Country Risk Rating

C
A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behavior. Corporate default probability is high. - Source: Coface
A1A2A3A4BCDEVery Low RiskAcceptable RiskVery High Risk

Business Climate Rating

C
The business environment is difficult. Corporate financial information is often unavailable and when available often unreliable. Debt collection is unpredictable. The institutional framework has many troublesome weaknesses. Intercompany transactions run major risks in the difficult environments rated C.
A1A2A3A4BCDEVery Low RiskAcceptable RiskVery High Risk

Strengths

  • Privileged relations with the US (preferential trade agreement under DR-CAFTA, military presence)
  • Agricultural resources
  • Support from multilateral donors, in particular the IMF, to support the current government's economic reforms

Weaknesses

  • Political instability and polarisation maintaining the opposition between the executive and the legislature
  • Dependence on the US economy (exports, FDI and expatriate remittances)
  • Dependence on fuel and cereal imports
  • High emigration exacerbated by insecurity
  • High level of informality in the economy (80% of employment by 2023) and widespread poverty (50%)
  • Fiscal resources durably too low (21% of GDP in 2022)
  • High unemployment rate (8.1% in 2023)
  • Vulnerable to climatic events such as hurricanes, droughts and tropical storms
  • Lack of infrastructure (particularly electricity) and public services

Current Trends

Source:

Coface (10/2024)
Honduras