Prior to Hurricane Mitch in the fall of 1998, Honduras had been pursuing a moderate economic reform program and had posted strong annual growth numbers. The storm has dramatically changed economic forecasts for Honduras, one of the poorest countries in Central America and the hardest hit by Mitch. Honduras sustained approximately $3 billion in damages.
Hardest hit was the all-important agricultural sector, which is responsible for the majority of exports. Significant aid has helped to stabilize the country.
In addition, the Paris Club and bilateral creditors have offered substantial debt relief, and Tegucigalpa is currently under consideration for inclusion in the IMF-World Bank Highly Indebted Poor Countries Initiative (HIPC). Additional financing will be needed to restore the economy to its pre-Mitch level.
On Wednesday, March 24 2004, the president of the Mexican United States, Vicente Fox, and his wife Marta Sahagun visited Honduras on the first State visit in 38 years of a Mexican president