Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 7/19/2017
Located in the geographic heart of Central America, Honduras has a democratic government and a free market economy. Exports to Honduras continue to perform well and as the 41st largest export market for U.S. companies in 2016 (0.33 percent of U.S. exports), Honduras’ population of 8.7 million is highly receptive to U.S. goods and services. Despite a complex domestic environment resulting from economic downturns and political reforms, the country is taking important steps towards improving its business investment climate, such as: adopting fiscal discipline and consolidation; infrastructure development through public private partnerships; combating corruption and security concerns; simplifying bureaucratic procedures; and focusing on improving overall competitiveness and productivity.

The United States is Honduras’ largest trade and economic partner, accounting for 61 percent of total imports. Exports to Honduras were $4.8 billion in 2016, slightly down by 8 percent from 2015 (sectors affected by commodity price decreases, such as mineral fuel, accounted for most of the decrease). The Central America – Dominican Republic Free Trade Agreement (CAFTA-DR), which entered into force in 2006, boosted U.S. export opportunities and diversified the composition of bilateral trade. Currently, U.S. exports to Honduras are up by 50 percent since 2005, the year before implementation of this Free Trade Agreement.  CAFTA-DR implemented important measures related to investment, customs administration and trade facilitation, technical barriers to trade, government procurement, intellectual property rights, transparency, labor and environmental protection. As a result of this FTA, more than 95 percent of U.S. consumer and industrial goods exports to the Central America region, meeting relevant rules of origin, are no longer subject to tariffs.

Honduras had a nominal GDP per capita of $2,551.5 in 2016. It is a low/middle income country, with over 60 percent of its population living in poverty. Honduras has enjoyed moderate economic growth since 2010 after a sharp decline in 2009 that had occurred due to the effects of the global economic downturn and Honduras’ domestic political crisis. GDP growth is picking up from 2.8 percent in 2013 to 3.6 percent in 2016, with a similar estimated growth rate for 2017. Boosting the country’s productivity levels is seen as crucial for maintaining economic growth. Honduras’ economic activity is highly influenced by economic performance in the United States particularly tied to exports and family remittances. The rate of inflation in 2016 was 3.26 percent, and is estimated to remain at a moderate level of up to 3.92 percent in 2017. The Honduran currency, the lempira, has floated in a band system since 2011. The Government of Honduras is targeting annual depreciation of 4.5 percent for 2017 and 2018, a measure which is supported by the banking sector. In 2015, the U.S. direct investment position in Honduras, which is mostly concentrated in the light manufacturing sector, was $1.2 billion, an increase of 58.6 percent from the previous year. More than 200 American companies currently operate in Honduras.

Top five reasons why U.S. companies should consider exporting to Honduras:

1) Free Trade Agreement (FTA) market;
2) Close proximity to the United States;
3) Among the most receptive markets for U.S. goods and services worldwide;
4) Modernized port infrastructure and logistical platform for the region;
5) Large market share and opportunities for U.S. firms.
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Honduras Trade Development and Promotion