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LatinNews Daily - 9 December 2024

In brief: IMF releases new funds for Honduras

*The executive board of the International Monetary Fund (IMF) has completed the first and second reviews of the arrangements under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) for Honduras, enabling a disbursement of about US$198m. This brings total disbursements under the programme so far to about US$315m, according to an IMF statement. The same statement notes that that Honduras’ 36-month arrangements totalling about US$823m were approved on 21 September 2023. The Fund also hails the resilience of the Honduran economy which grew 3.6% in 2023, and which it projects to expand by close to 4% in 2024, despite “the negative impact of this year’s El Niño-related drought on agricultural exports and energy production and a recent tropical storm”. The IMF statement also points out that inflation, which was running at 3.94% in annual terms in November, has also continued to decline close to the 4% objective and hails the country’s “strong” fiscal performance, noting that the fiscal deficit outperformed the programme target in 2023 at 1.3% of GDP and is projected to outperform again in 2024 at around 1.5% of GDP. The Fund does flag up a continuing decline in international reserves however, saying that while remaining “adequate”, these have dropped in 2024 “in the context of the drought-related shock and lower-than-expected external financing support”.

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