Labor market outlook in Honduras amid low FDI in 2025

The economic forecast for Honduras in 2025 encounters major obstacles, marked by a notable rise in unemployment and a substantial decrease in foreign direct investment (FDI). These circumstances denote a scenario of political and economic unpredictability that influences both the job market and investor trust, affecting the nation’s growth and stability.

The increase in the unemployment rate and the decline in FDI highlight structural problems that require immediate attention. The situation calls for the implementation of policies that promote formal job creation and improve the investment environment in order to foster sustainable economic growth and reduce the vulnerability of sectors such as young people and women.

Increasing joblessness and labor conditions in Honduras

According to the Honduran Council of Private Enterprise (COHEP), the unemployment rate reached 7.2% by the end of 2024, showing an increase that intensifies the labor crisis. This phenomenon mainly affects women and young people, who face greater difficulties in accessing formal and stable jobs. Underemployment also affects more than 1.6 million people, indicating that a significant portion of the population works in conditions that do not meet their economic needs.

Furthermore, close to one million youths encounter obstacles when trying to enter the official job market, restricting their chances for career growth. Employment without formal contracts remains a continuous issue, with 37% of those in informal jobs being between 15 and 29 years old, highlighting employment instability and the absence of social benefits.

These conditions not only affect workers’ quality of life, but also limit economic growth and the country’s ability to attract investment. Job insecurity and market uncertainty can hinder economic recovery and poverty reduction.

Drop in overseas investments and economic forecast

Throughout 2024, the flow of foreign direct investment into Honduras decreased. By September of that year, it amounted to $590.7 million, marking a drop of $172.5 million compared to the same months in the preceding year. This reduction indicates an atmosphere of uncertainty for investors, which impacts the influx of capital crucial for economic growth.

The Milken Institute’s 2025 Global Opportunity Index (GOI) ranks Honduras last in Latin America in terms of investment attraction, underscoring the need to improve aspects such as legal certainty, infrastructure, and political stability. The reduction in FDI limits the financing of productive projects and infrastructure essential for growth.

Thus, rising unemployment and falling foreign direct investment in Honduras during 2024 and 2025 reflect a context of uncertainty that affects economic and social stability. The adoption of comprehensive and coordinated policies will be crucial to improving the country’s economic and employment prospects.

To change this scenario, it is deemed crucial to enact measures that boost investor trust, enhance infrastructure, and ensure security. Cooperation among the government, businesses, and the community is vital to tackle present economic and employment issues and encourage more robust and fair growth.