We measure the impact of the COVID-19 (coronavirus) crisis and the resulting lockdown on formal firms in Honduras, using monthly value-added tax records for January 2018 to August 2020. Firms' revenue fell by 26 percent, or 342.6 billion lempiras (USD 14.3 billion), in real terms between March and August 2020 and the same period in 2019. Sectors subject to stricter containment measures experienced larger revenue losses. The service sector was the most severely affected, experiencing a 45 percent revenue loss. Larger firms experienced smaller revenue losses than smaller firms, even when accounting for the sectoral composition of firm-size groups. A non-negligible number of firms remained shut down until the end of available data in August 2020.
Authors
Anne Brockmeyer
Anne is head of the tax and development group at IFS and an honorary faculty member at UCL. Her work focuses on tax policy in lower-income countries.
Pierre Bachas
Pierre is an IFS Research Fellow and an economist in the Macro and Growth Unit of the World Bank's Development Research Group.
Camille Semelet
More from IFS
Understand this issue
Policy analysis
Academic research
