View the information below regarding the economy of Honduras. The summary and statistics contains
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GDP: $6.6 billion.
Growth rate: 2.0%.
Per capita GDP: $925.
Natural resources: Arable land, forests, minerals, and fisheries.
Agriculture (12% of GDP): Products--coffee, bananas, shrimp and lobster, sugar, fruits, basic grains, and livestock.
Manufacturing (18% of GDP): Types--textiles and apparel, cement, wood products, cigars, and foodstuffs.
Trade: Exports--$1.3 billion: coffee, shrimp, bananas, zinc/lead concentrates, soap/detergents, melons, lobster, pineapple, lumber, and tobacco. Major market--U.S. (49%). Imports--$3.0 billion: machinery, chemicals, petroleum, vehicles, processed foods, metals, agricultural products, plastic articles, and paper articles. Major source--U.S. (46%).
Economy of Honduras
Honduras is one of the poorest and least developed countries in Latin America. The economy was traditionally based on agriculture, which accounted for 12% of GDP in 2001 and employed more than 40% of the work force. Hit by plummeting world prices, coffee accounted for only 12% of all Honduran exports in 2001, down from almost 25% in 2000. Coffee revenues in 2001 were down to $161 million from $340 million in 2000. The coffee industry was further hurt in 2002 by cold weather and torrential rains that caused the harvest to decrease to 2.1 million sacks for 2002-03. Bananas, formerly the country's second-largest export until being virtually wiped out by 1998's Hurricane Mitch, recovered in 2001 to 60% of pre-Mitch levels and generated $197 million in export revenues. Cultivated shrimp are another important export generating $125 million in 2001. Honduras has extensive forest, marine, and mineral resources, although widespread slash-and-burn agricultural methods continue to destroy Honduran forests. The gross family remittances from Hondurans living abroad (mostly in the United States) rose 27% to $700 million in 2002. The currency (lempira) in 2002 was exchanged to the U.S. dollar at 16.92, which showed a nominal depreciation of 6.3% for the year.
Unemployment is estimated at around 4.2% in 2001, though underemployment is much higher. The Honduran economy grew 2.0% in 2002, which was lower than economic growth rates of 2.7% in 2001 and 4.7% in 2000. The Honduran maquiladora (garment assembly) sector, the third-largest in the world, continued its strong performance in the first month of 2003 with the announcement of 8,000 new jobs. The industry provides employment to more than 110,000 workers and generated more than $600 million in foreign exchange for Honduras in 2001. The economic slowdown in the United States caused Honduras' maquila sector growth to stagnate in 2001 and employment in the sector to declined from 125,000 in 2000 to 110,000 in 2001.
Inflation, as measured by the consumer price index, was 8.1% in 2002, down slightly from the 8.8% recorded in 2001. The country's international reserve position continued to be strong in 2002, at slightly over $1.5 billion.
Honduras received significant debt relief in the aftermath of Hurricane Mitch in late 1998, including the suspension of bilateral debt-service payments and bilateral debt reduction by the Paris Club--including the United States--worth more than $400 million. In July 2000, Honduras reached its decision point under the Heavily Indebted Poor Countries initiative (HIPC), qualifying the country for interim multilateral debt relief. In 2001, the International Monetary Fund (IMF) and World Bank approved Honduras’ Poverty Reduction Strategy Paper (PRSP), making Honduras eligible for $900 million in debt relief in present value terms, upon its completion point. Since that time, fiscal problems have derailed the government’s IMF program and put the HIPC debt relief on hold. Honduras is currently negotiating with the IMF on the terms of a new 3-year Poverty Reduction and Growth Facility program.