We expect the administration of President Juan Orlando Hernández to pursue disciplined public finance policies. The government still faces challenges in establishing clear rules for reelection and continuing to address crime and corruption issues. Per capita GDP is low, and maintaining sustainable economic growth is a policy priority. We expect that an active revenue collection policy and controls of current expenditures will contain Honduras' general government fiscal deficit to around 1%-2% of GDP over the next two years. Energy-sector reforms still face some challenges to ensure the National Electric Energy Co.'s (ENEE) sustainability, which are being addressed by the two-year blended standby arrangement (SBA) and standby credit facility (SCF) signed with the International Monetary Fund (IMF). Higher oil prices, lower
