Public Debt

The private-sector business council says Honduras should borrow the $400 million CAF financing to strengthen the housing bank and spur construction, but opposes debt used only to cover government operating costs.

Honduras sold a 10-year sovereign bond for $815.67 million at a 6.4% interest rate, securing funds for debt management and the national budget while locking in interest rates more than 2 percentage points lower than a 2024 issuance.

ASJ economist Obed García warned that Honduras's public debt has grown to roughly equal the entire national budget, leaving little fiscal room for salaries, public investment, and essential services if the government were to address it.

Experts debated Honduras's urgent need for electricity-sector reform, warning that failure to reach consensus by July will worsen blackouts, increase public debt, and deter foreign investment, as lawmakers disagree over whether new utilities should remain state-owned or allow private investment.

An economist at civic watchdog group ASJ warns that Honduras's rising public debt could approach $25 billion within years without policy changes, and calls for greater investment in infrastructure, ports, education, and energy to drive sustainable growth.

Dante Mossi, former president of the Central American Bank for Economic Integration, says the government lacks a public strategy to manage ENEE's $1 billion debt to power generators, a $700 million sovereign bond due in January 2027, and roughly $3 billion in stalled infrastructure projects including roads, dams, and hospitals.

Obed García, an economist at the Association for Justice, says Honduras should use public borrowing to fund infrastructure and productive projects rather than other spending, citing existing road and economic plans and the need to create jobs for 300,000 unemployed people.

As of May 2026, Honduras's external public debt stood at $10.76 billion, with 70.1% owed to multilateral organizations, 20.9% to commercial creditors, and 9.0% to bilateral lenders.

Economist Henry Rodríguez says Honduras's budget execution is tracking at only 32% through June due to delays in budget approval and cabinet formation, with 26.2% committed to salaries and 27% to debt service, leaving little room for public investment.

Honduras's public external debt reached $10.76 billion as of March 2026, up $24.5 million from December 2025.

Honduras's public debt increased by $1.8 billion in the first three months of 2026 compared with the same period a year earlier.

Honduras signed a $100 million Inter-American Development Bank loan to strengthen fiscal management, revenue collection efficiency, and budget transparency, with support from the IMF, World Bank, and CAF.

Deputy Finance Minister Liliam Rivera said the National Treasury faces critical strain from automatic debt payments linked to lawsuits from the prior administration, combined with obligations to multilateral lenders and a floating debt exceeding 24 billion lempiras (about $960 million).

Honduras's state power utility is issuing bonds in the national financial system to raise liquidity and settle accumulated debts to electricity generators, officials say, aiming to ensure uninterrupted power supply.

Honduras's state power utility ENEE requires L35.4 billion (roughly $1.4 billion USD) in domestic debt from 2026 to 2029 to cover payments to private generators, amid losses exceeding 34% and a total debt burden now at L73.3 billion.

Honduras's public-sector debt reached $9.35 billion by April 2026, up $50 million from December 2025, with the central government accounting for the largest share.

Honduras's public external debt reached $10.75 billion as of April 2026, with 81.2% denominated in US dollars, 14.8% in IMF special drawing rights, and smaller portions in euros, yen, and other currencies.

Honduras's state power utility is auctioning L2.2 billion (about $88 million) in bonds at interest rates of 10.6% to 12.2% to pay down arrears exceeding L16.4 billion owed to private energy suppliers.

Honduras is servicing over $3.3 billion in foreign loans for 66 active projects, 76% of which have failed to reach 50% execution by end of 2025, including 19 that have not begun, forcing taxpayers to cover interest and fees on work generating no public benefit.

An economist at Honduras's social auditor's office warns that public debt has climbed to nearly $14 billion—above pre-2006 levels—as the government takes new loans to pay existing obligations, creating a cycle of mounting debt.

FOSDEH economist Mario Palma says Honduras's public debt has risen to $18.454 billion this year, up from previous levels.