Honduras WT/TPR/S/234/Rev.1 
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 I. ECONOMIC ENVIRONMENT 
(1) O
VERVIEW  
1. At the time of its previous Trade Policy Re view in 2003, Honduras was in the process of 
implementing a structural economic adjustment pr ogramme as set out in the Poverty Reduction and 
Growth Facility arrangement concluded w ith the International Monetary Fund (IMF).1  Positive 
results were achieved in reducing inflation and, to a lesser extent, decreasing the external debt 
burden.2 
2. Although development indicators have conti nued to improve over recent years Honduras, 
which has an estimated per capita income of US $1,829 in 2009 (compared to US$1,200 in 2003), is 
still one of the poorest countries in Latin America.  It is estimated that one third of the population 
lives on under US$2 a day.3  The main identified causes of povert y are:  an inadequate rate of 
economic growth;  unequal distribution of income;  a low level of secondary, technical and higher 
education;  shortcomings in the road infrastruct ure;  and low productivity on the part of the labour 
force.  Additionally, Honduras has experienced a series of natural disasters which have made a 
significant dent in the country's development.  In 2009, Honduras's ranking on the Human Development Index was 112
th out of 177 countries.4 
3. The services sector generates the largest share of both real GDP (53 per cent in 2009) and 
employment (over 40 per cent).  The share of manufactures in real GDP stood at 19.7 per cent in 
2009;  in the same year the manufacturing sector's  contribution to general goods exports fell to 
23.6 per cent, down from 25.7 per cent in 2003.  Agriculture remains a key sector in the Honduran 
economy despite a fall in its share in real GDP to 12.6 per cent in 2009 (down from 14.1 per cent in 2003);  it employs over one third of the total workfo rce and contributes over half of the general goods 
exports (section (3)(i)).  The share of the mining sector in real GDP and employment is very low. 
4. The national currency is the lempira (L).  The Central Bank of Honduras (BCH) applies 
de jure  a crawling band exchange rate system although in practice the exchange  rate has remained 
fixed (at L 18.8951 per US dollar) since October 2005, resulting in an appreciation in the real exchange rate in recent years (section (3)(i)).  Th e BCH used a system of public bidding for foreign 
currency (SAPDI) to allocate the foreign currency re quired by economic agents until the third quarter 
of 2009, when the electronic system for foreign currency transactions (SENDI) came into operation.
5  
On 27 March 1945 Honduras accepted the obligations est ablished in Article VIII of the Articles of the 
Agreement of the IMF. 
(2) MACROECONOMIC DEVELOPMENT  
5. During the period 2003-2008 the annual average ra te of growth in GDP for Honduras stood at 
5.6 per cent (higher than the 3.2 per cent figure recorded in the period 1992-2001) as a result both of 
high levels of private investment and consumption, and of exports of goods and services (Table I.1).  
Private consumption was financed in part  by remittances from abroad, which rose 
                                                      
1 Honduras has had three previous PRGF arrangements with the IMF, the last of which expired in 
February 2007 (IMF, 2008). 
2 WTO (2003). 
3 IMF (2008). 
4 UNDP online information.  Viewed at:  http://hdrstats.undp.org/2009/countries/country_fact_sheets/ 
ty_fs_HRV.html. 
5 SENDI has increased the speed of transactions in  currency auctions and there has been a fall in 
currency dealers' administrative and operational costs (BCH, 2010b). WT/TPR/S/234/Rev.1 Trade Policy Review 
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from US$860 million in 2003 to US$2.844 billion in 2008.  The steady growth in the economy led to 
a fall in the open unemployment rate from 5.4 per cent in May 2003 to 3 per cent in May 2008.6  
However, it has been calculated that Honduran GDP  fell by 2.1 per cent in 2009, essentially as a result 
of the world economic crisis and the difficult domes tic political situation, both of which reduced 
exports (section (3)(i)) and the flow of remittances fr om abroad to US$2.511 billion;  it is estimated 
that the open unemployment rate as at May 2009 had risen to 3.1 per cent.7 
Table I.1 
Main economic indicators, 2003-2009 
 2003  2004  2005  2006  2007  2008 a 2009 a
Various indicators        
GDP at 2000 constant prices 
(lempiras millions) 118,841 126,247 133,886 142,678 151,678 157,990 154,717 
GDP per capita (US dollars) 1,200 1,262 1,356 1,482 1,647 1,858 1,829 
Real GDP (annual percentage change) 4.5 6.2 6.1 6.6 6.2 4.0 -2.1 
Open unemployment (percentages as at May 
each year) 5.4 5.9 4.8 3.5 3.1 3.0 3.1 
Consumer price index (end of period;  
percentage change) 6.8 9.2 7.7 5.3 8.9 10.8 3.0 
Consumer price index (average;  percentage 
change) 7.7 8.1 8.8 5.6 6.9 11.4 5.9 
Real effective exchange rate (end of period;  
percentage change)b -2.1 -1.2 3.6 0.9 2.3 9.4 0.9 
Exchange rate (lempira s per US dollar;  end 
of period) 17.74 18.63 18.89 18.89 18.89 18.89 18.89 
Monetary sector         
Broad money (M3;  percentage change) 12.1 18.0 17.4 21.7 16.7 4.9 0.5 
Interest rate on national currency loans 20.2 19.5 18.4 16.6 16.5 20.0 18.9 
Interest rate on national currency de posits 11.2 11.0 10.8 8.0 8.1 11.9 10.7 
Total credit to the priv ate sector (percentage 
change) 15.4 15.7 17.0 28.1 32.4 11.5 3.3 
Sectoral share of GDP at 2000 constant 
prices         
Agriculture, livestock, hunting, forestry and 
fishing 14.1 14.2 13.1 13.2 13.1 12.7 12.6 
Mining 0.6 0.5 0.5 0.4 0.3 0.3 0.3 
Manufacturing 22.0 21.5 21.7 21.3 21.0 20.8 19.7 
Electricity and water 1.3 1.3 1.9 2.2 2.5 2.5 2.5 
Construction 4.5 4.2 3.9 4.0 4.0 4.1 3.7 
Servicesc 48.1 48.7 49.4 49.6 49.7 51.3 53.0 
Public finances (as a percentage of GDP)         
Combined public sector deficit 5.4 2.4 1.1 1.4 1.6 1.7 2.8 
Central Government deficit 5.6 2.6 2.2 1.1 2.9 2.4 4.0 
Central Government revenue  19.6 17.2 17.6 18.1 19.1 19.8 17.4 
Central Government expenditure  25.2 19.8 19.8 19.2 22.0 22.2 21.4 
GDP by expenditure at 2000 constant 
prices (lempiras millions)         
Private sector final consumption 85,803 90,075 96,105 103,913 110,281 115,608 114,405 
Public sector final consumpti on 16,278 17,152 18,390 19,618 22,124 23,303 24,767 
Gross fixed capital formation in the private 
sector 21,114 26,003 26,455 31,044 39,087 40,304 28,290 
Gross fixed capital formation in the public 
sector 5,134 6,380 5,463 5,137 5,542 6,444 4,866 
Variation in stocks 2,769 2,999 3,056 1,317 2,061 3,560 -1,213 
Exports of goods and services, f.o.b. 71,580 81,030 85,330 86,656 88,852 92,015 80,053 
Imports of goods and services, c.i.f. 83,838 97,392 100,913 105,007 116,269 123,245 96,451 
                                                      
6 The open unemployment rate is the ratio between the unemployed population and the economically 
active population. 
7 In 2009 the activities worst affected by the rise in unemployment were manufacturing, especially 
activities which have a significant maquila  element;  construction;  and micro, small and medium-sized 
enterprises. Honduras WT/TPR/S/234/Rev.1 
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 2003  2004  2005  2006  2007  2008 a 2009 a
Memorandum item        
Current account balance (as a percentage of 
GDP) -6.8 -7.7 -3.0 -3.7 -9.0 -12.9 -4.0 
Family remittances (US$ milli ons) 860 1,144 1,788 2, 359 2,615 2,844 2,511 
Total external debt (US$ milli ons) 5,243 6,023 5,134 3,935 3,190 3,456 3,269 
Total external debt (as a percentage  of GDP) 70.7 70.4 52.8 35.9 25.7 24.7 22.7 
Net international reserves of the Central 
Bank (US$ millions) 1,282 1,801 2,163 2,614 2,514 2,460 2,116 
a Preliminary or estimated figures. 
b (-) means real depreciation. c Including trade, repairs to motor vehicles, mo torcycles, personal effects and household goods. 
Source : BCH (2010), Memoria Anual 2009 , Tegucigalpa;  and informati on supplied by the authorities. 
6. The average annual rate of inflation8, as measured by the Consumer Price Index (CPI) was 
7.4 per cent over the period 2003-2009 (down from 15.9 per cent between 1992 and 2001).  A 
considerable drop in domestic demand, the fall in world oil prices and the stability of the nominal 
exchange rate were largely behind the fall in infl ation from 10.8 per cent in 2008 to 3 per cent in 2009 
(the lowest rate for 22 years).  Price stability as part of a Monetary Programme (for a period of 
one year until 2005 and two-year periods starting in  2006) with specific inflation targets therefore 
remains the main objective of th e BCH.  Indeed, the Monetary Programme 2009-2010 set an inflation 
target for the end of 2009 of 4.5 per cent with a marg in of tolerance of plus or minus one percentage 
point and, for 2010, a target of 6 per cent, also subject to a margin of tolerance of plus or minus one percentage point.
9 
7. The Ministry of Finance is responsible for fo rmulating and implementing fiscal policy.  For 
most of the period under review, Honduras has been applying a fiscal policy which aims to reduce the 
fiscal deficit, while at the same time increasing revenue and rationalizing cu rrent expenditure.  The 
measures taken have led to a reduction in the comb ined public sector deficit from 5.4 per cent in 2003 
to 1.7 per cent in 2008.  However, it is estima ted that that deficit rose to 2.8 per cent in 2009 
(Table I.1) as a result of a si gnificant fall in total revenue.10  The main fiscal problems facing 
Honduras include demands for higher wages in organized  social sectors (the public sector wage bill, 
which accounted for 12 per cent of GDP in 2007, is the highest in the region)11, and losses made by 
certain State companies such as the National Electricity Company (ENEE).12 
8. Honduras's total external debt fell from US$5.243 billion in 2003 (equivalent to 70.7 per cent 
of GDP) to US$3.269 billion in 2009 (22.7 per cent of GDP).  That drop can largely be explained by 
the Heavily Indebted Poor Countries (HIPC) In itiative and the Multilateral Debt Relief Initiative 
(MDRI), under which Honduras has been able to redu ce its external debt with the Paris Club, the 
IMF, the Inter-American Development Bank (IADB) and the World Bank.  Some 56 per cent of all Honduras's external debt in 2009 corresponded to multilateral agencies, 25 per cent to bilateral 
agencies, and the rest to commercial bodies;  almost  93 per cent of the debt is medium- to long-term 
(over three quarters is due from the public sector).   The net international reserves held by the 
BCH rose from US$1.282 billion in 2003 (4.1 months  of imports) to US$2.116 billion in 2009 
(3.6 months of imports).
13 
                                                      
