Honduras > Snapshot

Honduras, a Central American country 8 million people, of  is among the poorest countries in the Western Hemisphere, with average GDP per capita at $1,826 per year. Remittances accounted for roughly 20% of GDP in 2008, raising disposable income and fueling consumption. However, with the recession in the United States and limited job opportunities for Honduran migrants as well as the economic complications related to the overthrow of the Honduran government  in June 2009, domestic demand and consumption has declined.

Honduras has the third largest maquila (manufactured export processing) sector in the world. The majority of Honduras’ incoming FDI has in recent years been invested in maquilas (offshore manufacturing assembly for export). Yet with increased competition from low-wage countries in Asia countries as well as El Salvador, Guatemala and Nicaragua, Honduras is seeing decreases in FDI directed toward maquilas. Nearly one quarter of Honduras’ GDP is derived from agriculture (coffee, bananas, shrimp and palm oil), and nearly one quarter of Honduran export revenue comes from coffee sales. Honduras is rich in natural mineral resources (zinc, gold, ) but due to strict and complicated mining laws which are currently being revised, exports of gold have stalled.

While Honduras has strived to open its economy to greater competition and encourage foreign investment to diversify economic activity, the government continues to crowd out the private sector in several key areas (e.g. utilities and sanitation services, telecommunications, maritime ports and rail). While the government has opened up some areas to competition, such as electricity generation, the private sector companies that have entered the market (ELCOHSA, LUFUSA, EMCE and Laeisz Comercial) which are all Honduran, face uncompetitive behavior by the government entities which makes market competition difficult.

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Key insights for investment for the local market

How to invest in Honduras

How to do business in Honduras

How to bank in Honduras

Macroeconomic environment

Microeconomic environment

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