Honduras and IMF successfully concluded third review of the economic program under the Stand-By Arrangement

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The Government of the Republic of Honduras

Nov 02, 2020, 09:02 ET

IMF mission highlighted the commitment of Honduras Government to fiscal prudence responses to the pandemic needed to foster strong and inclusive growth.

TEGUCIGALPA, Honduras, Nov. 2, 2020 /PRNewswire/ -- Honduras Government and a technical team of the International Monetary Fund reached an agreement on the Third Review of Honduras' IMF-supported program under the Stand-By Arrangement (SBA) and the Stand-by Credit Facility (SCF).

The IMF team led by Esteban Vesperoni conducted a mission via videoconference and after its conclusion, the international organism issued a statement acknowledging the commitment of Juan Orlando Hernández Government to fiscal prudence responses to the pandemic, which has been instrumental to maintain confidence and access to international capital markets. "The authorities have also taken decisive monetary and financial measures to cushion the impact of the crisis, including by reducing the monetary policy rate, stepping up liquidity provision, implementing schemes to guarantee new credits—both to SMEs and large companies—and support restructuring of credits".

The IMF team led by Esteban Vesperoni emphazided that the authorities have also maintained their commitment to mobilize revenue to protect social spending and investment, reform the electricity sector, and continue strengthening the monetary policy and financial regulatory and supervisory frameworks. "Building on those implemented over last years, these reforms continue to strengthen Honduras's policy framework".

"Notwithstanding the challenges placed by the pandemic, the authorities have made important progress in implementing structural reforms needed to foster strong and inclusive growth, notably to enhance governance and improve the business environment".

'IMF staff and the Honduran authorities held productive discussions regarding Fund support for the authorities' economic policies, including the evolving policy response to the pandemic. Subject to approval by the IMF Executive Board, staff proposes completing the third review, which would allow a disbursement of SDR 62.5 million (about $88 million)" said the statement.

According to the IMF, the economy is now expected to contract by about 7 percent in 2020 and recover by close to 5 percent next year.

Minister of finance Marco Midence highlighted that this agreement is an outstanding achievement and it will allow Honduras to access concessional credit amidst the economic social and economic reactivation of the country.

For more information: https://www.imf.org/en/News/Articles/2020/10/30/pr20327-Honduras-IMF-and-Honduras-Reach-a-Staff-Level-Agreement-Third-Review-under-the-SBA-SCF

SOURCE The Government of the Republic of Honduras