Honduran economy: Crisis situation.

Ever since the ouster of its President Manuel Zeyala, Honduras is drifting into a crisis situation. All economic activities have taken a hit, and are affecting the well-being of the citizens of this country.

Tourism, one of the major industries, and the major foreign exchange earner, mainly on account of the ancient Mayan ruins, is said to be down by about 40%. The overall economic growth is expected to contract by over 2.5%. Unemployment is up at 3.5%. Inflation is running at a high 11.4%. Public debt is up at 22% of the GDP. The country’s exports have taken a hit, and international development and aid agencies have stopped extending their services.

One of the original Banana Republics, so called for their dependence on the banana crop for their economic prosperity, Honduras is experiencing a downslide triggered by the economic downslide in the United States, on account of its over-dependence on the U.S.

Apart from bananas, the other agricultural produce of the country includes coffee, citrus fruits, corn, etc. Timber is also produced in large quantities. Among the major industries sugar, coffee, textiles, clothing, wood products, etc. The country exports coffee, gold, bananas, plam oil, timber, etc, and imports raw materials for industries, foodstuffs, chemicals, fuels, etc.

The industrial growth for 2009 was projected at 4.4% and the GDP growth at 4%. However, this was before the coup in June 2009. The next election is slated for 29th November, by which time the eocnomy is likely to have deteriorated further. In this bleak national landscape, the only reason to cheer was Honduras’ qualification for the Soccer World Cup.

Unemployment is a major problem, as one sector after other buckles under the pressure of economic adversities. An end to the political uncertainty and restoration of the economic activities is going to take some time. All concerned are anxiously waiting for the November election to bring about a welcome change in the country.