Honduras Raises Debt Issue to $1 billion

If the additional tranche of $250 million approved by Congress is placed, the country's debt level will rise to over 40% of GDP.

Monday, December 9, 2013

Honduras's fiscal deficit will go from yellow to red alert if the government decides to issue $250 million more in debt bonds on the international market.

This amount, in addition to the $500 million already issued, will be used to finance the payment of the domestic debt and the general budget of revenues and expenditures of the Republic, explained Francisco Rivera, chairman of the Budget Committee of the Legislature to Laprensa.hn.

Review article : "According to calculations by Raul Reina, economic analyst , the new tranche sovereign bond represents an increase of 3 %, which means that Honduras would be reaching 42%."

"That means that the maneuverability of the Honduran State to borrow will be increasingly compromised, especially because it is not borrowing for productive investment projects. It has already exceeded 40% of GDP which is the standard level of borrowing for an emerging economy," said Reina.

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