International Monetary Fund (IMF) staff and the Honduran authorities reached a staff-level agreement on the policies and reforms needed to complete the third review under Honduras’s Extended Credit Facility and Extended Fund Facility arrangements. IMF Executive Board approval is expected in June and, if approved, would allow a disbursement of about USD 155 million, noting that the statement reflects IMF staff views rather than the Board’s. The staff statement pointed to continued solid growth of 3.6% in 2024 and inflation of 4.5% in March within the Central Bank of Honduras’s tolerance range around its inflation objective, alongside a significant increase in international reserves supported by an external sovereign bond issuance, multilateral disbursements, and monetary and exchange-rate policy adjustments. Policy discussions emphasised maintaining prudent fiscal policy, including a 2025 budget deficit target of 1.5% of GDP, strengthening public procurement and public investment planning, tightening budget execution to limit accounts payable, and pursuing amendments to the Organic Budget Law to strengthen the Single Treasury Account. Priorities also included scaling up and regularising social cash transfers under Red Solidaria, improving subsidy targeting, keeping monetary policy data-dependent to anchor inflation and safeguard reserves under the crawling band exchange-rate regime, evaluating pragmatic improvements to the foreign-exchange allocation system, continuing energy-sector reforms to reduce arrears and improve the National Electric Energy Company’s operational efficiency ahead of a planned tender for new generation capacity, and advancing anti-corruption and AML/CFT reforms ahead of the Financial Action Task Force evaluation in 2026, including a beneficial ownership company registry. The staff-level agreement is expected to be submitted to the IMF Executive Board for consideration in June.
Central Bank of Honduras 2025-04-11
International Monetary Fund reaches staff-level agreement with Honduras on third Extended Credit Facility and Extended Fund Facility review enabling potential USD 155 million disbursement
The IMF and Honduran authorities reached a staff-level agreement on policies for the third review under Honduras’s Extended Credit Facility and Extended Fund Facility, with IMF Executive Board approval anticipated in June for a potential USD 155 million disbursement. The agreement highlights Honduras's 3.6% growth in 2024, 4.5% inflation within the Central Bank's target range, and increased international reserves. Key policy discussions focused on fiscal prudence, social cash transfers, energy-sector reforms, and anti-corruption measures ahead of the 2026 Financial Action Task Force evaluation.