Economic Overview & Business Opportunities – Honduras
The Republic of Honduras is a naturally beautiful Central American country whose borders include Guatemala, Nicaragua, and the Pacific Ocean. Gaining independence in 1821, Honduras still has a strong Spanish influence in its culture, language, etc. It has a population of more than 10 million, and the country’s economy relies primarily on agriculture. Business opportunities in Honduras abound thanks to its rich natural resources, including minerals, coffee, and a robust textiles industry.
Honduras continues to show positive and sustainable economic growth in the Latin America and Caribbean (LAC) region. It is sustainably overcoming critical infrastructure and economic development constraints by implementing proactive policies. According to the International Monetary Fund (IMF), the country’s rebound growth is well on the upward curve. An expansion of 12.5% in real gross domestic product (GDP) for 2021 is indicative of a further 3.8% growth in 2022.
The Economy of Honduras
Honduras is a low-middle-income country, and the World Bank’s recent report shows a GDP of USD28.49 billion in 2021. Currently, its growth rate is the second highest for any Central American country. Forecast development rates and other figures for 2022 include the following:
- Honduran economy by 3.5%
- GDP up to USD29.6 billion
- Exports and imports by 7.4% and 10%, respectively
- Inflation will stand at 6.19%
- Foreign direct investment (FDI) by USD331 million in the first quarter
- Remittance from the US at 14%
Key drivers in the economy centre around the manufacturing of local goods, the construction industry, tourism, and the textile industry. The new Government is opening up business opportunities in Honduras with sustainable and policy-driven strategies. These include attracting more FDIs, better access to open markets, improving the standard of living, and increasing employment opportunities.
The country’s foresight in implementing pragmatic macroeconomic strategies and its proximity to the US is driving intra-industry trade. Its strong regulatory framework, which includes the Fiscal Responsibility Law, continues to lay the foundation for firm economic stability. Honduras also has a robust export market boosted by the US Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). These factors work together to encourage nearshoring as a strategy to cater to the vast US market.
Why Invest in Honduras
To promote business opportunities in Honduras, the Government continues to intensely focus on local and foreign investment. The country enjoys several vital points that make it an ideal destination for investors, such as:
- A strategic location with preferential access to US markets
- Natural resources and tourism hotspots
- A new Government focusing on economic growth & reconstruction
- Policies supportive of small and medium enterprises (SMEs)
- Diverse, skilled, and young talents
- A robust and growing industrial base
- Diversification of exports
- Busy deep-water ports
- Results-Based-Governance system and stronger policies
Investors will find that trade incentives are business-friendly, with good access to a competitive and skilled labour market. The strong manufacturing industry and a growing industrial base see to it that doing business in Honduras remains profitable.
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