TEGUCIGALPA (Reuters) – Honduran opposition presidential candidate Xiomara Castro will search to barter a brand new debt cope with the Worldwide Financial Fund, however opposes elevating taxes or creating new ones, in keeping with a senior adviser.
Castro, almost 20 factors forward of her nearest rival in a preliminary vote depend of Sunday’s election, goals to decrease debt service funds, stated Hugo Noe on Tuesday, head of her marketing campaign’s coverage platform.
An present IMF cope with Honduras runs by way of January, when Castro might be sworn in because the nation’s first girl president if her benefit within the vote depend holds up.
“A dialogue with the Worldwide Financial Fund has begun,” Noe instructed Reuters. He didn’t supply a selected timeline.
Castro’s staff met with IMF officers previous to the election, during which the worldwide lender evaluated compliances with its present settlement with the federal government.
“Clearly, (a brand new deal) will rely upon its situations, if it has some extent of flexibility that aligns with the insurance policies of Libre” – Castro’s leftist social gathering – “there may be the potential for a deal,” he stated.
Noe, a former Honduran finance minister and central financial institution chief, harassed {that a} Castro-led authorities wouldn’t “enhance or create new taxes.”
The adviser stated the IMF talks may even cowl reforms to the state-run electrical energy firm ENEE, which runs a big finances deficit that weighs closely on authorities funds. He stated the present authorities’s proposal to presumably divide ENEE into three new firms, every targeted on both energy era, transmission or distribution, remains to be on the desk.
However all will stay public firms below a Castro authorities, he stated.
The Honduran financial system shrank 9% final 12 months, slammed by the pandemic plus two devastating hurricanes that hobbled the nation’s northern industrial heartland.
Noe stated Castro will search to decrease debt service funds by transforming the nation’s whole debt load, together with international debt, totaling almost $15.2 billion, or about 57% of GDP.
Funds have consumed greater than 30% of the federal government’s finances, leaving much less to spend on schooling and healthcare, amongst different urgent wants.
“We’ll search a repositioning of the debt,” he stated, noting that native banks may participate in a renegotiation during which cheaper credit might be sought to pay down higher-interest debt.
Honduras ran a 5.5% finances deficit final 12 months, however this 12 months its seen between 4.9%-5.0%, in keeping with finance ministry information, because the financial system begins to regain momentum.
(Reporting by Gustavo Palencia; Enhancing by David Alire Garcia and David Gregorio)
