IMF Executive Board Concludes 2019 Article IV Consultation with Honduras

  • On July 1, 2019, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Honduras. At the same time, the Board approved two-year arrangements under the Stand-By Arrangement (SBA) and Standby Credit Facility (SCF) for Honduras;
  • Macroeconomic conditions in Honduras remained stable in 2018. GDP growth slowed to 3.8% last year due to weaker terms of trade but remained close to potential, supported by private consumption amid strong growth in remittances.
  • Inflation is stable around the center of the central bank´s 4±1 percent target band. Owing to lower coffee prices and higher oil prices. The current account widened to 4.3% of GDP but stayed close to its historical average. The financial system is stable, liquid, and well-capitalized, with NPLs at historic lows.
  • In this context, while growth is projected to slow down to slightly less than 3.5% in 2019—mainly owing to still weak terms of trade—reforms in the electricity sector, improved governance, and the continued strengthening of the macroeconomic policy framework would secure debt sustainability and support a recovery in investment; and positive confidence effects would foster GDP growth.

 (Source: IMF)