An International Monetary Fund (IMF) team, led by Ricardo Llaudes, visited Tegucigalpa, Honduras, from October 7 to 18, 2024. This visit was part of ongoing discussions that have been both in-person and virtual over recent months. At the conclusion of the visit, Mr. Llaudes issued a statement outlining the outcomes of their discussions.
"The Honduran authorities and the IMF team have reached staff level agreement on the economic policies necessary to complete the first and second reviews of the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements," stated Llaudes. The IMF's Executive Board is expected to consider these agreements soon.
The discussions highlighted that despite global challenges and the El Niño climate shock, Honduras's economy remains resilient. Growth is projected at nearly 4 percent this year, with inflation stabilizing between 4½ and 5 percent. However, international reserves have declined due to factors such as drought affecting agricultural exports and energy imports.
Honduran authorities are committed to implementing macroeconomic policies aimed at strengthening economic stability. These policies focus on five key areas:
1. Budgetary discipline is crucial for debt sustainability. Fiscal performance has exceeded program objectives due to strong tax revenues and improved public financial management. Plans include enhancing budget transparency and modernizing procurement frameworks.
2. Social spending will be strengthened to support vulnerable populations. The authorities aim to improve social support disbursement through programs like Red Solidaria and finalize systems for monitoring social programs.
3. Monetary and exchange rate policies will be adjusted to maintain low inflation and safeguard reserves. Recent measures include increasing reserve requirements and adjusting monetary policy rates.
4. The health of the energy sector is being addressed with reforms targeting financial stability for ENEE, the public power company.
5. Anti-corruption efforts continue with new systems for asset declaration among officials and transparency initiatives ahead of a FATF evaluation in 2026.
Llaudes concluded by expressing gratitude towards Honduran authorities, private sector representatives, and civil society for their hospitality during discussions.