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Honduras Economy

    Economy—overview: Prior to Hurricane Mitch in the fall of 1998, Honduras had been pursuing a moderate economic reform program and had posted strong annual growth numbers. The storm has dramatically changed economic forecasts for Honduras, one of the poorest countries in Central America and the hardest hit by Mitch. Honduras sustained approximately $3 billion in damages and will probably see GDP shrink by 2% in 1999 and unemployment rise. Hardest hit was the all-important agricultural sector, which is responsible for the majority of exports. As a result, the trade deficit is likely to balloon in 1999 to $445 million. However, significant aid has helped to stabilize the country. In addition, the Paris Club and bilateral creditors have offered substantial debt relief, and Tegucigalpa is currently under consideration for inclusion in the IMF-World Bank Highly Indebted Poor Countries Initiative (HIPC). Additional financing will be needed to restore the economy to its pre-Mitch level.

    GDP: purchasing power parity—$14.4 billion (1998 est.)

    GDP—real growth rate: 3% (1998 est.)

    GDP—per capita: purchasing power parity—$2,400 (1998 est.)

    GDP—composition by sector:
    agriculture: 20%
    industry: 19%
    services: 61% (1997)

    Population below poverty line: 50% (1992 est.)

    Household income or consumption by percentage share:
    lowest 10%: 1.2%
    highest 10%: 42.1% (1996)

    Inflation rate (consumer prices): 14.5% (1998 est.)

    Labor force: 1.3 million (1997 est.)

    Labor force—by occupation: agriculture 37%, services 39%, industry 24% (1996)

    Unemployment rate: 6.3% (1997); underemployed 30% (1997 est.)

    Budget:
    revenues: $655 million
    expenditures: $850 million, including capital expenditures of $150 million (1997 est.)

    Industries: sugar, coffee, textiles, clothing, wood products

    Industrial production growth rate: 10% (1992 est.)

    Electricity—production: 2.73 billion kWh (1996)

    Electricity—production by source:
    fossil fuel: 12.09%
    hydro: 87.91%
    nuclear: 0%
    other: 0% (1996)

    Electricity—consumption: 2.734 billion kWh (1996)

    Electricity—exports: 0 kWh (1996)

    Electricity—imports: 4 million kWh (1996)

    Agriculture—products: bananas, coffee, citrus; beef; timber; shrimp

    Exports: $1.3 billion (f.o.b., 1996)

    Exports—commodities: bananas, coffee, shrimp, lobster, minerals, meat, lumber

    Exports—partners: US 54%, Germany 7%, Belgium 5%, Japan 4%, Spain 3% (1995)

    Imports: $1.8 billion (c.i.f. 1996)

    Imports—commodities: machinery and transport equipment, industrial raw materials, chemical products, manufactured goods, fuel and oil, foodstuffs

    Imports—partners: US 43%, Guatemala 5%, Japan 5%, Germany 4%, Mexico 3%, El Salvador 3% (1995)

    Debt—external: $4.1 billion (1995)

    Economic aid—recipient: $418.7 million (1995)

    Currency: 1 lempira (L) = 100 centavos

    Exchange rates: lempiras (L) per US$1 (end of period)—13.8076 (December 1998), 13.8076 (1998), 13.0942 (1997), 12.8694 (1996), 10.3432 (1995), 9.4001 (1994)

    Fiscal year: calendar year

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)