Arguing that the current account deficit has been reduced, and that inflation remains within the target range, the International Monetary Fund approved the first revision of the Stand-By 2019-2021 agreement.
From the press release by IMF:
On December 18, 2019, the Executive Board of the International Monetary Fund (IMF) completed first reviews of Honduras’ performance under an economic program supported by a two-year Stand-By Arrangement (SBA) and a two-year arrangement under the Standby Credit Facility (SCF). This program was approved on July 15 th, 2019 in the amount of about US$ 309.2 million (SDR 224.8 million), the equivalent of 90 percent of Honduras quota in the IMF (see Press Release 19/285 ).
Arguing that the medium-term forecasts indicate that the inflation trajectory will remain above the tolerance range, the BCH decided to raise the Monetary Policy Rate by 0.25%.
From the BCH press release:
January 4th, 2019. In ordinary session No.158-10-12/2018, the Open Market Operations Commission (COMA) of the Central Bank of Honduras (BCH), analyzed the recent evolution and perspectives for the main macroeconomic and financial indicators, at domestic and international levels.
The Central Bank projects that the Honduran economy will grow between 3.8% and 4.2% this year, and that inflation will remain in the range of between 3% and 5%.
The Central Bank details in its report that "...According to projections for the world and national economy, the BC's forecasts indicate that domestic inflation for 2018-2019 will be within the tolerance range of 4.0% ± 1.0 pp."
The Central Bank has reported that in the third quarter of the year the Gross Domestic Product registered an interannual increase of 6.5%, mainly explained by the manufacturing industry and the agricultural sector.
From the quarterly report by the Central Bank:
DURING THE III QUARTER OF 2017 ECONOMIC ACTIVITY CONTINUED REGISTERING DYNAMISM HAVING GROWN 2.0%
In its review of the monetary program, the Central Bank has raised the expected economic growth rate for the biennium 2017-18, from 3.4% - 3.7%, to 3.7% - 4.1%.
From the executive summary of the report "Review of the 2017-18 monetary program" by the Central Bank:
The Board of Directors of the Central Bank of Honduras (BCH), in fulfillment of its powers, presents the Monetary Program (MP) Review 2017-2018 published in March of this year. This document contains an update of the macroeconomic framework for the aforementioned biennium, adapting it to thefirst half of year of the international and domestic economy, as well as to the latest perspectives on the world economy.
Considering the international context and the recent performance of the national economy, the Central Bank has decided to reduce the monetary policy rate from 5.75% to 5.50%.
From a statement issued by the Central Bank:
The Commission on Open Market Operations (COMA) at the Central Bank of Honduras (BCH), in ordinary meeting No.128 on June 14, 2016, discussed the recent developments and prospects for the main macroeconomic and financial indicators, at the national and international level.
A World Bank analysis indicates how the vicious circle of crime, violence and low growth is limiting competitiveness, discouraging entrepreneurship and investment.
From the document "Unlocking economic potential for greater opportunities" by the World Bank:
Honduras’ history of low and volatile economic growth and high inequality have created the conditions for the emergence of two mutually reinforcing cycles: (i) a high crime-low growth cycle; and (ii) an emigration/remittance flows-low growth cycle. Over the last 15 years these cycles have shaped the challenges faced by Honduras and have continued to impact the country’s growth prospects.
The report "Social Panorama of Latin America" makes clear that declines in poverty rates are directly related to the rate of growth in revenue and are not the result of distribution policies.
The recent report published by Cepal, called "Social Panorama of Latin America" highlights countries which reduced poverty levels through improved income, not redistribution of that income, as is the case of Panama, Colombia and even Uruguay, which was the country that best fought poverty between 2010 and 2014. The report explains that the general improvement in that period was mainly due to changes in average incomes.
A government proposal seeks to generate in 5 years $13,000 billion worth of investment in tourism, textiles, intermediate manufacturing and business support services.
From a statement issued by the President of Honduras:
Tegucigalpa, February 29. President Juan Orlando Hernández presented the National Economic Development Program 20/20 Honduras, the largest platform for growth promoted in the country's history, focusing on tourism, textiles, intermediate manufacturing and business support services, which will generate 600,000 jobs in five years, among other objectives.
Economic growth will range between 3.3% and 3.7% in 2016, led by banking, communications, agriculture, manufacturing, and recovery in the construction sector.
From a statement issued by the Central Bank:
The Board of the Central Bank of Honduras (BCH) in fulfilling its tasks, on February 17, 2016 by Resolution No.56-2 / 2016, approved the 2016-2017 Monetary Programme, which contains guidelines and policy actions, related to credit and exchange in the country, to be implemented in this biennium, based on the recent national macroeconomic performance and behavior and outlook for the world economy.
In July, the economy grew at 3.4%, above the growth rate of 2.7% recorded in the same month in 2014.
Monthly Economic Activity report by the Central Bank of Honduras:
Honduran Economy
In July 2015, domestic production, measured by the IMAE original series showed a variation of 3.4%, higher than that reported in the same month in 2014 (2.7%). For its part, the cycle trend showed a variation of 3.1.
The Central Bank has raised economic growth projections for this year from 3% to 3.5% and revised down the inflation expectations from 5.5% to 4.75%.
From a statement issued by Banco Central de Honduras:
The Central Bank of Honduras (BCH) in fulfilling its tasks approved; in February 2015, the Monetary Programme 2015-2016 (PM), in which it estalished the monetary policy measures to be implemented in the stated period, in order to ensure the maintenance of the internal and external value of the national currency.
The entity has emphasized improvements in macroeconomic terms, but warns of damage to the economy caused by only one in five Hondurans working in the formal sector.
From a statement issued by the World Bank:
TEGUCIGALPA, June 10, 2015 - Between 2003 and 2013 employment in Honduras grew at an annual rate of 5.1 percent, surpassing the country's population growth and increasing faster than in other Central American economies.
The economy registered a growth of 3.9%, mainly due to the performance of the sectors of Insurance and Pension Funds, Agriculture and Manufacturing.
From a report by the Central Bank of Honduras:
In January 2015, the national economy, monitored through the Monthly Index of Economic Activity (IMAE) in the original series, recorded annual change of 3.9% (1.8% in the same month in 2014).
In order to sustain the pace of local economic growth, the Central Bank has decided to reduce the monetary policy rate from 6.75% to 6.50%.
From a statement issued by Banco Central de Honduras:
The Committee on Open Market Operations (COMA) at the Central Bank of Honduras (BCH), in regular session No.117 on March 17, 2015, analyzed the recent performance and prospects for the main macroeconomic and financial indicators, both at the national and international level.