IMF to Evaluate Honduras’ Subsidy

August 25, 2006

TEGUCIGALPA – An International Monetary Fund (IMF) technical mission Tuesday began evaluating the effect of Honduran government subsidies on the country, according to Finance Minister Rebeca Santos.

Santos told journalists the mission, made up of subsidy experts, will help the government create policies that allow it to “focus” subsidies on sectors that need them the most.

The mission’s objective is to “look for mechanisms to orient subsidies to the lowest-income populations and to prioritize sectors the state is strategically interested in promoting and supporting,” Santos said.

The government also hopes to establish a subsidy to freeze fuel prices and protect low-income sectors against the effects of continuously escalating fuel prices, she added.

The experts, who will be in Honduras for two weeks, will also analyze the impact of energy subsidies the government grants those who consume less than 300 kilowatts of electricity monthly.

According to statistics, the Honduran government designated at least $18.4 million in 2006 to subsidies to soften the impact of the rising prices of petroleum in local markets. The government also has a $14.7-million budget for energy subsidies.

 

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