The Santiago-based ECLAC, said that the unstable political situation in the country had a negative impact on Honduras’ economy, which is highly dependent on external aid.
“Honduras is submerged in a deep political polarization, and strong restrictions on its economic growth are visible, which are the product of the events that occurred in 2009,” the ECLAC said.
From June 28th until Nov. 30th, Honduras lost more than 1.1 billion U.S. dollars in aid, according to the Honduran Social Forum on External Debt and Development.
The domestic political stalemate has also diverted the country’s attention from revealing an anti-crisis plan against the backdrop of the global financial crisis.
Given the grave economic situation of the nation, the ECLAC noted that the new government, led by President-elect Porfirio Lobo, would face a very difficult situation, as he has not been largely recognized by the international community,.
According to the ECLAC, the gross domestic product (GDP) of Honduras is expected to end the year 2009 with a contraction of 3 percent, against the previously forecasted growth of 2.5 percent.
Meanwhile, the Central Bank of Honduras (BCH) projected a worse outcome, between minus 1 and minus 2 percent, explaining that the Honduran economy, as a whole, had contracted by 3.2 percent from January to September.
Additionally, during that period, the country’s economy had decreased 34.7 percent in terms of the construction sectors. These sectors suffered a “lack of financing and the reduction of capital incomes through direct foreign investments” that dropped by 40 percent, the BCH added.
“It reflects the negative effects of the world recession, and the uncertainty produced by the internal political crisis,” the Central Bank explained.
Moreover, “due to the drop of the incomes and the impossibility of getting external financing,” the ECLAC said the internal debt has grown almost 80 percent.
Also, the lack of foreign investments, and the 11 percent reduction of remittances contributed to a greater governmental deficit, which has risen from 2.4 percent of the GDP to 4.5 percent.
A drop in the imports of goods and services by 22 percent might also exacerbate the plight, while 650,000 people in the country are living in extreme poverty.
As for next year, Honduras has projected negative growth, and its external debt of 3.6 billion dollars has become almost unpayable.
Although the international community had promised Honduras a package of financial aid, Lobo stressed earlier this month that international aid worth at least 2 billion U.S. dollars would be at stake if the political crisis in his country is not solved.
The fund, according to the president-elect, was related to the aid programs of many countries and organizations, including the Central American Bank for Economic Integration (CABEI) and the Inter-American Development Bank (IDB).
6 Responses to "Honduran Economy Looking Bleak"
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HONDURAS… The brave, little country shining on a hill for all the World to see.
Shame, Shame on Obama and Clinton… small, petty, bitter, vindictive socialists.
Honduras needs one thing and one thing only.
That is to be seen for what it is.
And what it is, is a freedom loving country that got stepped on by the boot of Obama & Co.
If it was not for the horribly flase, unfair and ill timed accussations that Obama & Clinton made about how the ousting of Zelaya came to be, we would not be in the present situation.
Obama decided to cut aid moneys at a time when the whole world is going through economical turmoil, it does not take a rocket scientist to imagine the kind of hurt that cutting that aid would do to Honduras, so nobody would ever fool me about Obama’s reasoning and intentions, he wanted to punish Honduras for getting read of a “Leftie” like him, no ifs, buts or maybes about that.
And as long as Obama does not make a 180 degree turn, Europe and many other countries that deal with us will still turn their back on us.
It is hard for people to break old habits, and the habit of trusting America as being a good judge of character is what many world leaders are practicing now, but the current American Administrati0n does not hold dear the old believes that Communism is a poison for the people, it seems more like if they are actually pushing for that agenda.
Honduras is in for a tough ride unless we find a way to clean our name.
We did not do anything wrong, the people of the world have to hear that message.
“Free Honduras”…… I completely agree with you!
Honduras has gone thru some tough times, both politically and economically. BUT…. I know Honduras will survive and come out of this stronger.
We are a free people and the world has learned that we demand that our government follow the rule of law and the Constitution!!!
Obama and Clinton should hide their tails between their legs, run and hide in shame for the lies and outright dishonest positions they have taken about Honduras.
I wish Lobo would kick the U.S. military out of the country until the U.S. government publicly appologizes and states they were wrong in their statements about Honduras.
This is our country, and we should not sit back and idolly take the insults from the U.S. government, but should let them know they need us also.
Vive Honduras.
you are 100% right ……….i have a honduran flag pin on my cap , becouse of that many ask me about honduras ….. now people ask me how can you have a military coup and a presidental election with 5 candidates at the same time……so i explain the coup thing was invented by the crooked president that got booted out ….
Don’t lose hope! Although the circumstances were sad and difficult, the proud country of Honduras has received unprecedented publicity for the past 6 months. The criticism will die down, but many more people now know where Tegucigalpa is. At least Obama does now, ha ha.
No, en serio, this will turn out to be a silver lining. Viva Honduras!
The international community should be ashamed of itself for increasing the poverty in Honduras. It is another indication of the growing hatered and spite that world leaders have for democracy and the will of a country’s people.
I love Honduras and am so proud that we have stood strong against world pressure to disobey the laws of the land. The loss of aid is nothing compared to the loss of liberty that would have occured had Zelaya remained in power. People loose their lives to defend liberty because it is much more precious than money.
– Free Honduras