Caribbean & Central America - February 2026

Honduras’ new President Nasry Asfura, of the right-wing Partido Nacional (PN), is throwing in his lot with US President Donald Trump and plans to leverage public-private partnerships to boost growth and prosperity, a sharp departure from his predecessor.

While the leftist former President Xiomara Castro (2022-2026) of the Partido Libertad y Refundación (Libre) engaged in diplomatic relations with China and focused on state-funded social programmes, Asfura has pledged to take the country in a different direction. He inherits an economy that was projected to grow by 3.8% in 2025 according to the latest (December 2025) forecast by the United Nations (UN) Economic Commission for Latin America and the Caribbean (Eclac) with inflation running at an annual rate of 4.8% in December, within the central bank (BCH) target range of 4.00% +/- 1%.

In a statement announcing the release of new funds under an ongoing arrangement in September, the International Monetary Fund (IMF) said that international reserves had grown to US$9.7bn during Castro’s term, boosting “external buffers amid a challenging global environment”.

And although statistics show that the country’s poverty rate fell from 73.6% of households in 2021 to 60.1% in November 2025, Honduras is still among the region’s poorest and most unequal countries. Many households are reliant on remittances from family members that have emigrated, which accounted for more than a quarter of GDP in 2024, according to the World Bank (WB), and high unemployment is a significant concern, with a survey published in mid-October by Instituto de la Justicia, a think tank launched in 2024 by local NGO Asociación para una Sociedad más Justa (ASJ), revealing that 30% of respondents said job creation should be Asfura’s top priority.

The unemployment rate sits at 4.9%, down from 8.9% in 2022, but analyst Luis León told Spanish news agency EFE that he believes unemployment will be Asfura’s main challenge, as the fact that so many working age Hondurans are either unemployed or under-employed “generates poverty and has serious effects on the national economy,” he said in an article published on 27 January.

Asfura campaigned with a slogan of “work and more work” and has packaged his manifesto in what he calls a “Visión 5 Estrellas (Five Star Vision)”. The president has revealed plans to generate jobs by attracting investment and developing infrastructure projects such as ports, airports, and hydroelectric dams using public-private partnerships. He is aiming to attract US private capital, leveraging close ties with the White House, after US President Donald Trump himself endorsed Asfura’s candidacy and high-ranking officials met with Asfura. One of these meetings was with US Trade Representative (USTR) Jamieson Greer who said the pair had agreed to start talks on a new bilateral trade deal.

Asfura has pledged to shrink the state and cut public spending using efficiency savings, with his first vice president María Antonieta Mejía claiming that the elimination of 38 government institutions would save L15bn (US$570m). Asfura has also named some other members of his cabinet, including new finance minister Emilio Enrique Hernández Hércules, a lawyer by training who nonetheless has experience administering public institutions. Hernández underlined that the new government will act with “total fiscal responsibility” during a press conference on 27 January, adding that public spending would be cut and a thorough analysis of state finances would be undertaken.

Hernández also said that the government had made initial approaches to multilateral organisations such as the Inter-American Development Bank (IDB), WB, IMF, and the Central American Development Bank (BCIE) in order to negotiate budgetary support, as well as confirming that an IMF mission would visit Honduras this month. Any funds disbursed would be used primarily to deal with waiting lists in the health system and repair and maintenance work on the road network, he added. 

Asfura has also appointed Roberto Lagos, an economist, as the new president of the BCH, and he pledged to maintain independence and prevent the bank being used for political ends. Bloomberg Línea, a multi-platform business news brand, cites Lagos as saying, “the BCH is not a development bank, we simply measure growth” adding: “We aren’t going to hide analysis or details to fit a narrative.” Lagos added that he would overhaul the bank’s communication strategy to focus on financial policy, rather than defending the record of the government, and said that he wouldn’t intervene in the exchange rate. “The exchange rate depends on the law of supply and demand,” he said. “We are a small and open economy.” 

Lagos also revealed that Asfura has notified the WB’s International Centre for Settlement of Investment Disputes (Icsid) that Honduras wants to rejoin. The country left in 2024 in a move which critics said would discourage foreign investment, so rejoining should be read as a positive signal from would-be investors. Lagos added that the US Treasury would provide technical support in fiscal and monetary policy, and both of these moves reflect a strong pivot to prioritising relations with Washington over Beijing. In this vein, Asfura has said that he would reevaluate Castro’s decision to embark on diplomatic relations with China instead of Taiwan, claiming that the previous alliance with the island nation had brought Honduras many more benefits than Beijing has been able to provide. He has also spoken about developing closer relations with Israel, which signed a free trade agreement with Costa Rica in December.

More generally Asfura is aiming to boost the economy in no small part by forging an alliance with the White House in the hope of extracting economic benefits, such as greater market access for Honduran exports or investment from US companies. However, critics will argue that this is simply a return to the approach of previous PN governments, with Asfura’s victory returning the party to power after it ruled from 2010-2022, first under former president Porfirio Lobo (2010-2014) and then under Juan Orlando Hernández (2014-2022). The latter notably was pardoned by Trump in December and released from a 45-year prison sentence in the US for drug and weapons related charges.

While Trump has been markedly more proactive in pursuing his policy goals in the Western Hemisphere during his second term, it is far from clear that this will translate into the kind of support needed to deal with the many problems facing the Honduran economy, particularly given his reputation for rapidly changing policy priorities. Domestically, Asfura will need to secure some significant commitments in his first 100 days in office to prevent voters from starting to believe that his government is simply offering more of what they already experienced under Hernández.

Fall in trade deficit

Honduras’ trade deficit fell to US$5.69bn for the period January-September 2025, down 8.2% compared to the same period in 2024, due in part to a significant increase in coffee prices, while the US remains its main trading partner, accounting for almost half of exports and nearly a third of imports. 

Leaving Icsid

Honduras left Icsid in 2024 amid a dispute with Honduras Próspera, one of the so-called employment and economic development zones (Zedes), the legislative framework for which was revoked by the Castro government in 2022 [EB-24-03]