Business Environment Snapshot for Honduras - Highlights

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Region: Latin America & Caribbean
Income category: Lower middle income

Population: 7,615,584 (2011)
GNI per capita (US$): 1,880

Below are select highlights for the data included in the profile.

Honduras is ranked 131st out of 183 economies in Doing Business 2011, recording a slight decline due to lower scores in six indicators.
According to the latest Enterprise Surveys (2006), Access to Finance, Corruption and Crime, Theft & Disorder represent the top three constraints to investment in Honduras. Out of firms surveyed, 46.87% reported having a line of credit or loans from financial institutions, compared to 48.05% for the region.
In the 2011 Index of Economic Freedom, Honduras’s score is 58.6. Its overall score is 0.3 point better than last year, with considerable gains in government spending and monetary freedom scores offset by declines in five other economic freedoms. Honduras is ranked 20th out of 29 countries in the South and Central America/Caribbean region, and its overall score is lower than the world and regional averages. The country performs relatively well in trade freedom and fiscal freedom. The Central America–Dominican Republic–United States Free Trade Agreement and other free trade agreements have enhanced the investment environment and facilitated economic diversification. However, the overall entrepreneurial environment continues to be hurt by pervasive corruption and weak protection of property rights, as well as judicial inefficiency and political instability.

View global rankings on the business environment. See the underlying scores, the trend indicator, and a radar chart with regional and income group comparisons.

View Comparison Chart

#	Indicator	Rank					Scale	Score									Trend over past year¹
#	Indicator	2012	2011	2010	2009	2008	Scale	2012	2011	2010	2009	2008	2007	2006	2005	2004	Trend over past year¹
1	Business Environment Index EIU - Global Outlook Report						1-10
2	Control of Corruption Indicator World Bank Group			159 (202)	159 (202)	159 (202)	-2.5-2.5			-0.9	-0.9	-0.8	-0.7	-0.8	-0.7	-0.7
3	Regulatory Quality World Bank Group			110 (202)	113 (202)	111 (202)	-2.5-2.5			-0.2	-0.3	-0.3	-0.2	-0.4	-0.5	-0.3
4	Country Credit Rating Institutional Investor		109 (178)	119 (178)	104 (178)	104 (174)	0-100		32.3	30.9	32.7	31.5	33.6	31.1	27.6	29.6
5	Index of Economic Freedom The Heritage Foundation and the Wall Street Journal	92 (178)	99 (178)	97 (178)	90 (179)	84 (157)	0-100	58.8	58.6	58.3	58.7	58.9	59.1	57.4	55.3	55.3
6	Political Risk Rating (ICRG) PRS Group	89 (140)	93 (140)	95 (140)	108 (140)	103 (140)	0-100	59.5	60.0	60.0	58.0	59.5	60.0	60.5	58.5	60.5
7	Doing Business Ranking* World Bank Group		128 (183)	130 (183)			1-183²

View Comparison Chart

Notes:

*Please Note: Rankings are reported here based on the year they were published, not the year indicated in the title of the publication. For example, the Doing Business 2011 report was published in 2010, and data from that publication is reported under the 2010 column. Also note that corrections are sometimes made to the data after publication of the annual Doing Business report. The most current data are reported in this table.

¹An up/down rating requires a change within the last 2 years with available data of at least 1%
²These two sources only provide rankings, not an underlying score. We do not report trends for these two, as trends on rankings cannot be compared with the trends on scores.

View more detailed data from Doing Business and the Enterprise Surveys, two flagship data products of the World Bank Group focusing on private sector development. View key economic and private sector development indicators.

