Honduran economy grows 4% by March amid external demand and remittance surge

The Honduran economy demonstrated moderate dynamism in the first months of 2026, registering a cumulative increase of 4.0% in the Monthly Economic Activity Index (IMAE) up to March. This performance, detailed in the May Economic Bulletin by the Honduran Council of Private Enterprise (Cohep), was primarily fueled by robust external demand for key agro-industrial products like coffee, bananas, pineapples, and tilapia, benefiting from favorable international prices. Additionally, increased family remittances contributed significantly to this economic uptick.

The agricultural sector, encompassing farming, livestock, forestry, and fishing, saw a notable growth of 2.8%. This expansion was propelled by the production of bananas, African palm, fruits, and coffee, alongside increased fishing yields. However, the Cohep bulletin also highlighted significant risks associated with climate change. Conditions associated with the El Niño phenomenon are expected to intensify, moving from a weak intensity in mid-May to a "very strong" category between August and September.

The departments most vulnerable to these climate impacts are those in the dry corridor: Francisco Morazán, El Paraíso, Valle, and Choluteca. The effects of climate change pose a substantial threat to agricultural production, food prices, and overall economic growth, with an estimated 1.8 million Hondurans facing food insecurity risks.

In terms of inflation, the Consumer Price Index (IPC Total) accumulated a rise of 3.12% between December 2025 and April 2026. While most sectors remained stable, transportation costs experienced a concerning escalation of 10.55%. This surge is attributed to international volatility in fuel prices, stemming from the Middle East conflict and disruptions in oil maritime transport. Other components of the basic food basket showed stable behavior, with Housing and Energy up 2.08% and Food and Non-Alcoholic Beverages up 1.89%, while Clothing and Footwear fell 0.76% and Information and Communications decreased 1.23%.

Regarding its agreement with the International Monetary Fund (IMF), Honduras reached a technical completion of the fourth and fifth reviews of the Extended Credit Facility (SCA) and the IMF's Extended Fund Facility (SAF) on May 11, 2026. Pending approval from the Executive Board in late June, this would allow for a disbursement of approximately $245 million. To date, Honduras has received over $485 million from the program, which totals $822 million and was signed in September 2023. Public finances show that as of May 18, 2026, the General Government's floating debt exceeded 24.67 billion lempiras (2.4% of GDP), with 51.7% owed by national public companies, predominantly the National Electric Energy Company (ENEE).