The economy of Honduras, which is one of the poorest nations in the western hemisphere, relies on agriculture and timber. Light industries produce a variety of consumer goods and there is a small mining industry. The economy draws heavily on various forms of US-sponsored aid. Inflation is 7.7% (2004) and annual growth 5.5% (2006). Growth is dependent on the US economy, the continued export of non-traditional products such as melons and shrimp, and the reduction of the high crime rate.
Honduras suffers from massive unemployment and extremely uneven distribution of wealth. Export earnings have been badly hit in recent years by low world prices and slack demand within the Central American Common Market, of which Honduras is a member. To compound its difficulties further, Honduras is still feeling the consequences of Hurricane Mitch in 1998, which caused an estimated US$3 billion worth of damage.