Tegucigalpa:The International Monetary Fund (IMF) and Honduras have reached an agreement on the final review of the Latin American country's bailout package, paving the way for the release of $120 million. This development was announced in a statement released late Sunday.
According to Bangladesh Sangbad Sangstha, the funds will be disbursed following approval by the IMF's executive board, which is anticipated in December. Emilio Fernandez Corugedo, an IMF official, highlighted the significance of the Fund-supported program as a foundation for macroeconomic stability and reform during his visit to Tegucigalpa.
Honduras entered into a three-year $847 million program with the IMF in September 2023. Fernandez Corugedo commended the country's macroeconomic reform efforts, noting that these measures have assisted Honduras in managing significant challenges, such as increased energy prices due to the Middle East conflict and a severe drought related to El Niño.
The Honduran economy experienced a growth rate of 3.7 percent in the first half of the year, though it is projected to slow to 3.4 percent by year-end, as per IMF forecasts. Rising energy and food prices contributed to a consumer inflation rate of 6.3 percent in September.
On the external front, Honduras recorded a current account surplus of approximately 4.1 percent of GDP in the first half of the year, expected to shift to a deficit of 2.2 percent by the end of the year. The country's international reserves reached about $11.5 billion in October, buoyed by exports and remittances.
The IMF outlined priorities for Honduras's ongoing reform program, which include maintaining fiscal discipline while enhancing social support targeting, improving public financial management, and implementing policies to sustain external sector stability.
Honduras has had a financial relationship with the IMF since 1984 and faces $92 million in debt repayments due by 2027. It joins a list of Latin American countries, such as Argentina, Bolivia, Chile, Colombia, and Peru, that have recently shifted towards the political right.