According to countryaah, Honduras is one of the poorest countries in Central America, and the economy is dependent on commodity exports, mainly coffee, sugar cane and bananas. This makes the country’s economy very sensitive to world market prices, which were falling for these products during the 1990s. The situation for the country’s commodity exports worsened further in 1993, when the EU imposed tariff restrictions on banana imports.
During the early 2000s, the country enjoyed good economic growth, mainly as a result of the establishment of compound factories (maquiladoras) in the country and the expansion of tourism and the construction industry. During the first eight years of the 1990s, the country had stable GDP growth. The financial crisis 2008–09 and the 2009 state coup were hard blows to the country’s business and positive economic development was reversed. In the 2010s, the country’s manufacturing and construction industries began to recover, but the tourism industry is still suffering from the unrest that followed the coup d’etat.
Honduras has had a large foreign debt for many years, and in 2005 the country was approved for debt relief under the HIPC initiative. This meant some debt reduction, but the country is still heavily indebted.
The country is heavily dependent on the US as an exporting country as well as as aid and lenders.
For information on GDP and other business statistics, see Landsfakta.
Agriculture, forestry and fishing
Agriculture, forestry and fishing employ almost 40 per cent of the workforce, even though only 18 percent of the land is suitable for cultivation. The best soil in the lowlands is owned and used by the large US-owned banana companies Chiquita and Standard Brands. Production of basic crops such as maize, beans and rice for local consumption is managed by small farmers on usually poorer soils.
At least half of the rural population are landless farmers. Meat production has decreased in importance due to falling world prices and inefficient organization.
The forest is exploited heavily, among other things by harvesting for the production of hardwood. Fishing, which has increased in importance, is dominated by seafood.
The mining industry is concentrated in the largest mine, El Mochito, in the province of Santa Bárbara in western Honduras. The most important minerals extracted are silver, zinc and lead. Minor amounts of iron and gold are also extracted.
Honduras energy supply is based on oil imports, which is an important economic factor. The price trend for oil has led to, among other things, increased gasoline prices, rationing and sometimes even driving bans. Other sources of electricity generation are heat and hydropower plants. A hydroelectric power plant in El Cajón with 290 MW of power has been in operation since 1985. In the countryside, firewood is the most important energy source.
Honduras traditionally has the smallest industrial sector in Central America, but during the 1990s, an area of compound factories grew, called maquiladoras. These mainly produce simpler clothing items that are exported to the United States primarily. In the context of the international financial crisis in the late 00s, these factories were hit hard and many had to close. It is estimated that about 40,000 jobs disappeared in connection with these closures.
In the 2010s, there was a certain recovery, a trend favored by increased interest from investors after the Central American states in 2012 agreed to enter into a free trade agreement with the EU.
The industry employs about 20 percent of the workforce. The city of San Pedro Sula is Honduras industrial center. The country’s traditional industry mainly produces cement, sugar, beer, soft drinks and cigarettes. Mining is important for mining, construction, forestry and tourism. More than half of the traditional industrial companies are small family owned units with less than ten employees. Often, the larger companies have foreign owners. The large banana companies are also active in the manufacturing sector and make soap, plastic, cement, margarine, cooking oil etc.
Traditionally, Honduras exports consist of raw materials. However, the growth of compound factories, so-called maquilas, during the 1990s changed the country’s export pattern, and during most of the 1990s the textile industry dominated the export. However, in the wake of the international financial crisis at the end of the 1990s, the country’s textile exports have declined. The main export products next to clothing are coffee, seafood, bananas, meat and wood products. Import products are mainly machinery and transport, chemical products and oil. To offset a negative balance of payments, loans are taken abroad, which has created a large foreign debt. The most important trading partner is by far the United States. Others of significance besides the Central American neighboring countries are Germany and Belgium. Honduras is heavily dependent on foreign aid; here, too, the United States is responsible for the majority.
Tourism and gastronomy
Honduras tourism gained a boost during the 1990s when the tourism industry received tax relief. The upturn continued until the coup in 2009; In 2008, the country had 1.5 million visitors. In 2012, the country was visited by 895,000 visitors.
The memorials to past Native American cultures are among the country’s top tourist attractions. The most important goal is the ruins of the ancient Mayan city of Copán on the border with Guatemala. Furthermore, there are a number of interesting colonial cities, such as Comayagua, which was the country’s capital until 1880.
The swimming tourists mainly go to the bays of the Caribbean or to the islands off the coast (Bahia Islands), which are surrounded by coral reefs and which offer good opportunities for diving. The adventure tourist is also looking for the Masquiti region in northeast Honduras, an almost uninhabited wilderness area with large unspoilt rainforests and rich plant and animal life.
The Mayan Indians, Spain and Mexico have characterized Honduran cuisine, which is very similar to that of the other Central American countries. The corn is the most important staple in the country and the main contribution of Indian culture to the food industry; another is the use of the other tree’s fruits to color the food yellow. With the Spaniards came the pork, rice and mill to fry the food. The location by the sea means that fish and seafood are important sources of protein, which complements the many dishes with corn and beans. Tortillas (corn pancakes) are served in a variety of variations, stuffed called the enchiladas, empanadas or tacos. Tapado de carne saladois a stew of salted beef that is popular in the hinterland. In general, chickens are more common than pork and beef. Chili peppers dominate spice to a great extent.