Honduras is a Central American country bordered by Nicaragua, Guatemala, and El Salvador. It has a population of around 9 million people and a GDP per capita of US$2,400 as of 2019. The economy of Honduras is largely based on agriculture, which accounts for about 21% of GDP and employs nearly two-thirds of the population. The main crops are coffee, bananas, sugarcane, corn, and beans. Other important industries include food processing and light manufacturing.
The service sector is the largest contributor to GDP at 52%, followed by industry at 32% and agriculture at 16%. Honduras’s main exports are apparel and other textiles, coffee, bananas, seafood products such as shrimp and lobster, gold jewelry, cigars and cigarettes. Its main trading partners are the United States (USA), Mexico, El Salvador and Guatemala.
According to cheeroutdoor, the Honduran government has taken steps to stimulate economic growth through initiatives such as tax reforms; improvement in infrastructure; encouraging foreign investment; promoting tourism; improving access to credit for small businesses; increasing agricultural productivity; and providing technical assistance to farmers. Furthermore it has sought foreign aid from international organizations such as the World Bank to help develop its economy over time. In recent years, there have been several positive developments in the Honduran economy due to these efforts including increased foreign investment in infrastructure projects which has helped create jobs in Honduras.
According to COUNTRYAAH, Honduras is a poor agricultural country, which is financially dependent on the export of coffee, bananas, shrimp and timber. A free trade zone for light industry was created in the 1980s. Up to the 1990s, the economy was characterized by great government interference. After external pressure, i.e. from the International Monetary Fund (IMF), the policy has been changed. An extensive privatization process has contributed to, among other things, a significant reduction in foreign debt. At the same time, falling prices on the world market for the country’s traditional products have had a negative impact. Establishment of US military bases in the country has had its economic ramifications. In 1991, for example, the United States left nearly 75% of its debt in Honduras. The austerity measures adopted by Honduras in consultation with the World Bank and the IMF, has had a dramatic effect on the poor across the poor population. Unemployment is officially 28%, but in fact above 40%. The business world was sharply restored in connection with Hurricane Mitch in 1998.
The tourism industry on the north coast has gradually become well developed and attracts foreign tourists.
Agriculture is the main trade route. About 18% of the land is cultivated or arable land, while meadow and pasture cover approx. 30%. Agriculture accounts for almost half of the employment and approx. 1/4of the gross domestic product. Bananas, which are grown on US-owned plantations in the northern part of the country, have traditionally been the most important export growth and stood in the early 1990s for approx. 30% of the country’s export revenue. However, production has slowed down and coffee has taken over as the most important export product from agriculture. High quality coffee is grown in the highlands, partly here also on plantations, but mostly on small farms. Furthermore, sugar cane and coconuts (in the Bahia Islands in the Caribbean) for export. For the domestic market, especially corn, rice, beans, millet, yucca and flour bananas, as well as some cotton and tobacco are grown. Cattle and pigs are especially kept from livestock.
Forest covers approx. 1/3 of the area, and the timber is an important export. A large paper and pulp mill and several sawmills have been set up in Olancho province east of the country.
The mining operation contributed 2% of GDP in 2001 and employed 0.2% of the working population. Lead, zinc and silver are the main export goods; gold, copper and iron are also extracted. Small quantities of petroleum are extracted offshore, but the country relies on importing petroleum, ia. for the production of electrical energy. Four hydroelectric power plants with a total production capacity of 431 MW supply electricity to the north coast and the central part of the country. In 2016, the production of electric energy 8.8 TWh, of which thermal power based on fossil energy amounted to almost 50 percent. Hydropower was the most important renewable energy source with a share of 27 percent.
The industry is mainly based on the processing and processing of the country’s agricultural products. In 2002, the industry contributed almost 30% of GDP and employed 20% of the working population. San Pedro Sula is the most important industrial center. Major industries (by value) are the food industry, petroleum refining, beverage production, wood processing and the manufacture of chemical products.
Abbreviated as HND by abbreviationfinder.org, Honduras is struggling with a large deficit in its foreign trade. The main export goods are coffee, bananas and shellfish. Otherwise, timber, meat, sugar, lead and zinc are exported. Imports include finished goods, chemicals, fuels, machinery, transport equipment and food products. The United States is Honduras’ most important trading partner, with 54% of its exports (2000) and 42% of imports. Honduras also has significant trade with Guatemala, Germany, Japan, El Salvador and the United Kingdom.
Transport and Communications
Honduras’ transport network is relatively well developed. The railways do not constitute a network that can be used for anything other than the needs of the railway companies. The road network was considerably improved in the 1980s, including with the help of the US Engineering Corps. The Pan-American Highway connects Honduras with neighboring countries. Domestic air traffic plays a relatively important role. International airports can be found at Tegucigalpa, San Pedro Sula, Roatán and La Ceiba. The largest port cities are Puerto Cortés, Tela and La Ceiba on the Caribbean, and Amapala on the Pacific coast.
Note: the capital city of Honduras is Tegucigalpa with a population of 1,173,000 (2012 estimate). Other major cities include San Pedro Sula with a population of 743,000, El Progreso with a population of 217,000, La Ceiba with a population of 196,000 (2012 estimate).