Honduras Economy—overview: In 1994 the REINA administration inherited an economy in the grips of stagflation due to an unprecedented energy crisis declining agricultural output and extravagant public expenditures. In response the REINA administration cut the fiscal deficit and enacted a number of structural reforms including passage of a modern financial sector reform law in 1995 and a central bank reform law in 1996. As a result Honduras finished 1997 with improved GDP growth and a decreasing rate of inflation. The newly elected FLORES administration faces pressure from the international financial community and the IMF to further decrease the fiscal deficit and implement key reforms including the privatization of state enterprises such as Hondutel. Tegucigalpa will probably implement tighter fiscal and monetary policies to keep inflation low and meet commitments to the IMF. This may slow GDP growth to 3.5% in 1998. Moreover wage increases for public-sector employees agreed to in 1997 will make it difficult for FLORES to make headway on the fiscal deficit and inflation. GDP: purchasing power parity—$12.7 billion (1997 est.) GDP—real growth rate: 4.5% (1997 est.) GDP—per capita: purchasing power parity—$2 200 (1997 est.) GDP—composition by sector: agriculture: 20% industry: 19% services: 61% (1997) Inflation rate—consumer price index: 15% (1997 est.) Labor force: total: 1.3 million (1997 est.) by occupation: agriculture 62% services 20% manufacturing 9% construction 3% other 6% (1985) Unemployment rate: 6.3% (1997); underemployed 30% (1997 est.) Budget: revenues: $655 million expenditures: $850 million including capital expenditures of $150 million (1997 est.) Industries: sugar coffee textiles clothing wood products Industrial production growth rate: 10% (1992 est.) Electricity—capacity: 305 000 kW (1995) Electricity—production: 2.8 billion kWh (1995) Electricity—consumption per capita: 516 kWh (1995) Agriculture—products: bananas coffee citrus; beef; timber; shrimp; Exports: total value: $1.3 billion (f.o.b. 1996) commodities: bananas coffee shrimp lobster minerals meat lumber partners: US 54% Germany 7% Belgium 5% Japan 4% Spain 3% (1995) Imports: total value: $1.8 billion (c.i.f. 1996) commodities: machinery and transport equipment industrial raw materials chemical products manufactured goods fuel and oil foodstuffs partners: US 43% Guatemala 5% Japan 5% Germany 4% Mexico 3% El Salvador 3% (1995) Debt—external: $4.1 billion (1995) Economic aid: recipient: ODA $NA Currency: 1 lempira (L) = 100 centavos Exchange rates: lempiras (L) per US$1 (end of period)—13.1332 (January 1998) 13.0942 (1997) 12.8694 (1996) 10.3432 (1995) 9.4001 (1994) 7.2600 (1993) Fiscal year: calendar year
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