TEGUCIGALPA, Nov 23 (Reuters) - The Honduran central bank
said on Monday that devastation caused by Hurricane Eta will
shave an additional percentage point from economic growth, which
along with the fallout from coronavirus will lead to a
contraction of 8-9% in 2020.
"Taking into account the damage caused by Storm Eta, we have
made a new calculation and the contraction increases by 1
percent, and once you include the forecast for COVID-19, we are
talking about a range of between 8 and 9 percent," said central
bank president Wilfredo Cerrato.
That would make it the sharpest recession on record. The
current nadir was in 1954, when the Honduran economy contracted
by 6.5%, according to the central bank president.
To prop up the Central American nation's ailing economy, the
central bank cut its benchmark interest rate by 75 basis points
to 3.0%, its lowest level since 2005.
"The monetary policy rate has been lowered to 3 percent from
3.75 (percent) to ease and stimulate credit," Cerrato said.
Earlier this month Honduras and neighboring Central American
nations were walloped by the one-two punch of Eta and a few days
later Hurricane Iota, which unleashed torrential rains that
caused widespread deadly flooding and mudslides.
(Reporting by Gustavo Palencia; Writing by Anthony Esposito;
Editing by Frank Jack Daniel and David Gregorio)