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Foreign direct investment (FDI) in Honduras has fallen significantly in recent years, reflecting a climate of political and economic uncertainty that is affecting the confidence of international investors. According to figures from the Central Bank of Honduras (BCH), at the end of the third quarter of 2024, FDI reached US$590.7 million, representing a reduction of US$172.5 million compared to the same period last year. This decline is attributed to factors such as legal uncertainty, corruption, and political instability, which have created an unfavorable environment for the arrival of foreign capital.
The National Autonomous University of Honduras (UNAH) has warned of a complicated economic outlook for 2025 and 2026, noting that both internal and external factors could make it even more difficult to attract investment. In particular, political uncertainty, accentuated in an election year, is seen as a determining factor in the decline in FDI. Experts highlight that political polarization and mistrust in the electoral process could continue to negatively affect foreign investment in the country.
Infrastructure challenges and financial projections
According to studies by the Institute for Economic and Social Research (IIES) of the UNAH, the low competitiveness of the labor market, due to limitations in skills and competencies, reduces the country’s attractiveness to investors. In addition, institutional stability and citizen security continue to be important challenges that must be addressed to improve the investment climate.
At the sectoral tier, the financial and insurance sectors dominate with the majority of international capital flows, totaling US$383.9 million and representing 65% of the overall amount documented. The manufacturing field follows with US$119.8 million. Regarding the sources of investment, the leading countries contributing to Honduras are Colombia, Mexico, Bermuda, Panama, and Belgium.
Even though there has been a decrease in foreign direct investment, the Central Bank indicates that the economy grew by 4.1% from January to October 2024, primarily fueled by domestic spending and private sector investment. The BCH Monetary Program anticipates an economic expansion ranging from 3.5% to 4.5% for 2024 and 2025, with inflation managed between 4% and 5%. Nonetheless, specialists and business executives concur that, to maintain this upward trend, it is crucial to develop a more encouraging investment climate, which includes structural changes, enhanced transparency, and legal certainty.
The decline in foreign direct investment in Honduras not only reflects a scenario of political uncertainty, but also highlights the structural challenges that the country must overcome to ensure its economic stability. The economic future will depend largely on the ability to strengthen institutions, guarantee a safe and transparent environment, and rebuild investor confidence. In an electoral context that adds layers of complexity, the challenge will be to transform these adversities into opportunities to promote sustainable growth and attract the foreign capital necessary for national development.