Labor crisis in Honduras 2025: unemployment and investment in decline

The economic forecast for Honduras in 2025 encounters major obstacles, marked by a notable rise in unemployment and a substantial decrease in foreign direct investment (FDI). These circumstances denote a scenario of political and economic unpredictability that influences both the job market and investor trust, affecting the nation’s growth and stability.

The rise in unemployment figures and the drop in foreign direct investment underline fundamental issues that need urgent resolution. This scenario necessitates the introduction of strategies that encourage the generation of formal employment and enhance the investment landscape to support long-term economic development and lessen the fragility of groups such as youths and women.

Increasing joblessness and labor environment in Honduras

As per the Honduran Council of Private Enterprise (COHEP), the jobless rate climbed to 7.2% by the conclusion of 2024, highlighting a worsening employment crisis. This situation predominantly impacts women and the youth, who encounter more challenges in securing formal and secure employment. Additionally, over 1.6 million individuals experience underemployment, illustrating that a large segment of the population is working in circumstances that fail to satisfy their financial requirements.

In addition, nearly one million young people face barriers to entering the formal labor market, limiting their opportunities for professional development. Informal employment is a persistent challenge, with 37% of informal workers in the 15-29 age group, reflecting job insecurity and lack of access to social benefits.

Such conditions not only impact the quality of life for workers but also restrict economic expansion and the nation’s capacity to draw in investment. Employment instability and market volatility can impede economic recovery and the reduction of poverty.

Decline in foreign investment and economic outlook

In 2024, Honduras experienced a decrease in foreign direct investment. By September of that year, FDI reached $590.7 million, marking a drop of $172.5 million compared to the same period the year before. This reduction indicates a climate that creates uncertainty for investors, impacting the influx of capital needed for economic growth.

The 2025 Global Opportunity Index (GOI) by the Milken Institute places Honduras at the bottom of the list in Latin America regarding investment appeal, highlighting the necessity to enhance areas like legal certainty, infrastructure, and political stability. The decrease in FDI hampers the funding of productive projects and crucial infrastructure for development.

Therefore, the increase in unemployment and the decrease in foreign direct investment in Honduras over the years 2024 and 2025 illustrate a situation of uncertainty impacting both economic and social stability. Implementing comprehensive and coordinated policies will be essential for enhancing the nation’s economic and job outlook.

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.