Economic Scenario of Honduras:
Located in the continent of Central America, Honduras is bordered to the west by Guatemala, to the southwest by El Salvador, to the southeast by Nicaragua, to the south by the Pacific Ocean at the Gulf of Fonseca, and to the north by the Gulf of Honduras, a large inlet of the Caribbean Sea.
The economy grew by 4.8% in 2017 (versus 3.8% in 2016) with its expansion being driven mainly by a greater inflow of remittances and higher exports. The contributions of private consumption and investment to that performance amounted to 3.5 and 1.4 percentage points, respectively. The growth of private consumption was, in large part, buoyed by a significant upswing in remittances (11.9%) during the year. At 2.7% of GDP, the central government’s deficit was in line with the provisions of the Fiscal Responsibility Act. The current account closed with a deficit of 1.7% of GDP, which was a full percentage point lower than the figure for 2016, thanks to stronger remittances and an increase in the value of exports.
Turning to the first quarter of this year, the economic activity eased in January on the back of softer output in the agricultural, manufacturing, and mining and quarrying sectors. The country is expected to grow at a steady pace close to3.7% in 2019, which is unchanged from last month’s forecast, and 3.5% in 2020.
India-Honduras economic relation:
Both the countries forge closer relations that could open the way for strategic alliances needed to boost development and open new markets for exports.
Bilateral trade between Honduras and India totalled US$159.5 million in 2017-18, growing by 1.5% from the previous fiscal. India exported $146.2 million worth of goods to Honduras, and imported $13.32 million. In the engineering front, bilateral trade between India and Honduras totalled US$ 59.85 million growing by 27.2% from the previous fiscal. India’s export of engineering goods to Honduras stood at $ 50.99 million and imports stood at $ 8.86 million. Both the bilateral trade and engineering trade were in favour of India. The main engineering commodities exported by India to Honduras are vehicles and parts, boilers and machinery, electrical machinery and equipment and iron and steel. The major commodities imported by India from Honduras are iron, steel, and aluminium articles.
Opportunities for Indian Exporters at Honduras:
While India enjoys a positive trade balance with Honduras in both industrial machinery, boilers and electrical machinery and equipment, India’s share in Honduras’s import basket is dismal in both cases. In case of industrial machinery and boilers it is only 0.8% and in case of electrical machinery and equipment it is 0.3% only. It can be said that both sectors have potential to penetrate the Honduras market.