Honduras Economy News

Honduras's manufacturing industry grew 1.5% in the first quarter of 2026, reversing a 3.0% contraction in the prior quarter, driven by increased demand for food and beverages including processed coffee, fish, oils, flour, and bakery products.

Gross domestic product expanded 1.2% in the first quarter of 2026 compared to the previous quarter, the strongest first-quarter growth in recent years and well above the 0.1% recorded in late 2025, signaling moderate economic acceleration.

Foreign direct investment in Honduras dropped 27% in the first six months of 2026 to $213 million, about $80 million less than the same period last year, the Central Bank confirmed.

Transport operators say urban bus fares will remain at 13 lempiras despite recent fuel-price declines, citing other operating costs and a government subsidy three months in arrears.

Year-over-year inflation in Honduras reached 6.09% in May, up 1.55 percentage points from a year earlier, driven mainly by rising fuel prices that accounted for nearly half the overall price increase.

Foreign direct investment to Honduras continued to grow in the first three months of 2026, supporting economic activity, according to the Central Bank.

Central Bank President Roberto Lagos said Honduras must prepare monetary and fiscal measures aligned with IMF recommendations to contain inflation, while currently monitoring how fuel prices ripple through the economy; he indicated no immediate rate adjustment is needed given US Federal Reserve policy.

Honduras's exports grew 2.8% quarter-over-quarter, driven by increased sales of coffee, crude oil, cigars, and services, while imports rose 2.1% due to higher purchases of industrial inputs, machinery, transport equipment, and fuel.

Agricultural production in Honduras declined 3.6% in the first quarter of 2026, reversing 2025's gains, driven mainly by drops in grain and coffee crops.

Honduras's electric utility regulator approved a third rate increase for 2026 effective July 1, expected to raise bills 5–10% through September, pushing year-to-date increases to nearly 15% amid inflation above target and lempira depreciation.

The Central American Bank for Economic Integration approved a historic capital increase from $7 billion to $10 billion to strengthen its ability to finance major development projects across the region and expand its global influence.

Honduras's net foreign reserves have accumulated $1.124 billion since January 27, the Central Bank reported, with import coverage holding steady at 6.6 months.

Twenty-one staple foods including butter, cheese, pasta, and beef ribs have fallen in price following five consecutive weeks of fuel reductions, as the Economy Ministry pushes over 16 industries to pass savings to consumers.

Housing Secretary Francis Argeñal said 75% of Honduras's population lacks access to bank credit, prompting the government to develop a national financial-inclusion plan and subsidy policy for housing projects.

The Central Bank auctioned $95.6 million in its June 29 foreign-exchange sale, setting the weighted average exchange rate at L26.7183 per dollar for June 30.

Honduras's banking regulator (CNBS) unveiled a five-year National Financial Inclusion Strategy (2025–2030) aimed at expanding access to formal financial services for women, youth, rural communities, small businesses, elderly people, and indigenous and Afro-Caribbean populations.

An energy analyst at the ASJ warns that Honduras's next power-rate adjustment could increase due to rising fuel prices and the country's heavy reliance on fossil-fuel generation, citing a lack of competitive bidding that has forced ENEE to rely on costly spot-market contracts.

Analyst Henry Rodríguez says Honduras must invest approximately $4.2 billion annually to generate between 70,000 and 80,000 jobs per year.

Family remittances made up 52 cents of every dollar in Honduras's national income during the first half of 2026, while budget execution reached only 35 percent, according to the Finance Ministry.

Fuel prices will drop by 2 to 4 lempiras per liter starting Monday, according to the Energy Ministry's new weekly price structure.

The International Monetary Fund's board approved Honduras's fourth and fifth program reviews, unlocking a $242 million disbursement and bringing total IMF funding to $725 million of a $847 million package, though the IMF flagged missed targets on electrical utility arrears and urged faster energy-sector reform.

A World Bank report shows digital employment and remote work are growing in Central America but remain limited outside Costa Rica and the Dominican Republic, held back by poor connectivity, lack of devices, and weak digital skills in most countries.

The Inter-American Development Bank says Central American and Dominican economies face heightened global volatility and must build fiscal space, strengthen currency flexibility (especially Honduras and Nicaragua), and shore up foreign reserves to cushion external financial shocks.

Honduras's basic food basket has risen more than 700 lempiras (about $28) since January, according to academic economists.

Alexander Godoy, a STENEE union representative, says a review of Honduras's electricity subsidy aims to ensure benefits reach only low-income families while eliminating aid to vacation homes and vacant properties, allowing state utility ENEE to strengthen its finances and reduce costs.

Congress President Tomás Zambrano announced a proposal to restructure agricultural and livestock producers' debts at 2.5% interest, with about 15 billion lempiras (roughly $600 million) in funding identified from the Latin American development bank to support the sector.

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.

Transport operators say they will not reduce urban bus fares in the capital until diesel and gasoline fall to L75 (about $3) per gallon, citing insufficient relief from current fuel-price declines.

The Central Bank's Global Real Effective Exchange Rate Index rose 2.34% year-over-year in May 2026, marking five consecutive months of improved export competitiveness driven by favorable exchange-rate movements.

The Central Bank of Honduras auctioned $93.8 million in its daily currency sale on June 26, setting the exchange rate at L26.7217 per dollar for the weekend and Monday.