Honduras Economy News

Agriculture Minister Moisés Molina said Honduras requires approximately $16 billion in investment to fund irrigation projects that would modernize 500,000 acres of agricultural land.

Economist and former congressman Aníbal Cálix said public investment moved too slowly in the first half of 2026 and called for structural reforms at ENEE, the state power utility, to improve its financial performance and grid reliability.

Analyst Luis Cruz attributes Honduras's lowest investment percentage in Central America to weak legal protections and investor uncertainty, arguing that strengthening the legal framework and offering greater certainty to investors are key to attracting capital and creating jobs.

Former Energy Secretary Erick Tejada says Honduras's state power company needs eight years to recover from deep structural problems, and warns that the government's no-subsidy policy is pushing electricity rate increases onto ordinary Hondurans.

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.

Honduras's banking system is reallocating resources toward domestic investments, particularly voluntary holdings of Central Bank securities and instruments issued by the government and state power utility ENEE.

The Central Bank of Honduras says its external position is solid, supported by rising foreign-exchange reserves and favorable inflows that have maintained a positive net flow of hard currency.

Honduras's state utility ENEE increased residential, commercial, and industrial electricity rates by 12.48% effective July 1 through September 30, raising monthly bills by roughly that percentage across all customer segments.

The International Monetary Fund is tracking Honduras's efforts to reform its electric sector, with pending actions still needed to address problems at the state-owned utility ENEE.

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.

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.