Doing Business

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Source: Doing Business Website

Ease of...	DB 2012 rank	DB 2011 rank	Change in rank
Doing Business (Overall Ranking)	128	130	2
Starting a Business	150	146	-4
Dealing with Construction Permits	70	66	-4
Registering Property	94	92	-2
Getting Credit	8	37	29
Protecting Investors	166	166	0
Paying Taxes	140	136	-4
Trading Across Borders	103	92	-11
Enforcing Contracts	177	175	-2
Resolving Insolvency	131	126	-5

Three Well Performing Indicators	Percentile Rank¹	Indicator Value²	Compare with Income Group Average	Compare with Region Average
Protecting Investors: Extent of disclosure index (0-10)	99.5	0.0	4.9	4.1
Getting Electricity: Time (days)	94.5	33.0	98.0	67.7
Protecting Investors: Strength of investor protection index (0-10)	94.0	3.0	4.5	5.0

Three Potential Indicators for Reform	Percentile Rank¹	Indicator Value²	Compare with Income Group Average	Compare with Region Average
Enforcing Contracts: Time (days)	10.9	920.0	683.1	713.0
Getting Electricity: Procedures (number)	7.7	8.0	5.6	5.5
Starting a Business: Procedures (number)	7.1	13.0	8.7	9.4

¹A percentile rank of 1 reflects a country ranked for that variable in the bottom 1 % of countries. Conversely, a percentile rank of 100 reflects a country ranked for that variable in the top 1% of countries.
²The value shown in this column is the specific value for the indicator. For example, if there is a value of 9.8 for Starting a Business: Duration (Days), that means that for the particular country it takes 9.8 days to Start a Business.

New!

Read about Doing Business's new pilot indicator, Getting Electricity > See full indicator list

Enterprise Surveys

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Source: Enterprise Surveys Website

Top 10 Constraints to Firm Investment in Honduras

Note: These graphs compare the relevant country to the best and worst countries within the region and the world.

Time Series Data

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Source: WDI, ILO, S&P

	2008	2007	2006	2005	2004	2003	2002
Macro Indicators
GDP growth (annual %)	4.0	6.3	6.4	6.1	6.2	4.5	3.8
Inflation, consumer prices (annual %)	11.0	6.9	5.6	8.8	8.1	7.7	7.7
Total Returns Index (IFCGTRUS)	..	..	..	..	..	..	..
Financial & Private Sector Development Indicators
FDI Net Inflows (% of GDP)	6.0	6.7	6.3	3.8	3.7	3.0	2.3
Gross Fixed Capital Formation, private sector (% of GDP)	28.2	26.2	23.2	20.4	21.1	18.0	18.1
Tax revenue (% of GDP)	15.9	16.4	15.4	14.5	14.5	13.9	..
Exports of goods and services (% of GDP)	49.0	51.5	54.3	59.0	58.4	54.1	52.7
Imports of goods and services (% of GDP)	82.3	78.4	77.2	77.5	77.0	68.2	65.3
Domestic credit to private sector (% of GDP)	51.9	53.1	45.6	39.7	38.5	37.7	..
Domestic credit to private sector (% of total domestic credit)	102.3	104.1	106.1	102.2	102.6	98.9	..
Total Financial System Deposits to GDP	..	45.8	42.8	39.9	38.4	43.0	42.8
Bank nonperfoming loans to total (%)	..	..	..	6.6	6.4	8.7	11.3
Lending Spread	..	8.8	8.1	7.9	7.9	8.4	7.9
Private Sector Employment as a % of Total Employment	..	..	..	..	..	..	..
Business Entry Rate (new registrations as % of total)	..	..	..	..	..	..	..
Infrastructure Indicators
Paved roads (% of total)	..	..	..	..	..	..	..
Mobile cellular subscriptions (per 100 people)	..	..	..	18.8	32.2	58.9	85.8
Internet users (per 100 people)	..	..	..	3.8	4.9	6.0	9.1
Electric power consumption (kWh per capita)	..	..	..	625.7	641.9	691.7	..

View projects associated with the World Bank Group's Finance and Private Sector Development unit. View brief summaries of the private sector strategy as stated in the most recent Country Assistance Strategy (CAS) document.

