fiscal policy.

More on this topic

Bailout Plan for Honduras

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Just as several European countries have done, Honduras must prepare itself to ask for a bailout.

This was the suggestion made by the Social Forum of Honduran External Debt (Fosdeh) during the spring meetings of the International Monetary Fund (IMF) and World Bank (WB). According to Mauricio Diaz, Fosdeh coordinator, "we are still making recommendations, and we have just done so to the IMF and the WB, the general idea is that we have to prepare a rescue plan."

FMI: Central America Outlook

October 2010

Slow recovery tied to a lagging U.S. economy, 3% growth in 2010 due to increased domestic consumption and rising remittances and international trade.

The countries in Central America are recovering gradually, led by a rebound indomestic demand (following its sharpcontraction in 2009), which has partly spilled over into imports.

Fiscal situation worsens in El Salvador

January 2009

The IMF report recommends maintaining fiscal austerity and greater supervision of the financial sector.

Elsalvador.com reports that "the fiscal situation in El Salvador had improved in 2007, but it got worse in 2008 mainly as a consequence of the rise in fuel prices which impacted the public purse because of the subsidies, the IMF explained in results called "Chapter IV Consultations" from November 12, 2008.

The Lehman effect on Costa Rica

September 2008

Analysts and economic gurus are forecasting a dark future for the Costa Rican economy, after the failure of Lehman Brothers.

Things could get worse with the announce on Sunday of the sudden sale of Merrill Lynch, in which the Central Bank of Costa Rica probably has some assets, to Bank of America.

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