The International Monetary Fund (IMF) Executive Board has completed the third reviews under the Extended Fund Facility and Extended Credit Facility arrangements for Honduras. This completion allows Honduran authorities to access approximately US$160 million, bringing total disbursements under these programs to about US$485 million. These 36-month arrangements, totaling around US$850 million, were initially approved on September 21, 2023.
Program performance for these reviews has been robust, with all quantitative performance targets met by the end of December 2024. By the end of May 2025, three structural benchmarks had also been achieved, including a manual for budget execution programming, a digital investment portal launch, and a diagnostic study on the foreign exchange allocation system. Progress is ongoing in implementing three additional structural benchmarks.
The Honduran economy continues to demonstrate resilience. After a growth rate of 3.6 percent in 2024, it is projected to grow by 3.5 percent in 2025. This growth is supported by economic rebalancing, improved weather conditions, and favorable trade terms. Inflation has decreased close to the target of 4 percent. Fiscal performance remains strong with a fiscal deficit outperforming expectations at 1.0 percent of GDP in 2024 and projected to rise slightly to 1.5 percent in 2025. International reserve coverage has improved since late 2024 due to external market access and favorable foreign exchange inflows.
At the conclusion of the Executive Board's discussion, Ms. Gita Gopinath, First Deputy Managing Director and Acting Chair stated: “The Honduran economy remains resilient in the face of a challenging economic landscape. Policies under the program have bolstered macroeconomic stability and contributed to a rebalancing of the economy, including a marked strengthening of the external position."
She emphasized that "policy agility and steadfast program implementation are essential amid heightened external risks," adding that "the authorities’ commitment to the Fund-supported economic program is strong."
Ms. Gopinath highlighted fiscal prudence as key: “Fiscal prudence continues to be a pillar of the authorities’ agenda and is key to creating fiscal space for public investment and social spending while preserving debt sustainability.”
Regarding monetary policy adjustments she said: “The authorities’ decisive recalibration of monetary and exchange rate policies has been instrumental to support low inflation...and strengthen conditions in FX markets.”
Progress in energy sector reforms was also noted: “Significant progress is being achieved in the energy sector...these measures are contributing to a stronger financial position for the state-owned utility company.”
Finally, she acknowledged advancements in governance reforms: “Structural reforms are the cornerstone of the authorities’ agenda...concurrent efforts to improve business environment...are also progressing.”