flag Honduras Honduras: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Honduras' GDP grew by an estimated 4.9% in 2021, mainly boosted by higher remittances from expatriates in the U.S. and, by extension, household consumption. According to updated IMF forecasts, GDP growth is expected to slightly decrease to 4.4% in 2022 and to 3.5% in 2023. Still, a favourable trade scenario with the U.S. and remittances from expatriate workers is expected to continue to promote growth.

In 2021, government debt reached an estimated 58.9% of GDP, and it should slightly decrease to 58.6% and 55.5% in 2022 and 2023, respectively. The country's inflation rate increased in 2021, reaching 4.6%. Still, that rate should slightly decrease to 3.7% in 2022 before increasing to 4% in 2023. The Honduras government closed 2021 with an account deficit of 3%, which should slightly increase in the coming years, reaching 3.2% in 2022 and 3.5% in 2023. The overall economic outlook is positive, but a continued effort to improve social indicators is required. To mitigate the impact of COVID-19, the government continued implementing a series of fiscal measures in 2021, which included emergency health care expenditures; temporary unemployment benefits to formal workers, delivery of food supplies to poor families, cash transfers to informal workers, tax breaks for businesses maintaining employment at pre-pandemic levels, reduced advance payments in corporate income tax to provide cash flow relief to companies, temporary VAT exemptions for medical supplies, deferrals to the second half of 2020 and early 2021 for payments of income taxes and social contributions, and temporary freezes in prices of goods in the basic consumption basket. Although the pandemic had a significant impact on the Honduran economy, the measures implemented by the government in light of the crisis have been effective in boosting economic activity, which has been gradually recovering.

The country's unemployment rate reached an estimated 5.8% in 2021. While that rate increased due to the negative economic impacts of the COVID-19 pandemic, unemployment remained bellow the estimated IMF rate of 8%. Furthermore, unemployment should decrease to 5.2% in 2022 and 4.9% in 2023. Current GDP performance is insufficient to improve living standards for the nearly 65% of the population that live in poverty. Moreover, 39% of households in Honduras live in extreme poverty, and only 25% of them benefit from social security. Honduras also suffers from a high rate of criminality, which costs the country 10% of GDP according to the World Bank. Progress has already been made, though, as there has been a significant drop in homicides in the country in recent years. Migration is also an issue, as lower coffee production, financial adversity, and high crime rates drive farmers towards the United States.

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 23.8328.4930.5732.2633.60
GDP (Constant Prices, Annual % Change) -9.012.53.43.53.6
GDP per Capita (USD) 22233
General Government Gross Debt (in % of GDP) 52.450.20.00.00.0
Inflation Rate (%) 3.54.58.68.55.1
Current Account (billions USD) 0.68-1.22-1.39-1.39-1.39
Current Account (in % of GDP) 2.8-4.3-4.6-4.3-4.1

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
Honduras Lempira (HNL) - Average Annual Exchange Rate For 1 GHS 5.725.405.214.714.39

Source: World Bank - Latest available data.

 

Main Sectors of Industry

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 29.5 21.4 49.1
Value Added (in % of GDP) 12.1 26.0 58.3
Value Added (Annual % Change) -6.3 -14.3 -5.0

Source: World Bank - Latest available data.

 
Socio-Demographic Indicators 2022 (e)2023 (e)2024 (e)
Unemployment Rate (%) 4.64.64.6

Source: IMF – World Economic Outlook Database - Latest available data

 

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The Active Population in Figures

201820192020
Labour Force 4,499,9014,627,3924,122,919

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 68.74%70.77%71.05%
Men activity rate 88.32%87.88%87.96%
Women activity rate 49.38%53.83%54.28%

Source: International Labour Organization, ILOSTAT database

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
59,8/100
World Rank:
98
Regional Rank:
19

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
4/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
151/180

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Sources of General Economic Information

Main Online Newspapers and Portals
La Tribuna (in Spanish only)
La Prensa (in Spanish only)
Tiempo (in Spanish only)
El Heraldo (in Spanish only)
Diez (in Spanish only)
Honduras Newspapers
Honduras Newspapers and News Sites
Useful Resources
Ministry of Finance
Ministry of Foreign Relations and International Cooperation
Ministry of Economic Development
Ministry of Natural Resources and Environment
Ministry of the Interior, Justice and Decentralization
Central Bank of Honduras
 
 

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Latest Update: October 2022