Via IMF (Den Internationale Valutafond)

IMF and Honduras Reach Staff-Level Agreement on the First Review of the Economic Program under the Stand-by/Credit Facility Arrangement

November 8, 2019

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.

An International Monetary Fund (IMF) team led by Mr. Esteban Vesperoni
visited Honduras from October 28 to November 8 to conduct discussions on
the First Review of Honduras’s IMF-supported program under the Stand-By
Arrangement (SBA) and the Credit Facility Arrangement (CFA). Mr. Vesperoni
issued the following statement in Tegucigalpa today:

“An IMF team and the Honduran authorities reached a staff-level agreement
on the first review of the economic program supported by a two-year
Stand-by and Credit Facility arrangement.

“Honduras has made important progress implementing its economic program,
which seeks to foster inclusive growth through prudent macroeconomic
policies; and structural and governance reforms. Implementation of policies
under the program will uphold macroeconomic performance.

“Honduras has experienced a moderation in economic growth during the last
quarters, but growth is expected to recover next year, in line with a
better global environment. The authorities continue to pursue prudent
macroeconomic policies anchored by the Fiscal Responsibility Law. They are
convinced that these policies are the right response to foster growth and
the well-being of all Hondurans, while reducing poverty and inequality.
With this in mind, the authorities are working on expenditures
reallocations to protect investment and social spending. They are also
committed to maintaining their revenue mobilization efforts to preserve the
hard-won gains achieved over the past years.

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“The authorities are making progress in their ambitious program of reforms;
which has the potential to raise the economy’s growth potential. There were
notable advances in the initial phase of the electricity sector reform,
which aims at strengthening the institutional framework in the sector. The
strengthening of the regulatory agency, the creation of an independent
system operator, the efforts by the new management of the company and the
Secretary of Finance to improve governance and transparency in the public
electricity company (ENEE), and the establishment of an electricity theft
task force have the potential to reinforce the institutional framework for
an open, competitive and transparent market in the electricity sector; and
a sustainable financial position in ENEE. Continued steadfast
implementation of the reform plans in the sector remains essential.
Strengthening the financial position in ENEE has the potential to create
the needed fiscal space to protect infrastructure investment and social

“The authorities have also developed a roadmap to enhance governance and
the business climate, including by drafting the new central bank charter,
improving the budget process and the quality of public spending,
simplifying the regulatory framework, and developing reforms to foster
transparency and advance the fight against corruption.

“The mission held discussions with President of the Republic Juan Orlando
Hernández, president of Congress Mauricio Oliva, magistrates of the Court
of Accounts, members of the economic cabinet, and other senior officials
and representatives of civil society, the private sector and the
international community. The mission would like to thank the authorities
and other counterparts for the excellent discussions; and reiterate that it
greatly appreciates their kind hospitality.”

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IMF Communications Department

PRESS OFFICER: Maria Candia Romano

Phone: +1 202 623-7100Email: