Caribbean & Central America - December 2012 (ISSN 1741-4458)

Still no IMF deal in sight: The International Monetary Fund (IMF) arrived in town on 26 November, however there is still no sign of any new stand-by agreement (SBA) in the offing, meaning that Honduras will remain cut off from much needed sources of multilateral funding. The last SBA expired in March but the Fund is concerned at the Lobo government’s failure to meet its fiscal targets. The fiscal deficit is expected to hit HNL20bn (US$1.0bn) in 2012, according to the Foro Social de Deuda Externa y Desarrollo de Honduras (Fosdeh), or roughly 5.7% of 2011 US$ GDP. It will likely rise further in 2013, a general election year. External debt was US$4.4bn as of August, or 26% of GDP.

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