In a worst case scenario, debt could climb to 50% of GDP within 2 years.
According to economist Thelmo Vargas, a partner at the consulting firm Ecoanálisis, the forecast is of a base scenario in which interest rates are 5%, the economy grows at a rate of 4% and a primary deficit of 3% is registered for production.
"However, in a scenario with more pessimistic assumptions, Government obligations could grow from 38.7% of GDP expected for 2013 to 50.3% of production in 2015," noted an article in Elfinancierocr.com.
The new finance minister has announced plans to restructure Honduras’ public debt of about $5.8 billion, almost all of it in short-term format, with high interest rates.
Honduras is facing a severe debt problem which could become a disaster for their public finances.
Public debt, external and internal, had reached $5.772 billion up to December 31st, 2011 .
The country's economy, which has not yet recovered from the crisis of 2008, will suffer from a deficit for which the government can not find effective solutions.
The unbridled growth of government spending in recent years, growth which has only just been moderated, has brought the fiscal deficit to 5% of GDP annually. The proposed tax reform that President Chinchilla presented to the Costa Rican Assembly is not only a legal and political quagmire, but if approved, would not solve the problem of the public deficit, because of the cuts made to the original project.