As Honduras prepares for its November 30 election, economic conditions are emerging as a key influence on voter decisions, according to a new analysis by the Center for Economic and Policy Research (CEPR). The report evaluates social and economic developments since the departure of former President Juan Orlando Hernández, highlighting both recovery efforts and lingering challenges shaped by past political upheaval and natural disasters.
Jake Johnston, coauthor and CEPR’s International Research Director, noted that economic well-being and future expectations often play decisive roles in electoral outcomes—not just in Honduras but globally. After a period marked by pandemic-related contraction, two devastating hurricanes, and governance setbacks following the 2009 coup, recent years have seen measurable improvements under President Xiomara Castro’s administration.
The economy contracted by over 10 percent during the pandemic, pushing poverty rates above 70 percent. However, since 2020, poverty levels have returned to pre-pandemic figures. Inequality has continued to decline, unemployment has trended downward since 2021, and both public and private investment have reached record highs. The real average minimum wage has increased by 12 percent, contributing to improved household incomes. External debt remains low, supporting greater fiscal sustainability.
Remittances, a critical income source for many families, have remained stable, while social spending has regained momentum after earlier declines under National Party rule. The reversal of progress during the post-coup era—particularly in health, education, and poverty reduction—had previously eroded living standards. By 2019, a decade after the coup, poverty levels showed no improvement.
Johnston emphasized that modest but meaningful economic gains, coupled with renewed attention to social welfare, could sway voters in the upcoming election. These developments reflect a broader shift in policy priorities, potentially reinforcing public confidence in the current government’s direction.
— news from cepr.net
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What Is the Economic Context for the Honduran Election?
New Paper Examines Key Economic, Social Indicators Since the Previous Administration, and Before n nWashington, DC — Ahead of the November 30 elections in Honduras, a new paper from the Center for Economic and Policy Research (CEPR) examines the Honduran economy, and how its slow recovery from setbacks due to the COVID-19 pandemic, hurricanes, and reversals under post-coup governments may affect voter sentiment. n n“In Honduras, as in the US and many other countries, voters’ sense of economic security and hope for a brighter future could be the determining factor,” coauthor and CEPR International Research Director Jake Johnston said. “The past four years have seen some previous economic gains restored, despite adverse circumstances.” n nHonduras has made economic progress in the four years since former president Juan Orlando Hernández left office. The period following the 2009 coup d’etat saw a reversal of progress made under former President Manuel Zelaya on social outcomes, with inequality, poverty, unemployment, and social spending all initially worsening under subsequent National Party governance. In 2019, just before the pandemic hit, poverty remained unchanged from its level 10 years earlier at the time of the coup. Honduras then experienced an economic downturn during the COVID-19 pandemic, with the economy contracting by more than 10 percent and poverty rates increasing to over 70 percent. The Honduran economy was set back further by two hurricanes. n nSince President Xiomara Castro has been in office, “Poverty has come back down to pre-pandemic levels, inequality is continuing its downward trend, both public and private investment has reached new heights, and the country finds itself in a more sustainable economic position with low external debt,” the paper notes. n nThe issue brief looks at Honduras’s economic growth, which remains relatively strong; poverty, which has been reduced by nearly 15 percent since Hernández left office; income, which has been boosted by a 12 percent increase in the real average minimum wage; income inequality, which has been in decline over the past decade; unemployment, which has been declining since 2021; public sector investment, which has been boosted under Castro; remittances, which have generally remained steady; and external public debt, which has modestly decreased. n n“The modest economic gains and renewed social focus that we’ve seen in Honduras over the past several years could be an important factor in the upcoming election,” Johnston said. n n###