The World Bank In Honduras

Honduras is Central America’s second-largest country by area and population, home to approximately 10.8 million people. Its economy is relatively small and open, with agriculture and light manufacturing, especially textiles, serving as important sources of employment and exports. 

The country’s development is shaped by several challenges, including institutional capacity constraints and limited economic diversification, which can influence investment and foster migration. Honduras is also susceptible to external shocks and natural disasters, as demonstrated during the COVID-19 pandemic and recent extreme weather events, which led to economic contraction and setback in poverty reductions efforts. Despite these challenges, Honduras has maintained prudent macroeconomic management. However, job creation and productivity growth have been modest, and gender and geographic disparities remain. 

To expand opportunities for the Honduran population, especially the most vulnerable, it is essential to drive stronger economic growth, boost productivity and competitiveness, and foster inclusion by improving access to quality basic services and jobs. Simultaneously, advancing institutional reforms in critical areas such as energy and water sustainability, governance, and the business climate is vital to ensure long-term resilience and equitable development.

Last Updated: Oct 07, 2025

In recent years, the Honduran economy has grown moderately, with real GDP increasing by 3.6% in 2024, similar to the growth registered in 2023. This growth has been driven by robust remittances, lower inflation, and greater access to credit, which boosted household consumption and private investment, offsetting weak international demand and adverse climatic events, including Tropical Storm Sara.   

GDP growth is expected to slightly decelerate to 3.5 percent in 2025 and 2026, despite rising net exports, dampened by weaker public and private investment. Structural challenges include weak productive capacity, high vulnerability to natural hazards coupled with a low coping capacity, and widespread crime and violence, which fuel outmigration. The economy is critically reliant on remittances, which represent over one fourth of the Honduran GDP. 

Inflation is expected to slightly decelerate to 4.5 percent in 2025, after reaching 4.6 percent in 2024, supported by lower food and fuel prices and tighter monetary policy. 

Honduras has made progress in reducing poverty, although it remains among the poorest and most unequal countries in Latin America and the Caribbean. Under the US$8.3 per capita per day (2021 PPP) threshold, poverty is estimated at 49.8 percent of the population (3.6 percentage points lower than 2023), and it is forecasted to decline to 46.1 percent in 2025 and 44.5 percent in 2026. Poverty under the US$3.0 threshold remains high by regional standards, at 15.7 percent in 2024. 

Human development outcomes in the country are among the lowest in the region. According to the World Bank's Human Capital Index, a child born in Honduras will be almost half (48%) as productive when they grow up as they could be if they received a complete education and enjoyed full health.

Last Updated: Oct 07, 2025

The World Bank supports Honduras in reducing poverty through loans, grants, technical assistance, and knowledge sharing. Its strategy aims to build a green, inclusive, and resilient economy by improving human development, promoting job creation, and strengthening resilience to natural hazards. 

The Bank’s current portfolio includes 15 projects totaling US$1.18 billion (including grants). Support comes from global programs such as the Global Agricultural and Food Security Program (GAFSP), Global Financing Facility (GFF), Global Alliance for Vaccines and Immunization (Gavi), Global Partnership for Education (GPE), and Japan Social Development Fund (JSDF). These efforts focus on rural competitiveness, water, social protection, education, health, food security, digital development, transport, and disaster risk management. 

Since the COVID-19 pandemic, the institution has supported Honduras through emergency response, health system strengthening, medical equipment procurement, and disaster and climate risk management. Following several extreme weather events, it aided 300,000 people by rebuilding schools, water systems, health centers, and bridges, while emergency efforts in 18 municipalities improved conditions for 1.3 million people. In rural development, the COMRURAL project boosted productivity and market access for over 7,200 small producers, benefiting 14,000 families, including women and Indigenous Peoples. 

To deepen this engagement, in 2025 the World Bank Group (WBG) established a new Joint Representation in Honduras. This structure brings together three institutions—the World Bank (IBRD/IDA), which works with the public sector; the International Finance Corporation (IFC), which supports private sector development; and the Multilateral Investment Guarantee Agency (MIGA), which provides guarantees to facilitate investment—offering Honduras a single entry point to access the full range of WBG services: financing, advisory, and guarantees.

Last Updated: Oct 07, 2025