Honduras Readies Spending Cuts as IMF Mission Prepares to Visit

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(Bloomberg) — Honduras plans to slash this year’s budget and halt central bank transfers to the government, as International Monetary Fund officials prepare to visit this month. 

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Central bank president Roberto Lagos said that the new administration led by President Nasry Asfura will seek to trim about $570 million from the 2026 budget. The final figures for this year haven’t yet been finalized, though in 2025 the government spent about $17 billion. 

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The IMF mission will visit the Central American nation starting Feb. 15 to review the their lending program. 

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“We want to be fiscally responsible and send clear signals to the market that Honduras is a country that wants to attract investment and has favorable macroeconomic conditions,” Lagos said Sunday, in a phone interview. “The central bank can’t be financing the executive branch. We need to see how we capitalize those resources, those central bank earnings, in accordance with our commitments.”

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The previous administration started transferring central bank profits to the government to finance the annual budget, which violates the country’s agreement with the IMF, Lagos said. He said he will instead use those profits to strengthen the bank’s balance sheet. Lagos said Honduras is committed to completing the program. 

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Lagos took over at the central bank in January, returning to Honduras from the US where he worked as a consultant for the World Bank. He said Honduras plans to return to the World Bank’s International Centre for Settlement of Investment Disputes after former president Xiomara Castro withdrew from the arbitration court. 

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The central bank is still calculating its economic forecast for the year and will refine its projections with the IMF, he said. The coffee industry in Honduras has seen significant growth, and recent announcements from multinationals such as Cargill and Martori Farms will further boost agriculture exports, he said. The bank revised its methodology for calculating inflation, and it will take effect for January’s consumer price reading, he said. 

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President Asfura met with President Donald Trump on Saturday, who endorsed him in November’s election. Honduras will invite US treasury officials back to the country’s committee on banking and insurance and the finance ministry to advise on budget transparency and anti-money laundering rules, Lagos said.  

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The government plans to open up bidding for energy investments, targeting US firms in the tender process, he said. Honduras will also begin talks to reach a reciprocal trade agreement with the US to lower tariffs, similar to the deals inked with Guatemala, El Salvador and Argentina over the last two weeks. Honduran trade specialist Melvin Redondo, who returned to Honduras from China, will lead talks, he said. 

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“Trade with the US is a priority,” he said. “It will allow us to be competitive and have agreements that put us on a level playing field with regional peers.” 

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