Honduras 2025: rising unemployment and falling foreign investment

Honduras’s prospects for 2025 present major hurdles, marked by a significant rise in joblessness and a substantial decline in foreign direct investment (FDI). These circumstances highlight a climate of political and economic unpredictability that influences both the employment sector and the trust of investors, affecting the nation’s progress and security.

The rise in the jobless rate and the drop in foreign direct investment underline structural issues that need urgent action. It is crucial to introduce measures that encourage the creation of formal employment and enhance the investment landscape, aiming to support long-term economic growth and lessen the susceptibility of groups like youth and women.

Increasing joblessness and labor environment in Honduras

As reported by the Honduran Council of Private Enterprise (COHEP), the unemployment rate climbed to 7.2% by the close of 2024, highlighting an escalation in the labor crisis. This situation predominantly impacts women and the youth, who encounter greater hurdles in finding formal and stable employment. Additionally, underemployment affects over 1.6 million individuals, suggesting that a large segment of the populace is engaged in work that fails to fulfill their financial requirements.

Furthermore, close to one million youths encounter obstacles when trying to enter the official job market, restricting their chances for career growth. Employment without formal contracts remains a continuous issue, with 37% of those in informal jobs being between 15 and 29 years old, highlighting employment instability and the absence of social benefits.

These circumstances not only impact the well-being of employees, but also constrain economic expansion and the nation’s capacity to draw in investments. Employment instability and market unpredictability may obstruct economic recovery and efforts to alleviate poverty.

Decrease in international investment and economic forecast

Throughout 2024, foreign direct investment in Honduras demonstrated a decline. By September, FDI reached $590.7 million, indicating a decrease of $172.5 million compared to the same timeframe the year before. This drop signifies a climate that creates uncertainty for investors, impacting the essential capital flow for economic growth.

The Milken Institute’s 2025 Global Opportunity Index (GOI) ranks Honduras last in Latin America in terms of investment attraction, underscoring the need to improve aspects such as legal certainty, infrastructure, and political stability. The reduction in FDI limits the financing of productive projects and infrastructure essential for growth.

Therefore, an increase in joblessness and a decrease in overseas direct investment in Honduras throughout 2024 and 2025 indicate a state of uncertainty that impacts both economic and social stability. Implementing thorough and synchronized policies will be essential to enhancing the nation’s outlook on the economy and employment.

To change this scenario, it is deemed crucial to establish policies that enhance investor trust, upgrade infrastructure, and encourage safety. Cooperation between the government, the private sector, and civil society is vital to tackling present economic and employment issues and encouraging stronger and more balanced growth.