Honduras: First and Second Reviews Under the Extended Fund Facility and the Extended Credit Facility Arrangements, and Requests for Waivers of Nonobservance of Performance Criteria and Rephasing of Purchases-Press Release; Staff Report; and Statement

The Executive Board approved 36-month, US$822 million arrangements under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF) for Honduras in September 2023. The IMF-supported program aims to strengthen macroeconomic stability, create fiscal space for productive investment and social spending, and improve governance and transparency. The economy remains resilient, despite external and climate shocks and long-standing impediments to growth. Early estimates suggest that the macroeconomic impact of Tropical Storm Sara, which recently hit Honduras, is expected to be small. Achieving internal consensus on the needed recalibration of monetary and exchange rate policies to bolster external stability has been protracted, partly amid concerns over the potential social impact, and delayed the completion of reviews under the program. The authorities remain firm in their commitment to achieve program goals and have begun implementing decisive measures to bolster external stability and restore the financial health of the energy sector.