New Paper Examines Key Economic, Social Indicators Since the Previous Administration, and Before

Washington, DC — Ahead of the November 30 elections in Honduras, a new paper from the Center for Economic and Policy Research (CEPR) examines the Honduran economy, and how its slow recovery from setbacks due to the COVID-19 pandemic, hurricanes, and reversals under post-coup governments may affect voter sentiment.

“In Honduras, as in the US and many other countries, voters’ sense of economic security and hope for a brighter future could be the determining factor,” coauthor and CEPR International Research Director Jake Johnston said. “The past four years have seen some previous economic gains restored, despite adverse circumstances.”

Honduras has made economic progress in the four years since former president Juan Orlando Hernández left office. The period following the 2009 coup d’etat saw a reversal of progress made under former President Manuel Zelaya on social outcomes, with inequality, poverty, unemployment, and social spending all initially worsening under subsequent National Party governance. In 2019, just before the pandemic hit, poverty remained unchanged from its level 10 years earlier at the time of the coup. Honduras then experienced an economic downturn during the COVID-19 pandemic, with the economy contracting by more than 10 percent and poverty rates increasing to over 70 percent. The Honduran economy was set back further by two hurricanes.

Since President Xiomara Castro has been in office, “Poverty has come back down to pre-pandemic levels, inequality is continuing its downward trend, both public and private investment has reached new heights, and the country finds itself in a more sustainable economic position with low external debt,” the paper notes. 

The issue brief looks at Honduras’s economic growth, which remains relatively strong; poverty, which has been reduced by nearly 15 percent since Hernández left office; income, which has been boosted by a 12 percent increase in the real average minimum wage; income inequality, which has been in decline over the past decade; unemployment, which has been declining since 2021; public sector investment, which has been boosted under Castro; remittances, which have generally remained steady; and external public debt, which has modestly decreased.

“The modest economic gains and renewed social focus that we’ve seen in Honduras over the past several years could be an important factor in the upcoming election,” Johnston said. 

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