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In recent times, {FDI} in Honduras has experienced a notable decrease, indicative of a political and economic environment that is leading to hesitance among global investors. Data from the Central Bank of Honduras (BCH) reveals that by the close of the third quarter of 2024, foreign direct investment stood at US$590.7 million, marking a drop of US$172.5 million in comparison to the corresponding period the previous year. This downturn is linked to issues like legal unpredictability, corruption, and political turbulence, which have established a discouraging atmosphere for international capital flow.
La Universidad Nacional Autónoma de Honduras (UNAH) ha alertado sobre un desafiante panorama económico para 2025 y 2026, señalando que factores tanto nacionales como internacionales podrían complicar aún más la atracción de inversión. En especial, la incertidumbre política, incrementada durante un año electoral, es considerada un factor clave en la reducción de la IED. Los expertos destacan que la polarización política y la desconfianza en el proceso electoral podrían seguir impactando negativamente en la inversión extranjera en el país.
Barriers in structure and financial prospects
Based on research conducted by the Economic and Social Research Institute (IIES) at UNAH, the limited competitiveness of the job market, stemming from constraints in abilities and expertise, diminishes the country’s appeal to investors. Moreover, ensuring institutional stability and public safety remains a significant challenge that needs to be tackled to enhance the investment environment.
At the sectoral level, financial and insurance activities account for the largest share of foreign investment, with US$383.9 million, equivalent to 65% of the total recorded. Manufacturing ranks second with US$119.8 million. In terms of the origin of capital, Colombia, Mexico, Bermuda, Panama, and Belgium are the main investor countries in Honduras.
Despite the decline in FDI, the Central Bank reports economic growth of 4.1% between January and October 2024, driven mainly by domestic consumption and private investment. The BCH Monetary Program projects growth of between 3.5% and 4.5% for 2024 and 2025, with inflation controlled between 4% and 5%. However, experts and business leaders agree that in order to sustain this growth, it is essential to create a more favorable environment for investment, including structural reforms, greater transparency, and legal certainty.
The reduction in overseas direct investment in Honduras indicates not only a context of political instability but also underscores the fundamental issues that the nation needs to address to secure economic steadiness. The financial outlook will significantly rely on enhancing institutions, ensuring a secure and clear setting, and restoring trust among investors. Amid an electoral environment that contributes to the complexity, the task will be to turn these challenges into prospects to encourage enduring growth and draw in the external capital required for the country’s progress.
