Washington, November 2, (V7N) – The International Monetary Fund and Honduras have reached an agreement on the final review of the Latin American country's bailout package, clearing the way for the release of $120 million in funds, according to a statement released late Sunday.
The funds will be released after approval by the IMF's executive board, expected in December. "The authorities reaffirmed that the Fund-supported program remains a key anchor for macroeconomic stability and reform," said IMF official Emilio Fernandez Corugedo as he concluded a visit to Tegucigalpa.
Honduras agreed to a three-year $847 million program with the IMF in September 2023.
In his statement, Fernandez Corugedo praised the country's macroeconomic reform program, saying it had "helped Honduras navigate significant shocks, including higher energy prices associated with the Middle East conflict and a severe El Nino-related drought." Honduras's economy grew by 3.7 percent in the first half of this year, but that metric was expected to moderate to 3.4 percent by the end of the year, according to IMF forecasts. Higher energy and food prices pushed consumer inflation to 6.3 percent in September.
On the external side, Honduras had a current account surplus of around 4.1 percent of GDP in the first half, but this was expected to turn to a deficit of 2.2 percent by the end of the year. International reserves, boosted by exports and remittances, stood at around $11.5 billion in October, the IMF said.
Priorities for the country's ongoing reform program were to maintain fiscal discipline while improving social support targeting; to improve public financial management; and to implement policies to maintain external sector stability, the IMF said.
Honduras has transactions with the IMF dating back to 1984, with $92 million in previous debts coming due by 2027. It is one of several Latin American nations to swing toward thrhrhe political right in recent years, a list that includes Argentina, Bolivia, Chile, Colombia and Peru.
