IMF Executive Board Completes Fourth and Fifth Reviews Under the Extended Fund Facility and Extended Credit Facility Arrangements for Honduras
FOR IMMEDIATE RELEASE
- The Executive Board of the International Monetary Fund (IMF) completed the Fourth and Fifth Reviews under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements for Honduras, enabling a disbursement of about US$242 million (SDR 178.4 million).
- The Honduran economy has remained resilient, and program performance for the fourth and fifth reviews has been favorable. With a healthy accumulation of international reserves alongside prudent fiscal policies, and an appropriate monetary and exchange rate policy mix, the economy is well placed to navigate the challenging external environment, while progress in structural reforms has strengthened in recent months.
- The continuation of well-calibrated macroeconomic policies, anchored by a contained fiscal deficit, continued efforts to strengthen the monetary and exchange rate frameworks, and decisive progress on governance and energy sector reform will be essential to preserve macroeconomic stability and support inclusive growth.
Washington, DC – June 29, 2026: The Executive Board of the International Monetary Fund (IMF) today completed the fourth and fifth reviews under the Extended Fund Facility and Extended Credit Facility arrangements for Honduras. The completion of the reviews enables the authorities to draw about US$242 million (SDR 178.4 million), bringing the total disbursements under the programs so far to about US$725 million (SDR 535.3 million).[1] Honduras’ 36-month arrangements totaling about US$847 million (SDR 624.5 million) were approved on September 21, 2023.
Program performance for the fourth and fifth reviews has been favorable. In completing the reviews, the Executive Board assessed quantitative performance targets for end-June 2025 and end-December 2025. While all quantitative performance targets for end-June 2025 had been met, the end-December 2025 performance criterion on the stock of domestic arrears at the public electricity utility ENEE was not met. The Board approved the authorities’ request for a waiver of non-observance of the end-December 2025 performance criterion on the basis of corrective actions. 11 of 17 structural benchmarks due for these reviews were met or implemented with delay, with particularly strong progress made in recent months.
The Honduran economy has remained resilient, growing 3.8 percent in 2025, supported by record-high coffee prices and surging remittances. Economic growth is projected to slow to 3.3 percent in 2026 as higher global oil prices weigh on economic activity. Following a convergence of inflation to the 4 percent objective in 2025, headline inflation is projected to increase to 5.7 percent at end-2026, driven by higher energy prices. Fiscal performance continues to be strong, with a fiscal deficit of 0.7 percent of GDP in 2025 outperforming the program target of a deficit of 1.5 percent of GDP, with a deficit of 1.0 percent of GDP targeted in 2026. International reserve coverage has strengthened considerably since 2024, and performance of the foreign exchange auction system has improved, supported by favorable foreign exchange inflows in the context of elevated remittance flows and high coffee prices, along with earlier monetary policy tightening and the resumption of exchange rate crawl.
At the conclusion of the Executive Board’s discussion, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, made the following statement:
“The Honduran economy has been resilient, despite elevated external uncertainty. The continued implementation of prudent fiscal policies, an appropriate monetary and exchange policy mix, and the recent acceleration of structural reform implementation demonstrate the authorities’ strong commitment to the Fund-supported program. The authorities are focused on strengthening macroeconomic stability and fostering inclusive, sustainable growth. Elevated and evolving external risks related to global energy prices and climate-related events call for continued policy agility, contingency planning and engagement with the Fund and development partners.
“The authorities remain committed to fiscal discipline, including through their efforts to prioritize current expenditures, mobilize revenue, and improve the targeting of energy subsidies. Efforts to reorganize and enhance the execution of social spending remain critical to protect vulnerable households and strengthen the social safety net. Further progress in enhancing fiscal governance and public financial management frameworks, including through the liquidation of existing trust funds, remains essential to underpin sound fiscal policies and maintain debt sustainability.
“In the context of external uncertainty, standing ready to adjust monetary and exchange rate policies as needed to contain broader inflationary pressures and safeguard external stability is important. The authorities’ ongoing efforts to improve mechanisms to allocate foreign exchange will be supported by the continued implementation of appropriate and consistent monetary and exchange rate policies, alongside efforts to strengthen the institutional framework of the central bank. Strengthening financial sector supervision is also important.
“Reinvigorating reform momentum in the energy sector is critical to limit fiscal risks and support medium-term economic growth. Renewed efforts are needed to reduce electricity losses and address arrears to strengthen the state-owned electricity company’s financial position. Further improvements to governance and operational efficiency are also essential to improve the sector’s sustainability and support much-needed investment in the electricity sector.
“A steadfast commitment to strengthen governance and combat corruption will be essential to foster private investment and inclusive growth. The approval and implementation of key reforms to the AML/CFT framework remain vital in this regard. Furthermore, the implementation of the governance and anti-corruption agenda will be critical to improve investor confidence and support a favorable environment for job creation. Measures to enhance climate resilience are also important.”
[1] U.S. dollar amounts have been calculated using today’s exchange rate: (SDR 0.737347/US$).
English: https://www.imf.org/en/news/articles/2026/06/29/26228-honduras-imf-executive-board-completes-fourth-and-fifth-reviews-eff-ecf-arrangements
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