8 Percentage change at the end of the period. 
9 BCH (2010b). 
10 BCH (2010b). 
11 IMF (2008). 
12 The ENEE posted a loss equivalent to 0.4 per cent of GDP in 2008 (BCH, 2009c). 
13 The Monetary Programme 2009-2010 set a target for international reserves to cover more than 
three months of imports (BCH, 2010b). WT/TPR/S/234/Rev.1 Trade Policy Review 
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 (3) T
RADE PERFORMANCE AND INVESTMENT  
(i) Trade in goods and services 
9. Until 2008, merchandise trade in Honduras ran a growing deficit consistent with the 
development of the economy and the real effective exchange rate;  the latte r appreciated from 2005, 
leading to a fall in export competitiveness (Table I.1).  The merchandise trade deficit increased 
significantly from US$1.02 billion in 2003 to US$4.052 billion in 2008.  The trade deficit is estimated 
to have fallen to US$2.591 billion in 2009 (Table I.2) as a result of the contraction in real GDP.14  The 
external current account deficit in its turn rose from US$553 million in 2003 (equivalent to 6.8 per 
cent of GDP) to US$1.8 billion in 2008 (12.9 per cent of GDP) and fell back to US$578 million in 2009 (4 per cent of GDP).  The current account de ficit has largely been financed by significant 
inflows of foreign remittances and foreign direct investment (section (ii)). 
10. The Honduran economy is heavily dependent on international trade.  The ratio of trade 
(imports and exports) to GDP is one of the highest  in the region, averaging 132.8 per cent per year 
over the period 2006-2008.
15  In 2008 Honduras ranked 72nd among world goods exporters (where the 
countries of the European Union are taken as one trader and excluding trade between EU member 
States) and 62nd among importers.  Honduras ranked 93rd for trade in services, both as an exporter and 
an importer.16 
11. Honduras's main exports are products of the maquila  industry (goods for processing).  The 
total value of exports by the maquila  industry recorded in the bala nce of payments (Table I.2) 
amounted to US$2.852 billion in 2009 (54.9 per cent of all exports of goods), followed by exports of 
general goods (43.7 per cent), and exports of other products (1.4 per cent).  Exports from the maquila  
industry are not classified as goods exports, however, and do not appear in the Comtrade database.  
The exclusion of exports by the maquila  industry and imports of related inputs from the Comtrade 
means that exports by sectors such as textiles and cl othing and imports of inputs used in those sectors 
are significantly undervalued.17 
Table I.2 
Balance of payments, 2003-2009 
(US$ million) 
 2003  2004  2005  2006 2007a 2008a 2009a 
I. Current account  -553 -678 -290 -404 -1,116  -1,800  -578 
 Goods and services        
 Balance of goods -1,020  -1,293  -1,497  -2,027  -3,104  -4,052  -2,591  
Exports  3,754 4,534 5,048 5,277 5,784 6,458 5,196 
General goods 1,288 1,567 1,829 2,016 2,461 2,833 2,274 
Goods for processing 2,390 2,888 3,150 3,168 3,241 3,560 2,852 
Other goods 76 79 69 93 82 65 71 
                                                      
14 The main aggravating factors in the trade defic it prior to 2008 include the increase in family 
remittances and the increase in the use of personal loans an d credit cards as sources of finance;  these factors in 
turn fostered greater private consumption, mainly of imports. 
15 WTO online information.  Viewed at: 
http://stat.wto.org/CountryProfile/WSDBCou ntryPFView.aspx?Language=E&Country=HN. 
16 WTO online information.  Viewed at: 
http://stat.wto.org/CountryProfile/WSDBCou ntryPFView.aspx?Language=E&Country=HN. 
17 The data used in the Comtrade database are supplied by the Honduran National Statistical Institute. 
The BCH records both imports and exports of goods for processing in the balance of payments.  The relevant 
information is taken from the export and import certificat es of businesses which are registered under special 
regimes. Honduras WT/TPR/S/234/Rev.1 
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 2003  2004  2005  2006 2007a 2008a 2009a 
Imports  4,774 5,827 6,545 7,303 8,888 10,509 7,788 
General goods 3,178 3,884 4,467 5,218 6,707 8,226 5,952 
Goods for processing 1,592 1,941 2,076 2,084 2,180 2,283 1,835 
Other goods 4 3 1 1 1 1 1 
 Balance of services -162  -204 -229 -291 -288 -310 -193 
Revenue  591 645 700 745 781 877 896 
Transport 45 37 39 39 50 41 40 
Travel 364 414 463 515 546 619 579 
Other Services 182 194 197 191 185 217 277 
Expenditure  753 849 929 1,036 1,069 1,187 1,089 
Transport 374 439 500 532 625 694 464 
Travel 217 244 262 355 212 291 285 
Other Services 162 165 167 149 232 202 341 
 Balance of goods and services  -1,182  -1,497  -1,726  -2,317  -3,392  -4,362  -2,785  
 Balance of income -362  -446 -460 -537 -395 -420 -448 
Revenue  68 87 145 198 257 148 75 
 Interest 45 56 116 168 224 134 66 
 Other income 23 31 29 30 33 14 10 
Payments  430 534 605 735 652 568 523 
 Interest 126 127 125 112 115 99 70 
 Direct investment 292 390 479 621 535 460 441 
 Other income 12 17 0 2 3 9 12 
 Balance of goods, services and income  -1,544  -1,944  -2,185  -2,854  -3,787  -4,782  -3,232  
 Balance of transfers 991  1,265  1,895  2,450  2,671  2,982  2,654  
 Revenue from family remittances 842 1,138 1,776 2,329 2,581 2,808 2,476 
        
