TEGUCIGALPA: Honduras expects its economy to grow up to 3.5 percent this year and its fiscal deficit to fall, and hopes to sign a three-year credit deal with the International Monetary Fund, the head of the country's central bank said on Friday.
The Central American country, which is one of the poorest in the Americas and has the world's highest murder rate, has struggled with public debt that has more than quadrupled since 2008 and a fiscal deficit that ended last year at 7.9 percent of gross domestic product.
"In 2014, we're planning for growth of between 2.5 and 3.5 percent, and the same for 2015," central bank President Marlon Tabora said at a news conference, adding that telecommunications, agriculture, manufacturing and trade would drive the growth.
Honduras' economy grew by 2.6 percent in 2013. The central bank expects the fiscal deficit to fall to 5.2 percent of GDP this year, and 3.3 percent in 2015, Tabora said.
In December, the Congress of Honduras signed off on the biggest tax overhaul in more than two decades, and the plan is expected to generate nearly $800 million a year in tax revenue. The soaring public debt of Honduras, the region's top coffee exporter, has led to nationwide strikes by unpaid doctors and teachers.
Tabora also said Honduras was ready to renegotiate a credit deal with the IMF, and hoped it would be signed this year after the fund finishes its analysis of the country's economy.
"We hope it will take as short a time as possible. We hope to reach a three-year agreement," he said.
A roughly $200 million IMF credit deal expired in March 2012, and Honduras failed to strike another after struggling to meet the fund's requirements.
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