Honduran Economic Recovery To Gather Steam On The Strength Of Private Consumption Rebound

• Honduras will see robust real GDP growth in the quarters ahead as rebounding employment and strong remittance inflows power private consumption. 
• Its 2021 real GDP growth forecast was revised up to 5.0%, from 4.2% previously, and its 2022 forecast to 3.5%, from 2.9%, as economic prints in H121 constituently surprised to the upside. 
• The economic impact of the COVID-19 pandemic and the November 2020 landfalls of hurricanes Eta and Iota drove Honduras’ largest annual recession on record. While Fitch Solutions had previously expected both factors to continue limiting activity through H121, economic prints in the year through July have surprised to the upside. 
• In Q121, seasonally adjusted real GDP growth reached 6.2% q-o-q despite continued public health restrictions, suggesting that the country’s economy has become better adapted to pandemic-related disruptions. 
• However, Fitch sees significant downside risks to economic activity stemming from political instability surrounding the November 2021 presidential election.

(Source: Fitch Solutions)