Remittances

Foreign direct investment in Honduras represents less than 1% of GDP—about $223 million last quarter—while remittances account for roughly 27% of GDP, prompting business leaders to urge steps to attract capital and create formal jobs.

Economist Santiago Herrera warns that cancellation of the US Temporary Protected Status for Hondurans could reduce remittance inflows by up to $380 million, threatening households dependent on those transfers and straining the country's ability to reabsorb returned workers.

Cohep president Anabel Gallardo said legal and economic uncertainty is a major barrier to attracting investment and formal employment, citing losses in the power sector, flaws in part-time labor law, and the need for job creation to retain Hondurans rather than rely on migration and remittances.

About 670,000 Honduran households receive remittances from abroad, with 45% relying on them as their primary income source; 80% of remittance money goes to daily consumption rather than savings or investment, according to central bank data cited by a social-justice think tank.

Honduras is seeking a transition period from the U.S. before TPS holders must depart, with a delegation set to meet U.S. officials in early September, while at least 385 deportees arrived this week on three flights to San Pedro Sula.

About 31,000 Hondurans have been deported from the United States, Mexico, and Guatemala between January and August 2026, with 27,828 arriving by air from the US, as the government braces for potential mass returns following the US termination of Temporary Protected Status (TPS) for Hondurans.

Honduras's migration authority reported that more than 30,000 Hondurans have been deported from the US, Mexico, and Guatemala through August 20, 2026, with officials warning that the termination of Temporary Protected Status for 55,000 Hondurans could trigger mass deportations and threaten the $10 billion in annual remittances the country receives.

A UNAH economist warns that termination of Temporary Protected Status for approximately 50,000 Hondurans in the US could result in a gradual decline in remittances, potentially totaling $200 million annually if affected migrants lose formal employment and income capacity.

A Central Bank of Honduras survey finds that 85% of Hondurans sending remittances home live in the US, over half have been abroad at least 16 years, and they send an average of $506 monthly.

Economist Julio Raudales, former president of the Honduran Economists' College, notes that poverty in Honduras has remained at roughly 63% since 2001, questioning what progress has been made despite 25 years of Temporary Protected Status for Hondurans in the US.

Honduras's foreign minister said the end of Temporary Protected Status for over 55,000 Hondurans in the US does not mean all beneficiaries must return immediately, as individual cases will depend on family ties, residency length, and pending legal proceedings.

Honduras received $6.52 billion in remittances in the first six months of 2026, a 12.3% increase from the same period in 2025, according to the International Organization for Migration.

The Central Bank of Honduras forecasts full-year 2026 GDP growth of 3 to 4 percent, supported by agricultural exports and household consumption, though the outlook depends heavily on global oil and coffee prices and international trade tensions.

Honduras's national university economic institute forecasts the lempira will weaken to 27.15 per dollar by end-2026 and 27.98 per dollar by end-2027, a slower pace than 2025's 4.16% decline, while international reserves remain strong at 11.45 billion dollars.

COHEP's July 2026 regional competitiveness bulletin projects 3.4% economic growth in 2026 backed by remittances, but flags Honduras ranking 95th globally in economic freedom, 119th in innovation among 139 countries, and third worldwide in climate vulnerability.

Juan Carlos Hernández, president of Honduras's economics association, says family remittances have strengthened household purchasing ability for food, education, and health, and reduced demand for consumer credit.

Honduras's foreign-currency inflows grew compared to a year earlier, driven chiefly by robust family remittances, while outflows grew at a slower pace, producing a net positive currency gap.

Honduras's banking sector continues to strengthen as private deposits rise, driven by economic activity and robust family remittances, the central bank reports.

Honduras's central bank reported strengthened foreign-exchange reserves driven by sustained inflows of family remittances and revenues from goods and services exports.

Lawmakers are reviewing a sweeping reform of Honduras's securities law that would let Hondurans channel savings and remittances into investments rather than consumption, an approach already common in Costa Rica, Panama, and the Dominican Republic.

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.

Family remittances to Honduras reached $6.59 billion in the first half of 2026, a 11.9% jump from the same period last year and above the Central Bank's projected 3.5% growth; if the trend holds, annual remittances may exceed $13.5 billion.

Remittances to Honduras rose 13.2% to $5.29 billion in the first five months of 2026, the fastest growth among the three Northern Triangle countries, according to International Organization for Migration data.

Family remittances to El Salvador, Guatemala, and Honduras totaled $20.15 billion in the first five months of 2026, an 8.6% increase from the same period a year earlier.

Honduras recorded a foreign-exchange surplus of $1.4 billion in the first half of 2026, led by remittances of $6.6 billion, which exceeded prior-year inflows by 12.4%.

Honduras received $6.51 billion in family remittances in the first six months of 2026, a 12.3% increase from the same period in 2025, with over 85% coming from the United States and mothers receiving 38.6% of the total.

A Fosdeh economist attributes a recent increase in remittances to Honduras partly to Hondurans in the United States sending money home due to deportation concerns, while others continue migrating and supporting their families abroad.

Family remittances to Honduras reached $11.9 billion in 2025, benefiting 3.1 million recipients and representing 30% of GDP, though growth rates are slowing compared to 2024.

Sergio Zepeda, an economist at the National Autonomous University of Honduras, says roughly 90% of remittances entering Honduras are spent on consumption while only 10% goes to savings or investment, with most spending concentrated in major cities.

Defensores de Honduras called on the government and Congress to treat the end of TPS for Honduran migrants and a nearly 12% electricity rate hike as national emergencies requiring urgent policy responses.