Caribbean & Central America - September 2013 (ISSN 1741-4458)

On 10 September President Lobo said the executive would not present a 2014 draft budget, despite the fact that it is legally due to be sent to congress by 15 September. Lobo argued that it was pointless when a new government will take office in January. It might also be the case that Lobo doesn’t want to complicate things for his preferred successor Juan Orlando Hernández by admitting to the weak state of the economy. Following a routine staff mission visit in late August, the IMF forecast real GDP growth of about 3.0% in 2013, down on 2012’s 3.3%. The decline “reflects partly a drop in coffee production due to rust leaf disease and weaker trading partner growth”, the Fund said. Weaker exports will push up the current account deficit (roughly 10% of GDP).  Higher fuel import prices won’t help. (Honduras spent just over US$2.0bn a year on fuel imports in 2011-2012).

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