Honduras Country Assistance Strategy (CAS) PSD focus:
(December 2006)

Improving competitive access to international markets - Administrative simplification by: Reduction in the time to register a business from 44 days in 2006 to 30 in 2008 and 24 by 2010 (Doing Business); Reduction of required export and import times from 34 and 46 days respectively in 2006 to 17 and 23 days by 2010 (Doing Business)

World Bank [Click to expand/collapse]
Project		Total Project Amount (US $ millions)	Contact
Name:	Financial Sector Technical Assistance Credit	9.90	Buchenau Hoth,Juan
ID:	P040177
Open/Close:	6/24/2003
Status:	Active
Name:	Honduras First Programmatic Financial Sector Development Policy Credit	25.00	Buchenau Hoth,Juan
ID:	P083311
Open/Close:	2/22/2005 - 5/30/2009
Status:	Closed
Name:	Enhancing Competitiveness: Trade Facilitation and Productivity Improvement Project	28.06	Haven,Thomas Edward
ID:	P070038
Open/Close:	10/21/2003 - 12/31/2010
Status:	Closed
International Finance Corporation [Click to expand/collapse]
Project		Total Project Amount (US $ millions)	Contact
Name:	Honduras Trade Logistics	0.26	Uma Subramanian
ID:	577188
Open/Close:	10/1/2010
Status:	Active
Name:	Bancovelo TA II	0.28	Ricardo Martin Garcia Tafur
ID:	579327
Open/Close:	7/1/2010
Status:	Active
Name:	Banco Atlantida MSMEHF	0.24	Ignacio Estevez
ID:	565568
Open/Close:	5/1/2010
Status:	Active
Name:	Ficohsa TA	1.32	Ricardo Martin Garcia Tafur
ID:	561589
Open/Close:	4/1/2008
Status:	Active
Name:	Banco Popular TA	0.48	Ricardo Martin Garcia Tafur
ID:	550645
Open/Close:	9/1/2007
Status:	Active
Name:	National Plan for Municipal Simplification in Honduras	0.60	Ursula Blotte
ID:	549645
Open/Close:	7/1/2007
Status:	Active
Name:	Honduras Technical Assistance Program	0.05	Damien Shiels
ID:	558268
Open/Close:	7/1/2007 - 6/30/2008
Status:	Closed

Title	Author/Contact	Source	Date
Doing business in a more transparent world 2012 - economic profile : Honduras - comparing regulation for domestic firms in 183 economies			01/12
Honduras - Country partnership strategy for the period FY07 - FY11 : IEG review		Country Assistance Strategy Document	11/11
Honduras - Country partnership strategy for the period FY2012-2014		Country Assistance Strategy Document	11/11
Honduras - Interim strategy note		Interim Strategy Note	09/10
Global Investment Promotion Benchmarking - Eyes on COMESA			04/10
Doing business 2011 : Honduras - making a difference for entrepreneurs : comparing business regulation in 183 economies			01/10
The U.S.- Honduras remittance corridor : acting on opportunities to increase financial inclusion and foster development of a transnational economy	Endo, Isaku ; Hirsch, Sarah ; Rogge, Jan ; Borowik, Kamil		11/09
Global Investment Promotion Benchmarking 2009: Summary Report			05/09
Doing business 2010 : Honduras - comparing regulation in 183 economies			01/09
Doing business 2009 : country profile for Honduras - comparing regulation in 181 economies			09/08
Honduras - Country assistance strategy progress report			05/08
A new model of public - private partnership for land access and rural enterprise formation	Childress , Malcom D, and Tom Korczowski	Agriculture and Rural development notes ; Note no. 32	02/08
Enterprise surveys Honduras : country profile 2006			06/07
Doing Business 2008 Honduras : comparing regulation in 178 economies			06/07
Honduras - Report on the observance of standards and codes (ROSC) : accounting and auditing			05/07

Notes:

Doing Business

Enterprise Surveys

Time Series Data

Banking and Credit Laws (Getting Credit, Protecting Investors)

Bankruptcy and Collateral Laws (Closing a Business, Getting Credit - Legal Rights)

Civil Codes (Starting a Business, Registering Property)

Civil Procedure Codes (Enforcing Contracts, Closing a Business, Protecting Investors)

Commercial and Company Laws (Starting a Business, Protecting Investors, Closing a Business)

Constitutions (Starting a Business, Employing Workers, Registering Property, Enforcing Contracts)

Labor Laws (Employing Workers)

Land and Building Laws (Dealing with Licenses, Registering Property)

Securities Laws (Protecting Investors)

Tax Laws (Paying Taxes)

Trade Laws (Trading Across Borders)