Economy in Honduras

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Economy—overview:  1994 the REINA administration inherited an economy in the grips of stagflation due to  unprecedented energy crisis declining agricultural output and extravagant public expenditures. In

the REINA administration cut the fiscal deficit and enacted a number of structural reforms including passage of a modern  sector reform law in 1995  a central bank reform law in 1996. As a result Honduras finished 1997 with improved GDP growth and a decreasing rate of inflation. The newly elected administration faces pressure from the international financial community and the IMF to further decrease the fiscal deficit  implement key reforms including the privatization of state enterprises such as Hondutel. Tegucigalpa will probably implement tighter fiscal and monetary policies to keep inflation low and meet commitments to the IMF. s  slow GDP growth to 3.5% in 1998. Moreover wage increases for  employees agreed to in 1997  make it difficult for FLORES to  headway on the fiscal deficit and inflation.

GDP: purchasing  parity—$12.7 thousand (1997 est.)

GDP—real  rate: 4.5% (1997 est.)

GDP—per capita: purchasing power—$2 200 (1997 est.)

GDP—composition 

agriculture: 20%

industry: 19%

services: 61% (

Inflation rate—consumer price index: 15% (

total: 1.3 million (1997 est.)

by occupation: agriculture 62% services 20% manufacturing 9% construction 3% other 6% (1985)

Unemployment rate: 6.3% (1997); underemployed 30% (1997 est.)

Budget:

revenues: $655 million

expenditures: $850  including capital expenditures of $150 million (1997 est.)

Industries: sugar coffee textiles clothing wood products

Industrial production growth rate: 10% (1992 est.)

Electricity—capacity: 305 000 kW (1995)

Electricity—production: 2.8 billion kWh (1995)

Electricity—consumption per capita: 516 kWh (1995)

Agriculture—products: bananas coffee citrus; beef; timber; shrimp;

Exports:

total value: $1.3 billion (f.o.b. 1996)

commodities: bananas coffee shrimp lobster minerals meat lumber

partners: US 54% Germany 7% Belgium 5% Japan 4% Spain 3% (1995)

Imports:

total value:  (c.i.f. 1996)

commodities: machinery and transport equipment industrial raw materials chemical products manufactured goods fuel and oil foodstuffs

partners: US 43% Guatemala 5% Japan 5% Germany 4% Mexico 3% El Salvador 3% (1995)

Debt—external: $4.1 billion (1995)

Economic aid:

recipient: ODA $NA

Currency: 1 lempira (L) = 100 centavos

Exchange rates: lempiras (L) per US$1 (end of period)—13.1332 (January 1998) 13.0942 (1997) 12.8694 (1996) 10.3432 (1995) 9.4001 (1994) 7.2600 (1993)

 

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