Honduras

Honduras' economy will gradually recover after a severe hit in 2020, while upcoming presidential elections could heighten political tension. The combined shocks of COVID-19 and two hurricanes caused a GDP contraction of 9% in 2020. We expect growth to rebound about 4.5% in 2021 and 3.6% thereafter. The government has made little progress in establishing clear rules for reelection. Government debt will likely stabilize at moderate levels after increasing in 2020 because of emergency fiscal measures and the economic downturn. The general government fiscal deficit widened to 4.5% of GDP in 2020, pushing net general government debt to around 48% of GDP, up from 39% of GDP in 2019. Energy-sector reforms face challenges to ensure ENEE's sustainability, which continues to

...Institutional and economic profile Flexibility and performance profile Honduras' economy will gradually recover after a severe hit in 2020, while upcoming presidential elections could heighten political tension. + The combined shocks of COVID-19 and two hurricanes caused a GDP contraction of 9% in 2020. + We expect growth to rebound about 4.5% in 2021 and 3.6% thereafter. + The government has made little progress in establishing clear rules for reelection. Government debt will likely stabilize at moderate levels after increasing in 2020 because of emergency fiscal measures and the economic downturn. + The general government fiscal deficit widened to 4.5% of GDP in 2020, pushing net general government debt to around 48% of GDP, up from 39% of GDP in 2019. + Energy-sector reforms face challenges to ensure ENEE's sustainability, which continues to be addressed by the program signed with the IMF. + We expect Honduras' external indicators to remain solid....

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