Fiscal progress earns Honduras ratings upgrade from Moody's

Ratings agency Moody's upgraded Honduras' government bond rating to 'B2' from 'B3'.

The outlook remains positive, Moody's said in a release.

The decision was based on a significant improvement of the country's fiscal profile and the implementation of institutional enhancements that "have brought increased discipline to the budget process, tighter controls on government expenditures, and improved tax administration."

Honduras reduced its fiscal deficit to 3.1% of GDP in 2015 from 7.9% in 2013, and at a faster pace than accorded with the IMF, noted Moody's.

A new fiscal responsibility law has also established a definitive deficit ceiling of 1% of GDP by 2019.

The positive outlook reflects Moody's belief that Honduras will continue to make steady fiscal progress during 2016-17 as well as on the structural reform agenda agreed with the IMF.​

​