Economic impacts of pandemic will endure in Honduras

Significance

Hurricanes Eta and Iota, which struck Honduras in quick succession in the first half of November, took a severe toll on the agriculture sector, which accounts for more than 10% of the country’s GDP.

Impacts

• Corruption scandals, unemployment and poverty will fuel social discontent, raising risks of protests and instability.
• Low demand and a sluggish economic recovery will keep inflation within the Central Bank’s target of around 5.5%.
• According to the Central Bank, the percentage of citizens living in poverty could increase from 60% to 75% thanks to the pandemic.
• Remittance inflows will benefit from the new US government’s migrant policies, particularly if there is a reduction in US deportations.