Following the IMF assessment, the country's macroeconomic conditions are expected to remain strong and growth is expected to be solid in coming years.
From the International Monetary Fund statement:
November 16th, 2018. An International Monetary Fund (IMF) team led by Esteban Vesperoni visited Tegucigalpa from November 12-16 to assess recent economic developments since the completion of the 2018 Article IV consultation in May and the medium-term outlook. At the end of the visit, Mr. Vesperoni issued the following statement:
The region is expected to conclude 2018 with a rise of just over 4% in the volume exported and just 3.6% in value, due to the fall in international prices of several agricultural products.
According to the International Trade Outlook for Latin America and the Caribbean 2018, published by the Economic Commission for Latin America and the Caribbean (ECLAC), it is expected that this year Central America will export larger volumes at lower prices.
Excessive regulation, increased tax charges and geopolitical uncertainty are the main risks to business growth in the region for Central American CEOs.
PricewaterhouseCoopers (PwC) conducted the Global CEO Survey in the Central American region, in which a group of business executives from Central American countries and the Dominican Republic shared their opinions about their economic expectations.
The Central Bank has revised down its year-on-year GDP growth forecast for 2018, from the range of 3.8% to 4.2%, projected at the beginning of the year, to a range of 3.6% to 4%, but has kept the projection of inflation unchanged.
From a statement issued by Banco Central de Honduras:
The Board of the Central Bank of Honduras (BCH), through Resolution No.336-8 / 2018, approves the Review of the Monetary Program (RPM) 2018-2019, which presents the update of the macroeconomic framework for the aforementioned biennium when incorporating the recent evolution of the national and international economic conjuncture, as well as the latest perspectives on the main macroeconomic and financial variables.
Entrepreneurs in the sector reported that for the 2017-2018 harvest the volume produced amounted to 11.6 million hundredweight, 2% more than what was registered in the previous harvest.
Representatives from the Association of Sugar Producers of Honduras (Apah) announced that between the harvests of 2016-2017 and 2017-2018, the country reported an increase of 200,000 hundredweight in the volume of production, going from 11.4 million to 11.6 million.
Due to the crisis affecting Nicaragua and paralysis of construction in Panama between April and May, the IMF has reduced the expectation of economic growth for the Central American region from 4% to 3.3%.
The International Monetary Fund (IMF) cut growth forecasts for the Central American economy, due to the uncertainty caused by the situation in Nicaragua and its effect on the region's economic activity, and the impact of the construction strike in Panama, which has halted works on 260 projects nationwide for the last 30 days.
Plant diseases such as rust in coffee plantations, added to an oversupply of sugar worldwide, explain some of the moderate expectations that entrepreneurs have for some of the most important agricultural products in the region.
Representatives of the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (Cacif) of Guatemala believe that the deceleration that has been registered in international prices of some raw materials and agro-industrial products suggest a decline in local production.
Despite a decrease reported in the export of Honduran palm oil in the first months of the year, better results are anticipated for the second half of 2018, due to a higher than expected volume in the harvest.
According to figures from the Central Bank of Honduras, in the first four months of the year the country registered $54 million in exports of palm oil and its fractions, a figure that is 34% lower than the value reported in the same period in 2017.
Authorities estimate that during 2018 some $350 million will be invested in public and private works, and that the sector could generate approximately 23 thousand new jobs.
According to the Honduran Institute of Tourism, investments are expected such as the cruise dock in Roatán and the construction of a hotel in San Pedro Sula.
The sector union foresees that for the 2017-2018 harvest foreign currency generated from sales abroad will fall by 14% with respect to the previous season.
Explained by a drop in the average price per hundredweight of exports, which fell from $145 in the 2016-2017 season to $123 so far in the current harvest, the Honduran Coffee Institute (Ihcafé) envisages a 14% decrease in income from sales abroad.
Due to climate effects, the Honduran union expects that around 40,000 less tons of sugar will be produced in the current season.
On top of the climate situation is also the fact that the price of sugar has been falling, partly explained by the abundant crops reported in places such as India.The result of this is that production costs in countries such as Honduras are reducing competitiveness of the crop.
A delegation of companies from the Mexican state of Jalisco has expressed interest in investing in sectors such as textiles, agriculture, services and construction.
After the visit to Honduras, the businessmen reported that in the next few years they intend to invest between $20 million and $100 million.
Miguel Landero, president of the Mexican Council of Foreign Trade, explained to Laprensa.hn that "... there is a lot of interest in investing in the country ...'In direct foreign investment we could be talking about an intention of $20 million to $100 million, just to start with'."
Following 2017's 5% increase in the arrival of foreign tourists, the authorities foresee an increase of 6% for this year.
Regarding the figures on domestic tourism, authorities in the sector estimate that last year this item generated an economic spillover of about $2.122 million, an amount that they aim to exceed in 2018.
Between February and March of this year the Confidence Index of Economic Activity rose from 46.5 to 46.9, registering an increase of just 1%.
According to the Survey on Macroeconomic Analysts' Expectations, prepared by the Central Bank of Honduras, during March the people consulted " ... stated that the country's economic situation has improved, evidenced in the macroeconomic variables at the end of 2017, which were very positive; they hope that the Government's fiscal discipline that favors control of spending will continue and that the approved tax reforms will stimulate investment and employment generation."
Representatives from the sector reported that during the first quarter of the year, 1,069 homes were built, which is equivalent to 14% of the total units that they plan to build this year.
According to the Honduran Chamber of Construction Industry (Chico), so far about $3.4 million has been invested in the construction of 1,069 homes, and to complete the 7,695 housing units planned, about $212 million will be disbursed in 2018.