Press Release No. 22/229

IMF Staff Concludes Visit to Honduras

June 24, 2022

• An IMF mission visited Tegucigalpa to deepen discussions on the authorities’ policy priorities which will form the basis for a deeper engagement with the Fund.
• The authorities reiterated their commitment to their social program and poverty reduction, prudent macroeconomic management within the domestic and international context, tackling corruption, and fostering inclusive growth.
• In the short-term, the government is focused on cushioning the economy from the impact of commodity price increases and protecting the vulnerable from food insecurity amid rising food prices.

Tegucigalpa, Honduras: An International Monetary Fund (IMF) team led by Joyce Wong and supported by resident representative Christian Henn visited Tegucigalpa, Honduras, on June 20-24, 2022 to deepen discussions on the authorities’ vision and their policy priorities. At the conclusion of the visit, Ms. Wong issued the following statement:

“The team discussed with the authorities recent economic developments and the outlook for Honduras. Despite a strong rebound in economic activity, employment remains below pre-pandemic levels. High and rising inflation, driven by commodity prices and subsequent economic shocks amid strong remittances, is exposing the most vulnerable Hondurans.

“In the face of these challenges, the team discussed with the authorities their policy priorities within their social program, which they would like to be supported by deeper engagement with the Fund. The authorities emphasized the priority to reduce poverty, protect the most vulnerable, and foster inclusive growth. They also plan to tackle corruption and strengthen governance and transparency, including by improving public financial management. To this end, they have passed legislation to eliminate trust funds and are in the process of reviewing tax exemptions to make the tax system more equitable. This would create fiscal space to boost much-needed investment and support social spending.

“The authorities reiterated their commitment to honor the country’s debts and to maintain debt sustainability. They are improving debt management with international assistance and aim to gradually improve the debt service profile. The government highlighted the importance of implementing energy reforms to improve the functioning of the national electricity company (ENEE) and the electricity sector.

“The IMF team would like to thank the authorities for their kind hospitality and candid discussions.”