Honduras’s economic growth to come under pressure

Significance

However, towards the end of 2022, economic activity started to moderate as that of trading partners such as the United States slowed, reducing demand for Honduran exports. The country now faces a less supportive external environment, affected by the war in Ukraine, tightening financial conditions and adverse weather.

Impacts

• Private-sector credit is expected to become one of the main factors supporting growth this year.
• Corruption, gang violence and inadequate infrastructure will limit the potential for substantial medium-term growth.
• A free trade agreement with China would attract substantial investment and have a positive impact on growth prospects.
• Divergence between Liberty and Refoundation and the Honduras Saviour Party will hit the government’s ability to pass reforms in Congress.