Economy - overview In 1994 the REINA administration inherited an economy in the grips of stagflation due to an unprecedented energy crisis, declining agricultural output, and extravagant public expenditures. In response the REINA administration cut the fiscal deficit and enacted a number of structural reforms including passage of a modern financial sector reform law in 1995 and a central bank reform law in 1996. As a result, Honduras finished 1997 with improved GDP growth and a decreasing rate of inflation. The newly elected FLORES administration faces pressure from the international financial community and the IMF to further decrease the fiscal deficit and implement key reforms, including the privatization of state enterprises such as Hondutel. Tegucigalpa will probably implement tighter fiscal and monetary policies to keep inflation low and meet commitments to the IMF. This may slow GDP growth to 3.5% in 1998. Moreover, wage increases for public-sector employees, agreed to in 1997, will make it difficult for FLORES to make headway on the fiscal deficit and inflation.

GDP purchasing power parity - $12.7 billion (1997 est.)

GDP - real growth rate 4.5% (1997 est.)

GDP - per capita purchasing power parity - $2,200 (1997 est.)

GDP - composition by sector
agriculture: 20%
industry: 19%
services: 61% (1997)

Inflation rate - consumer price index 15% (1997 est.)

Labor force
total: 1.3 million (1997 est.)
by occupation: agriculture 62%, services 20%, manufacturing 9%, construction 3%, other 6% (1985)

Unemployment rate 6.3% (1997); underemployed 30% (1997 est.)

Budget
revenues: $655 million
expenditures: $850 million, including capital expenditures of $150 million (1997 est.)

Industries sugar, coffee, textiles, clothing, wood products

Industrial production growth rate 10% (1992 est.)

Electricity - capacity 305,000 kW (1995)

Electricity - production 2.8 billion kWh (1995)

Electricity - consumption per capita 516 kWh (1995)

Agriculture - products bananas, coffee, citrus; beef; timber; shrimp;

Exports
total value: $1.3 billion (f.o.b., 1996)
commodities: bananas, coffee, shrimp, lobster, minerals, meat, lumber
partners: US 54%, Germany 7%, Belgium 5%, Japan 4%, Spain 3% (1995)

Imports
total value: $1.8 billion (c.i.f. 1996)
commodities: machinery and transport equipment, industrial raw materials, chemical products, manufactured goods, fuel and oil, foodstuffs
partners: US 43%, Guatemala 5%, Japan 5%, Germany 4%, Mexico 3%, El Salvador 3% (1995)

Debt - external $4.1 billion (1995)

Economic aid
recipient: ODA, $NA

Currency 1 lempira (L) = 100 centavos

Exchange rates lempiras (L) per US$1 (end of period) - 13.1332 (January 1998), 13.0942 (1997), 12.8694 (1996), 10.3432 (1995), 9.4001 (1994), 7.2600 (1993)

Fiscal year calendar year

NOTE: The information regarding Honduras on this page is re-published from the 1998 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Honduras Economy 1998 information contained here. All suggestions for corrections of any errors about Honduras Economy 1998 should be addressed to the CIA.