II. Capital account  49 51 594 1,485  1,207  80 125 
 Credit  49 51 594 1,485 1,207 80 125 
 Capital transfers 49 51 594 1,485 1,207 80 125 
 Debit  0 0 0 0 0 0 0 
        
III. Financial account  304 948 86 -472 77 1,277  375 
 Direct investmentb 391  553 599 669 926 901 484 
 Direct investment abroad -12 6 -1 -1 -2 1 -1 
 Direct investment in Honduras 403 547 600 669 928 900 485 
        
 Portfolio Investment  -7 -12 -23 -21 -22 -27 58 
Assets -7 -12 -23 -21 -22 -27 8 
 Shares and other capital participation -6 -1 -12 2 1 -4 2 
 Debt instruments -2 -11 -11 -23 -23 -23 7 
 Liabilities 0 0 0 0 0 0 50 
 Shares and other capital participation 0 0 0 0 0 0 50 
        
 Other investment  -79 407 -490 -1,119  -827 403 -168 
 Assets  -63 -59 12 84 -29 -4 122 
 Liabilities  -17 466 -502 -1,204  -797 407 -290 
        
IV. Net errors and omissions  5 41 -202 -326 -354 276 -264 
 Overall balance -194  362 187 283 -186 -167 -342 
        
V. Reserves and related headings  194 -362 -187 -283 186 167 342 
BCH reserve assets 97 -510 -346 -282 109 78 353 
Use of IMF credit -41 21 2 -114 0 0 0 
Special financing 139 128 158 113 78 89 -11 
a Provisional data. 
b Includes shares and capital participation, rei nvested dividends and profits, and other capital. 
Source : BCH. 
12. Excluding the maquila  industry, Honduras's main expor ts are still coffee, bananas and 
crustaceans (Table AI.1).  Agricultural products account for around two thirds of the general goods 
exports although constant changes in the prices of  these products on the international market in the 
past few years mean that that figure is somewh at volatile.  The share in general goods exports 
accounted for by manufactures and mining products  has declined.  Chemic als are among the most 
significant manufactures.  It is estimated that ge neral goods exports fell by 19.8 per cent in 2009 WT/TPR/S/234/Rev.1 Trade Policy Review 
Page 6 
 
