Honduran economic growth will slow

Significance

One of the major challenges for the government in the short term will be protecting the most vulnerable sections of the population from food insecurity, amid rising prices. Honduras already has some one of the highest rates of poverty and inequality in the Western Hemisphere.

Impacts

• Legal insecurity and high levels of corruption will continue to undermine investment prospects.
• Remittance inflows will continue to support household consumption and the country’s external accounts.
• Honduras will end 2022 with an external deficit; dynamic agricultural and manufacturing exports will not offset oil import costs.
• Ongoing implementation of the Dominican Republic-Central American Free Trade Agreement will help trade diversification in the medium term.
• Climate challenges will exacerbate poverty struggles, increasing the pressure on Hondurans to emigrate.