Honduras Economy Profile 2008

Economy - overview

Honduras, the second poorest country in Central America and one of the poorest countries in the Western Hemisphere, with an extraordinarily unequal distribution of income and massive unemployment, is banking on expanded trade under the US-Central America Free Trade Agreement (CAFTA) and on debt relief under the Heavily Indebted Poor Countries (HIPC) initiative. Despite improvements in tax collections, the government's fiscal deficit is growing due to increases in current expenditures and financial losses from the state energy and telephone companies. Honduras is the fastest growing remittance destination in the region with inflows representing over a quarter of GDP, equivalent to nearly three-quarters of exports. The economy relies heavily on a narrow range of exports, notably bananas and coffee, making it vulnerable to natural disasters and shifts in commodity prices, however, investments in the maquila and non-traditional export sectors are slowly diversifying the economy. Growth remains dependent on the economy of the US, its largest trading partner, and on reduction of the high crime rate, as a means of attracting and maintaining investment.

GDP (purchasing power parity)

$24.69 billion (2007 est.)

GDP (official exchange rate)

$10.06 billion (2007 est.)

GDP - real growth rate

6% (2007 est.)

GDP - per capita (PPP)

$3,300 (2007 est.)

GDP - composition by sector

agriculture: 13.5%
industry: 31%
services: 55.6% (2007 est.)

Population below poverty line

50.7% (2004)

Household income or consumption by percentage share

lowest 10%: 1.2%
highest 10%: 42.2% (2003)

Inflation rate (consumer prices)

6.4% (2007 est.)

Investment (gross fixed)

26.3% of GDP (2007 est.)

Labor force

2.812 million (2007 est.)

Labor force - by occupation

agriculture: 34%
industry: 23%
services: 43% (2003 est.)

Unemployment rate

27.8% (2007 est.)

Distribution of family income - Gini index

53.8 (2003)

Budget

revenues: $2.089 billion
expenditures: $2.357 billion; including capital expenditures of $106 million (2007 est.)

Public debt

29.3% of GDP (2007 est.)

Industries

sugar, coffee, textiles, clothing, wood products

Industrial production growth rate

5.3% (2007 est.)

Electricity - production

5.339 billion kWh (2005)

Electricity - consumption

4.036 billion kWh (2005)

Electricity - exports

0 kWh (2005)

Electricity - imports

57 million kWh (2005)

Oil - production

0 bbl/day (2005 est.)

Oil - consumption

43,000 bbl/day (2005 est.)

Oil - imports

42,620 bbl/day (2004)

Oil - exports

765.4 bbl/day (2004)

Oil - proved reserves

0 bbl (1 January 2006 est.)

Natural gas - production

0 cu m (2005 est.)

Natural gas - consumption

0 cu m (2005 est.)

Natural gas - exports

0 cu m (2005 est.)

Natural gas - imports

0 cu m (2005)

Natural gas - proved reserves

0 cu m (1 January 2006 est.)

Current Account Balance

-$446 million (2007 est.)

Agriculture - products

bananas, coffee, citrus; beef; timber; shrimp, tilapia, lobster; corn, African palm

Exports

$3.924 billion f.o.b. (2007 est.)

Exports - commodities

coffee, shrimp, bananas, gold, palm oil, fruit, lobster, lumber

Exports - partners

US 70.6%, Guatemala 3.5%, El Salvador 3.4% (2006)

Imports

$6.798 billion f.o.b. (2007 est.)

Imports - commodities

machinery and transport equipment, industrial raw materials, chemical products, fuels, foodstuffs

Imports - partners

US 53%, Guatemala 7%, El Salvador 4.5%, Costa Rica 4.1%, Mexico 4.1% (2006)

Reserves of foreign exchange and gold

$2.892 billion (31 December 2007 est.)

Debt - external

$3.871 billion (31 December 2007 est.)

Market value of publicly traded shares

$NA

Economic aid - recipient

$680.8 million (2005)

Currency (code)

lempira (HNL)

Exchange rates

lempiras per US dollar - 18.9 (2007), 18.895 (2006), 18.92 (2005), 18.206 (2004), 17.345 (2003)

Fiscal year

calendar year