TEGUCIGALPA,Honduras on Friday raised its 2011 economic growth estimate to between 3.5 percent and 4 percent to reflect higher prices from coffee, one of the Central American nation's top exports.
The more upbeat forecast factors in "an extraordinary spike in international coffee prices," said Maria Mondragon, president of Honduras' central bank. The textile industry is also contributing to the improved view, she said.
Prior to the jump in coffee prices Honduras' government forecast gross domestic product growth of between 2.5 percent and 3.5 percent for this year.
Prices have risen after bad harvests in major production regions like Asia and South America hurt supply at a time of rising global demand.
Honduras' economy grew 2.6 percent in 2010, according to preliminary data, following a 2.1 percent contraction in 2009.
"I think that coffee will have a more important role in economic growth not only because of great prices but also thanks to production volumes and sales," Mondragon added.
Honduras, whose beans are traditionally thought of as lower in quality than those of neighbors like Guatemala or Costa Rica, is pushing to boost arabica coffee output and improve quality at the same time.
Coffee exports generated $722 million for Honduras last year, up from $531 million in 2009.
Source: Reuters
