Honduras Economic Structure
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High levels of poverty, unemployment, fiscal deficit, unequal distribution of income and a strong trade relationship with the US are the main features of Honduras economic structure. A mismatch between the number of people employed in the country’s agriculture sector and their contribution to the economic growth, which is lower, is another striking feature of Honduras’ economy.[br] The contributions, however, of the industrial and service segments to the country’s GDP are quite good. Honduras economy relies on exports of commodities such as coffee and banana, and thus is quite vulnerable to change in their prices. Apparel exports and remittances from abroad contribute nearly 50% to the country’s GDP. After registering a steady positive economic growth for several years, Honduras’ GDP and industrial production growth rates have turned negative in 2009.
Honduras Economic Structure: Major Sectors
Honduras’ real GDP growth rate declined from 6.3% in 2007 to 4% in 2008 and to -3.1% in 2009 due to the general economic downtrend around the globe. Although the country’s economy is expected to register marginally positive economic growth in 2010, the same is likely to be insufficient to improve the living standards of the poor.
Nearly 58% of Honduras’ GDP is generated by the country’s service sector. The sector which employs nearly 40% of the country’s population comprises telecommunications, tourism, banking and utilities.
Honduras’ agriculture sector employs nearly 40% of its population while contributing only 14% to its GDP. The country’s major banana plantations are owned by two US corporations and contribute largely to exports. Coffee, citrus, corn, African palm, timber, beef, shrimp, tilapia and lobster are Honduras’ main agricultural products. Although the country has vast forest, marine and mineral resources, its widespread slash-and-burn agricultural methods and illegal logging has restricted the growth of logging, mining and lumber industries.[br]
Other major industries of Honduras include sugar, coffee, textiles, clothing, wood products and cigars. The country’s industrial segment employs nearly 20% of its population while contributing 28% to its GDP. Most manufacturing plants are located in the urban areas and the production of capital and heavy intermediate goods is minimal. The country’s industrial production growth declined by 9.5% in 2009.
