Honduran Fiscal Deficit To Narrow Gradually As Pandemic-Related Expenditures Remain High

• Honduras’ economic recovery will boost government revenues, narrowing the fiscal deficit in in the quarters ahead. 
• However, the persistent effects from the COVID-19 pandemic and hurricanes Eta and Iota have contributed to slower rebound in government revenues than previously expected. As a result, the agency has revised its 2021 and 2022 fiscal deficit forecasts to 6.2% and 5.1% of GDP, from 5.9% and 3.1% previously. 
• Fitch forecasts that public debt will rise moderately, peaking at 64.6% of GDP in 2023, from 54.5% in 2020. That being said, the possibility of a leftist candidate winning the November 2021 presidential election and significantly boosting spending poses upside risks to this forecast.

(Source: Fitch Solutions)