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Honduras Economical Facts

 

Economical overview

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 economy.

  • Countryaah.com: 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.

Economical Facts 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)

Total GDP

US $ 23,803 million (2018)

GDP growth

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)

Inflation

4.4 percent (2019)

Government debt's share of GDP

40.2 percent (2018)

External debt

US $ 8,671 million (2017)

Currency

Lempira

Merchandise exports

US $ 4,405 million (2018)

Imports

US $ 9,485 million (2018)

Current account

- US $ 1,005 million (2018)

Commodity trade's share of GDP

90 percent (2018)

Main export goods

textiles, coffee, palm oil, bananas, seafood, gold, zinc

Largest trading partner

USA, Guatemala, El Salvador, Mexico

2009

November

Porfirio Sosa Lobo wins the presidential election

November 29th

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.

October

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 become.

September

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.

July

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.

June

The president is deposed in a coup d'état

June 28

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.

 

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