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Latin America Investment News on Viva Tropical

Honduras Needs a Bailout Plan

Article Summary:

Just as several European countries have done, Honduras must prepare itself to ask for a bailout. What little the country does collect goes to current expenditures such as salaries, wages, and allowances, leaving little for economic growth.

Photo Credit: Wall Street Journal

Original Article Text From La Tribuna Honduras via Google Translate :

Fosdeh: Honduras Must Prepare to Ask for Bailout

The Social Forum for the External Debt of Honduras (Fosdeh) raised in the spring meetings of the International Monetary Fund (IMF) and World Bank (WB) the need for Honduras request a bailout as they have done several European countries.

The coordinator Fosdeh, Mauricio Diaz Burdeth said yesterday after returning from Washington, United States, where some of the discussions about the global economy, “and that I still recommend just done now in the IMF and the WB, the approach concrete that Honduras must prepare a rescue plan. ”

Because “not only have access benefit and first world countries which so far are the only ones who have done it, but a country like ours could access that possibility,” he said.

The economist added that the country’s situation is complicated because the proceeds are insufficient due to the economic crisis and the little that is collected goes to current expenditure such as salaries, wages and allowances.

Also that “the deficit will have to consider beyond this administration, because something is technically called regressive tax policy, ie the policy that applies in the country does not contribute to economic growth, and if there is economic growth , then there is sufficient generation of employment and income, therefore, tax revenues tend to decrease. ”

And that, “according to the information we have, the probability” that Honduras accessing a new agreement with the IMF are null: “Officially it is said that there is virtually no agreement, however, understand that continued talks on spring meetings of this organization, “he said.

In the same way “we would say that the expectation exists, however, be difficult to accelerate the set of preconditions to fulfill something that can satisfy a little technical approach that the IMF has been” asking.

Fosdeh recommended that the funds from the removal of exemptions, 50 percent is to pay domestic debt, which exceeds 60,000 million Lempiras, and the remainder is allocated to public investment.

Link to Original Article:

From La Tribuna Honduras

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