Front Matter Page
© 2008 International Monetary Fund
July 2008
IMF Country Report No. 08/241
Honduras: Request for Stand-By Arrangement—Staff Report; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Honduras
In the context of the request for Stand-By Arrangement, the following documents have been released and are included in this package:
The staff report for the Request for Stand-By Arrangement prepared by a staff team of the IMF, following discussions that ended on February 29, 2008, with the officials of Honduras on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on March 25, 2008. The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF.
A staff statement of April 7, 2008 updating information on recent developments.
A Press Release summarizing the views of the Executive Board as expressed during its April 7, 2008 discussion of the staff report that approved the Stand-By Arrangement.
A statement by the Executive Director for Honduras.
The documents listed below have been separately released.
Letter of Intent sent to the IMF by the authorities of Honduras*
Memorandum of Economic and Financial Policies by the authorities of Honduras*
Technical Memorandum of Understanding*
*Also included in Staff Report
The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information.
Copies of this report are available to the public from
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Price: $18.00 a copy
International Monetary Fund
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Front Matter Page
INTERNATIONAL MONETARY FUND
HONDURAS
Request for Stand-By Arrangement
Prepared by the Western Hemisphere Department (in consultation with other departments)
Approved by David J. Robinson and Adnan Mazarei
March 25, 2008
Discussions. Discussions were held in Washington during January 24 to February 8 and February 19-29, 2008. The staff team comprised Messrs. A. López-Mejía (Head), G. Bannister, G. Callegari (all WHD); F. Bornhorst (FAD); P. Dudine (PDR); and M. Garza (Resident Representative). Mr. D.J. Robinson (WHD) participated in some of the discussions. Messrs. J.A. Rojas and A. Umaña (OED) also joined some discussions. On February 7, Management (Mr. Portugal) met with President Zelaya and the economic team.
Fund relations. Honduras has had three previous PRGF arrangements, the last of which expired in February 2007, with the fourth review (scheduled for April 2006) not completed due to the lack of agreement on key fiscal policies. The 2006 Article IV discussion was held in February 2007. At end-January 2008, Honduras’ outstanding Fund credit was SDR 20.3 million (15.7 percent of quota), all from the PRGF. Honduras’ most recent Stand-By Arrangement expired in 1992.
New program. In the attached Letter of Intent and Memorandum of Economic and Financial Policies (MEFP), the authorities describe their economic program for 2008, for which they request support under a 12-month Stand-By Arrangement in an amount equivalent to SDR 38.85 million (30 percent of quota). The authorities intend to treat the program as precautionary.
Contents
Executive Summary
I. Introduction
II. The Emerging Economic Imbalances
III. The Stabilization Program: Addressing Economic Imbalances
A. Overview
B. Fiscal Consolidation and Reorientation
C. Containing Inflation and Safeguarding External Stability
D. Strengthening the Energy Sector
IV. Financing, Access and Program Modalities
V. Staff Appraisal
Figure
1. Macroeconomic Performance—Imbalances are Growing
Tables
1. Selected Economic Indicators
2. Operations of the Central Government
2a. Operations of the Central Government - Quarterly
3. Operations of the Combined Public Sector
3a. Operations of the Combined Public Sector – Quarterly
4. Summary Accounts of the Banking System
4a. Summary Accounts of the Banking System - Quarterly
5. Balance of Payments
6. Illustrative Medium-Term Scenario
7. Purchase Schedule and Terms under Proposed Stand-By Arrangement
8. Indicators of Fund Credit
9. External Vulnerability Indicators
10. Structure and Performance of the Banking Sector
Appendices
I. Attachment I. The Authorities’ Letter
Attachment II. Memorandum of Economic and Financial Policies
Attachment III. Technical Memorandum of Understanding
II. Assessing External and Public Sector Debt Sustainability
Appendix Tables
I.1. Performance Criteria and Indicative Targets
I.2. Prior Actons and Structural PCs
II.1. External Debt Sustainability Framework, Baseline Scenario, 2005–2028
II.2a. Sensitivity Analyses for Key Indicators of Public and Publicly Guaranteed External Debt, 2008–28
II.2b. Sensitivity Analyses for Key Indicators of Public and Publicly Guaranteed External Debt, 2008–28
II.3. Sensitivity Analysis for Key Indicators of Public Debt, 2008–2028
II.4. Public Sector Debt Sustainability Framework, Baseline Scenario, 2005–2028
Appendix Figures
II.1. Indicators of Public and Publicly Guaranteed External Debt Under Alternative Scenarios, 2007–2027
II.2. Indicators of Public Debt Under Alternative Scenarios, 2008–2028
III. Summary of Annexes
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INTERNATIONAL MONETARY FUND
HONDURAS
Request for Stand-By Arrangement
Informational Annex
Prepared by the Western Hemisphere Department (In collaboration with other departments)
Approved by David J. Robinson and Adnan Mazarei
March 24, 2008
Contents
Annexes
I. Relations with the Fund
II. Relations with the World Bank
III. Relations with the Inter-American Development Bank
IV. Statistical Issues
Front Matter Page
Press Release No. 08/76
FOR IMMEDIATE RELEASE
April 8, 2008
International Monetary Fund
Washington, DC. 20431 USA
Telephone 202-623-7100
Fax 202-623-7100
