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Economy & Business - October 2021

ECONOMIC HIGHLIGHTS

HONDURAS | IMF expands assistance. On 13 September the International Monetary Fund (IMF) announced that its executive board had completed the fourth review of Honduras’ performance under its economic programme supported by a Stand-By Arrangement (SBA) and an arrangement under the Standby Credit Facility (SCF). It announced that it has approved an additional US$215.8m in loans and extended the duration of the SBA and SCF by two months until 14 January 2022. The two-year arrangements under the SBA and SCF were approved on 15 July 2019. According to the IMF, the completion of the review allows for immediate disbursements of US$125.8m to help Honduras meet its balance of payments and fiscal financing needs, which have been exacerbated by the ongoing coronavirus (Covid-19) pandemic and the effects of tropical storms ‘Eta’ and ‘Iota’ which made landfall in November 2020. According to the IMF, Honduras’ worse than expected economic contraction in 2020 (-9%) will only be partly reversed in 2021, with the Fund forecasting that GDP will grow 4.5%. The IMF adds that while the ongoing health emergency and significant reconstruction from Eta and Iota warrant a temporarily looser fiscal stance, the authorities “remain steadfastly committed to macroeconomic stability, fiscal responsibility, and structural reforms”.

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