Honduras is one of Latin America's poorest
countries. Historically, the economy has been completely
dependent on coffee and banana exports, but during the
1990s production expanded. Nowadays, foreign-owned
assembly plants, so-called maquilas, in tax-free zones
account for a large part of exports. It mainly produces
clothes that are sold to the United States. The money
that Hondurans send abroad to their families also plays
an important role.
The coup d'état in June 2009 was a severe blow to
Honduras economy. The United States, the EU and major
lenders The World Bank and the International Monetary
Fund (IMF) all canceled their aid and froze their loans
to the country. The neighboring countries introduced a
trade block, which basically meant closed borders.
Between 2003 and 2008, GDP growth was 5.7 percent. As a
result of both the global financial crisis and the coup,
the economy shrank by 2.4 percent in 2009 in order to
regain momentum the following year. During the early
2000s, it was mainly the maquila industry, tourism and
the construction sector that contributed to the
increase. After the coup, the tourism sector has never
really recovered, which is also due to the increasingly
widespread violence. Instead, it is again maquilas, but
also a booming coffee export, which is pulling the
Major imports by Honduras, covering a full list of top products imported by the country and trade value for each product category.
Growth in 2011–2012 was 3.5 percent. Even the money
that Hondurans send to their families dropped
dramatically as a result of the crisis in 2008. Only in
2013 did exile Hondurans expect to send home as much
money as in 2008. In 2012, this money accounted for just
over 15 percent of GDP.
The financial crisis and the economic isolation in
the wake of the coup also meant that the external debt
again gained momentum. Between 2004 and 2008, the debt
was halved from $ 5.8 billion to $ 2.3 billion, mainly
due to Honduras 2005 being approved by the IMF for debt
amortization under the HIPC (Highly indebted poor
countries) program. This meant that the country's
external debt would be cut by a quarter over the next
ten years. The Paris Club promised a certain debt
write-off and the G8 countries wrote off all the
international loan agencies' claims on Honduras. But in
2013, the external debt had doubled by 2008 and was $ 5
billion, which was less than one fifth of GDP. The World
Bank and the IMF again granted loans to Honduras in
2010, but the IMF did not renew the agreement in 2012
and a year later the fund was still not satisfied.
Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including HND which represents the country of Honduras.
In 2013, inflation showed signs of falling. It was
then 4.8 percent after lying at 5-6 percent in
2010-2012. The increase was due to higher prices for
food, but also to the fact that the coup d'état in 2009
meant that cooperation between Honduras and Venezuela on
cheaper oil was interrupted. Through the collaboration,
then-President Zelaya was able to subsidize gasoline.
Therefore, gasoline prices rose dramatically in 2010.
Honduras is still living with the effects of
Hurricane Mitch, which hit the country in 1998. After
several years of good growth, the natural disaster meant
a major disruption to the economy. The cost of the
damage amounted to almost SEK 40 billion and
corresponded to 95 percent of the country's GDP in
1998. With the help of loans and assistance, most of the
infrastructure could be rebuilt relatively quickly. The
Paris Club loan group granted Honduras deferral with
interest payments on previous loans and in 2000 Honduras
was approved for HIPC.
FACTS - FINANCE
GDP per person
US $ 2,483 (2018)
US $ 23,803 million (2018)
3.7 percent (2018)
Agriculture's share of GDP
11.8 percent (2018)
Manufacturing industry's share of GDP
16.8 percent (2018)
The service sector's share of GDP
57.1 percent (2018)
4.4 percent (2019)
Government debt's share of GDP
40.2 percent (2018)
US $ 8,671 million (2017)
US $ 4,405 million (2018)
US $ 9,485 million (2018)
- US $ 1,005 million (2018)
Commodity trade's share of GDP
90 percent (2018)
Main export goods
textiles, coffee, palm oil, bananas, seafood, gold,
Largest trading partner
USA, Guatemala, El Salvador, Mexico
Porfirio Sosa Lobo wins the presidential election
In the presidential election, Nationalist Party candidate Porfirio Sosa Lobo
wins by 57 percent, against 38 percent for Liberal Party candidate Elvin Santos.
The Nationalist Party also gets 71 out of 128 seats in Congress. The Liberal
Party gets 45 seats, Christian Democratic PDC 5, Left Alliance UD 4 and Social
Democratic Pinu 3.
The state of emergency is canceled
The state of emergency, introduced in September, is lifted after
international pressure. With the help of the Organization of the United States
of America (OAS), the parties manage to agree, among other things, that Congress
will vote on Zelaya's re-installation before November 5. That doesn't happen.
The unifying government that the agreement also provides for will also not
Zelaya smuggled into Brazil's embassy
Zelaya is smuggled in with Venezuelan diplomats into Honduras and gets exile
at Brazil's embassy in Tegucigalpa. In the riots that follow his return, many
Zelay followers are injured and hundreds more are arrested. Brazil's President
Luiz Inácio Lula da Silva gives Zelaya his full support. Faced with the threat
of a full-scale uprising before the government's state of emergency.
Worried when Zelaya tries to return
Zelaya makes two unsuccessful attempts to return to Honduras. Both occasions
lead to violent confrontations between Zelay supporters and police and military
with a total of two deaths as a result.
The president is deposed in a coup d'état
President Manuel Zelaya is deposed in a coup d'état and forced to leave the
country. As former Vice President Elvin Santos resigned to run for office,
President of the National Congress, Roberto Micheletti, is elected president
until the November elections.