Browse Honduras Daily Stories

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.

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.

Honduras has spent only 34% of its 444-billion-lempira (about $16.8 billion) 2026 budget through June, with economists attributing the lag to late congressional approval and urging faster execution in priority areas like health, education, and productive investment.

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.

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).

Finance Minister Emilio Hernández and Central Bank President Roberto Lagos signed a letter of intent to the IMF ahead of the June 29 board review, with officials saying approval could unlock about $240 million in fresh funds and help stabilize the economy.

Former Central American Bank president Dante Mossi cautioned that a proposed reform to exclude bonuses from income tax (ISR) calculations would create tax-evasion opportunities and reduce government revenue, reversing two decades of IMF-backed reforms.

Honduras's fuel subsidy has already cost 860 million lempiras (about $34.5 million) against a budgeted 680 million, with full-year costs projected at 1.2–1.3 billion lempiras, prompting the Finance Ministry to plan internal budget adjustments and consider narrowing the subsidy to lower-income households.

Congress is considering a reform to exclude performance bonuses, gratuities, and overtime pay from income-tax calculations, a move an economist says would reward worker effort but warns could enable tax evasion without proper state oversight.