Inflation

The Central Bank of Honduras announced measures to reduce inflation, which reached 5.83% in June, by increasing open-market operations to drain excess money from the financial system starting in August, aiming to return inflation to its 4% target by year-end.

Economist Julio Raudales says the Central Bank of Honduras's inflation target of 5–6% is reachable if monetary policy remains disciplined and external shocks do not occur, though he cautions that balancing price control with economic growth remains a key challenge.

Economist Ismael Zepeda says the Central Bank will struggle to control inflation through monetary policy given international conflicts raising fuel costs and a planned electricity rate increase in the third quarter, though the bank aims to absorb excess money supply and cut monetary emissions by 11%.

Honduras's labor federations say they will immediately seek a minimum-wage adjustment if inflation reaches 7%, invoking a safeguard clause in the current wage agreement, citing rising fuel and food costs eroding workers' purchasing power.

Honduras's central bank raised its forecast for family remittances to grow 7% in 2026 (to $13.16 billion) and maintained a 3–4% economic growth outlook, though inflation and currency depreciation continue to pressure household purchasing power.

Economist Ismael Zepeda warns that each cent of lempira depreciation against the dollar directly raises costs for food, fuel, and services; the currency has weakened 1.5% in the first half of 2026, nearing 27 lempiras per dollar.

Juliette Handal, president of the Patriotic and Solidarity Coalition, called on the government to meet with business sectors to prevent them from raising prices in response to fuel-cost pressures.

Diesel and kerosene prices rose 47.8% and 41.5% respectively from January through May 2026 compared to the same period last year, though both fuels declined month-over-month in May.

At Roatán's Kennedy neighborhood market, cassava, potatoes, and chayote squash all rose in price, as did soap and detergent, even as egg cartons held steady at 98 lempiras (about $4).

Labor leader Hilario Espinoza said inspectors are distributed nationwide to verify employers are paying the legal minimum wage, though he acknowledged enforcement challenges and noted inflation has risen to 6%, approaching the 7% threshold that would trigger wage renegotiation.

Honduras registered a 5.83% annual inflation rate in June, the highest in Central America, with economist Dante Mossi warning that subsidy removals and price increases are pushing the poor toward extreme hardship and reducing consumer spending.

Juan Carlos Hernández, president of Honduras's Colegio de Economistas, defended the central bank's decision to hold its benchmark interest rate steady, arguing that lower rates would risk fueling inflation by increasing money in circulation without proportional growth in goods and services.

Honduras's banking system holds nearly 200 billion lempiras (about $8 billion) in excess liquidity, and economists say the central bank must manage the surplus and maintain its policy rate to avoid stoking inflation.

The Honduran fuel distributors' association says price reductions take longer to reach consumers than increases because of volatile global markets, summer demand surges abroad, and geopolitical uncertainty around Middle Eastern shipping routes.

The Central Bank of Honduras forecasts year-over-year inflation of 4.97% at the close of 2026, with a declining trend that would bring it within the monetary authority's target range of 3.0–5.0% by June 2028.

Gasoline and diesel have fallen for seven consecutive weeks in Honduras, but the basic food basket and public transportation costs continue climbing, with analysts noting that oil-price increases pass through quickly while decreases do not.

Economist Amparo Canales says Honduras must reassess its economic outlook due to unstable oil prices and rising international inflation, requiring a review of the monetary program in the third quarter as the economic environment shifts.

Potatoes at the Farmer and Artisan Fair near the National Stadium in Tegucigalpa have risen to 28 lempiras per pound (about $1.12), while dairy prices have fallen.

Honduras's monthly inflation rate dropped to 0.19% in June 2026, the lowest for that month since 2020 and down 0.63 percentage points from May's 0.82%, marking the second consecutive month of decline.

Potato prices at Tegucigalpa's El Lempirita market climbed to L25 per pound (about $1 per pound) due to reduced harvests from March-to-May drought, part of broader food-cost pressure straining household budgets.

A Fosdeh economist warns that roughly 37 billion lempiras in unaccounted money emitted by the previous administration could stoke inflation, though he notes that inflation stems from multiple causes including import dependence, fuel costs, and climate-driven agricultural shortfalls.

Year-over-year inflation in Honduras eased to 5.83% in June, moving toward the central bank's medium-term target range of 4.00% plus or minus 1 percentage point.

Roberto Lagos, president of the Central Bank of Honduras, said July inflation data should show a deceleration, and the bank will review monetary-policy instruments to reduce excess money supply without harming credit growth, which has risen 6.7% in the first seven months of 2026.

The Honduran lempira has depreciated to over 26.87 per dollar in sales, with economists and civil organizations warning that the currency weakness is driving inflation and raising the cost of living.

Honduras's basic food basket jumped 800 lempiras (about $32) in a year, a 6.16% increase driven by higher meat and fruit costs, while drought affecting 75 municipalities threatens to push 2.8 million Hondurans into food insecurity by year's end.

The Honduran central bank will overhaul its monetary program following the IMF's successful review of Honduras's economic plan, which unlocks a disbursement of roughly $240 million and aims to move toward a more flexible exchange market while maintaining inflation control.

Economist Amparo Canales warns that rising electricity rates risk setting off cascading inflation and further increasing the cost of living for Hondurans.

A consumer-defender monitoring shows nine of eleven staple products increased in price over the past week, led by beans and eggs, while only two items fell, prompting authorities to watch for speculation.

Rafael Medina, former head of Tegucigalpa's Chamber of Commerce, urged oil companies and transporters to pass falling global fuel prices to consumers quickly, noting that inflation jumped nearly 1.5 percentage points above year-ago levels partly because of earlier fuel-cost increases.

The Central Bank of Honduras released its updated 2026–2027 monetary program, projecting inflation will converge to its 4.0% ± 1 percentage-point target by December 2026 and tightening money-supply measures to combat price pressures that reached 5.83% in June.