 
owing to the difficult international economic situa tion and the temporary closure of Honduras's trade 
borders as a result of the domestic political crisis .  In particular exports  of bananas and coffee 
declined by 16.6 per cent and 15.6 per cent respectivel y as a result of the fall in international prices 
and export volumes.18 
13. Almost three quarters of Honduras's total imports (excluding the maquila  industry) consist of 
manufactures, particularly machinery, transport e quipment and chemical products (Table AI.2).  
Import patterns have remained relatively stable ov er recent years with the exception of imports of 
fuel, which increased, particularly in 2008, as a con sequence of the increase in the international price 
of petroleum by-products.  It has been calculated that imports of general goods fell by 30 per cent in 
2009, including a drop of 44.6 per cent in capital goods, followed by fuels and lubricants (down 38.9 per cent), construction materials (dow n 29.3 per cent), raw materials and intermediate 
products (down 28.3 per cent) and c onsumer goods (down 15.3 per cent).
19 
14. The entry into force of the Dominican Republic-Central America-United States Free Trade 
Agreement (DR-CAFTA) has consolidated th e United States as the main market for 
Honduran exports, accounting for arou nd 40 per cent of exports of general goods.  Additionally, as a 
result of increased efforts at Central American regional integration, since 2007 El Salvador, 
Guatemala, Nicaragua and Costa Rica as a group have ranked second as a destination for Honduran 
exports, knocking the European market into third place (Table AI.3). 
15. Since the signature of DR-CAFTA, the United St ates has also consolidated its position as the 
main source of Honduras's imports of general goods, accounting for over one third of the total.  The 
United States is followed by Central America (l ed by Guatemala) with one quarter, the 
European Union (principally Germany) and Mexico (Table AI.4).  Asian countries (mainly China and 
Japan) are also significant trading partners in terms of Honduras's import figures. 
16. Almost 90 per cent of Honduras's exports of goods  for processing consists of clothing, knitted 
or crocheted fabrics, textiles, and yarn a nd thread.  The remainder of exports from the maquila  
industry comprises machinery and electrical equipment (9  per cent of the total), transport equipment, 
and plastic and other products.  Textiles and their manufacture account for around 80 per cent of all 
imports of goods for processing, followed by chemical  products (5 per cent) and plastics (4 per cent).  
The United States is the destination for almost 80 per cent of exports by Honduras's maquila  industry 
and the source of 80 per cent of imports.20 
17. Balance of payment figures show that Honduras is  a net importer of services with an annual 
average deficit of around US$240 million over th e period 2003-2009.  Total income from services 
(mainly travel services) increased from US$591 million in 2003 to US$896 million in 2009, while 
total expenditure on services (largely transport and travel services) rose from US$753 million to 
US$1.089 billion over the same period (Table I.2). 
(ii) Foreign direct investment 
18. Since its previous Review, Honduras has been  striving to promote foreign and domestic 
investment in order to assist its economic and so cial development.  Further initiatives are needed, 
however, to make the most of its structural potentia l for attracting foreign direct investment (FDI).  
For example, the Investment Law of 1992 and its Regul ations restrict investment by foreigners in 
small enterprises and impose other restrictions on bo th Honduran and foreign private investment in 
                                                      
18 BCH (2010b). 
19 BCH (2010b). 
20 BCH (2010a). Honduras WT/TPR/S/234/Rev.1 
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areas which include telecommunications;  the generati on, transmission and distribution of electricity;  
air transport;  hunting, fishing a nd aquaculture;  the exploitation of forest resources;  research, 
surveying and exploitation of mines, quarries, hy drocarbons and their by-products (Chapter II(5)). 
19. Table I.3 shows that FDI into Honduras av eraged US$729 million annually in 2004-2008 (up 
from US$113 million in 1999-2000), mainly reflecting the positive trend in the economy over that 
period.  The flow of FDI is, however, estimat ed to have dropped from US$900 million in 2008 to 
US$485 million in 2009 as a result of the global econom ic crisis and the difficult domestic political 
situation, both of which prevented profits from be ing reinvested and new investments being made, 
mainly in activities involving goods for processing ( maquila  industry).21  Almost 90 per cent of all 
inflows of FDI into Honduras is channelled into business enterprises, with the remainder going to 
maquila  firms.  FDI flows rose from 5.1 per cent of GDP in 2000 to 6.4 per cent in 2008 while the 
stock of FDI in Honduras rose from 19.4 per cent of GDP to 36.2 per cent over the same period.22 
Table I.3 
Foreign direct investment flows, 2004-2009a 
(US$ million) 
 2004 2005 2006 2007 2008 2009  
FDI Total  546.7 599.7 669.1 927.5 900.2 484.9 
FDI in business enterprises 371.8 403.9 484.2 707.9 798.2 427.5 
FDI in the maquila industry 174.9 195.8 184.9 219.6 102.0 57.4 
FDI in business enterprises by country of origin       
United States 115.8 163.4 263.4 378.5 344.4 303.9 
Mexico 35.9 44.4 30.8 95.5 45.3 130.5 
Canada 40.8 12.3 41.7 26.4 2.1 5.9 
Guatemala 9.0 25.2 16.5 15.4 44.6 13.8 
El Salvador 17.7 26.1 28.2 7.5 0.2 9.6 
Nicaragua 5.7 5.0 13.1 7.2 8.3 3.3 
Costa Rica 6.6 -2.4 2.1 7.8 4.0 6.1 
Panama 21.7 20.5 16.4 23.8 15.4 1.0 
Bahamas 4.8 23.5 1.8 -20.1 0.0 32.4 
United Kingdom 61.0 47.4 45.2 97.9 82.4 -93.7 
Netherlands 3.6 3.3 4.6 2.5 1.9 -11.3 
Germany 14.4 -1.8 -0.3 20.7 15.3 -12.5 
Switzerland 23.7 16.4 0.4 6.7 5.1 11.6 
Italy 6.0 3.7 2.8 5.4 1.8 1.6 
France 0.0 15.8 3.4 26.1 0.0 0.0 
Japan 0.1 0.3 0.0 0.0 227.4 17.0 
Other 5.0 0.8 14.0 6.6 13.3 8.4 
FDI in business enterprises by economic activity       
Agriculture and fishing 58.4 53.1 43.4 11.2 3.2 2.2 
Mining and quarrying 40.9 13.5 42.6 18.9 0.0 8.5 
Manufacturing 106.7 74.3 42.5 164.4 118.8 74.5 
Electricity and water 7.2 10.0 5.9 9.3 15.2 2.1 
Construction 0.8 -1.3 -1.3 9.1 25.2 10.3 
Trade, restaurants and hotels  23.3 108.4 116.3 71.5 13.1 -16.3 
Transport, storage and communications 81.1 98.4 168.2 282.7 493.5 293.5 
Financial establishments, insurance, immovable property 
and business services 53.4 47.5 66.6 142.6 129.2 53.1 
FDI in maquila  by country of origin       
United States 75.8 140.0 75.9 81.7 64.0 29.8 
Canada 37.9 4.5 65.6 112.6 42.2 19.9 
Republic of Korea 16.8 17.5 10.9 10.9 3.2 2.9 
Switzerland 0.0 7.0 6.6 7.2 0.0 1.6 
Chinese Taipei 4.2 6.4 10.6 5.7 0.0 1.1 
United Kingdom -0.1 1.0 4.1 5.0 0.0 1.1 
El Salvador 1.4 0.9 0.2 1.0 0.0 0.0 
Spain 4.3 1.3 3.9 0.1 0.0 0.0 
China -0.5 0.1 0.0 0.1 0.0 0.0 
Hong Kong, China 0.1 0.2 0.1 0.0 0.7 0.1 
Colombia 2.8 1.1 0.0 0.0 0.0 0.0 
                                                      
21 BCH (2010b). 
22 UNCTAD (2009). WT/TPR/S/234/Rev.1 Trade Policy Review 
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 2004 2005 2006 2007 2008 2009  
Israel -0.2 -0.2 -0.3 -0.4 -0.3 -0.1 
Panama 0.0 0.5 -0.2 -1.7 -1.5 -0.4 
Germany 2.2 0.8 0.4 -2.8 -8.1 -1.1 
Mexico 0.2 0.6 7.0 -3.4 0.4 0.5 
Other 29.9 13.9 0.1 3.6 0.0 1.0 
FDI in maquila  by economic activity        
Textiles 92.2 76.3 127.3 197.6 84.7 57.0 
Trade -3.3 8.0 16.3 5.8 0.5 0.4 
Agriculture and fisheries 7.7 7.8 8.2 4.3 -1.7 -1.1 
Business services 20.7 22.9 32.0 20.0 4.7 3.1 
Electronic components 28.7 65.3 2.3 -5.3 -4.0 -2.7 
Plastic products 0.0 0.6 0.4 0.1 0.3 0.2 
Manufacture of furniture and wood products 0.5 -0.4 0.5 -1.5 -1.2 -0.8 
Manufacture of tobacco products 22.4 5.3 -0.1 -3.6 1.4 0.9 
Manufacture of paperboard products 3.8 3.3 -9.1 1.9 0.0 0.0 
Chemical products 0.0 2.7 0.0 0.0 0.1 0.1 
Energy and water 0.0 0.4 0.5 0.0 0.0 0.0 
Other industries 2.2 3.5 6.6 0.2 0.5 0.4 
a Provisional data. 
Source : BCH (2008):  Flujos de Inversión Extranjera Directa en H onduras:  Año 2007 y previsiones para el Año 2008 , 
Tegucigalpa;  and information provided by the authorities. 
20. The United States is the main source of foreign investment in Honduras, accounting for 
around 50 per cent of the FDI inflows into business enterprises and the maquila  industry in the period 
2004-2009.  Other important investors in that period were Mexico, Canada, the United Kingdom, 
Panama, Guatemala and  El Salvador.  The transport, storage and communications sectors were the destination for almost half of all FDI flows into  business enterprises during that period, followed by 
the manufacturing sector with 18 per cent.  The textile  industry accounted for two thirds of all FDI in 
the maquila  sector. 
(4) O
UTLOOK  
21. The outlook for the Honduran economy is largel y dependent on the globa l economic recovery 
and the return to political stability in the country .  Success in those areas would foster a rebound in 
Honduras's exports by increasing demand in its principa l markets, mainly the United States, its largest 
trading partner23;  increasing foreign remittances24;  having a significant positive effect on flows of 
FDI into tourism, telecommunications, the maquila  industry and other sectors;  and facilitating foreign 
borrowing and international aid.25  Given that tariffs account for a relatively low percentage of all 
public sector tax revenue (7.1 per cen t on average per year in 2006-2008)26, no significant impact on 
the public finances is anticipated as a result of the reduction planned for the next few years in 
Honduras's tariffs in the light of the recent signatu re of preferential trade agreements and other 
agreements under negotiation (Chapter II(5)(ii)).  Th e IMF is forecasting a GDP growth rate of 2 per 
cent in Honduras for 2010, an average inflation rate of  5.1 per cent and a current account deficit (as a 
percentage of GDP) of 6.1 per cent.27 
                                                      
23 The IMF estimates that a 1 per cent deceleration in  the US economy would lead to a similar fall in 
the Honduran GDP, essentially as a result of the impact on exports (IMF, 2008). 
24 Remittances accounted for around 17 per cent of GDP in 2009 and finance a considerable proportion 
of private consumption. 
25 Honduras is calculated to have lost over US$2 b illion in international aid during its political crisis in 
2009 ( El País , 28 January 2010). 
26 WTO online information.  Viewed at:  h ttp://stat.wto.org/Countr yProfile/WSDBCountry 
PFView.aspx?Language=E&Country=HN. 
27 IMF (2010). Honduras WT/TPR/S/234/Rev.1 
 Page 9 
 
 
22. The main objectives of the Visión de País 2010-2038  and the Plan de Nación 2010-2022  
include real average annual growth in GDP of 7 pe r cent in 2022 and 9 per cent in 2038, largely as a 
result of the forecasted increase in the ratio of expor ts to GDP from the current figure of 50 per cent to 
61 per cent in 2022 and to 75 per cent in 2038.28 
                                                      
28 Republic of Honduras (2010).