00:00Honduras is currently reporting an inflation rate of 6%, nearly double the regional average.
00:06In terms of daily life, the cost of the basic food basket has risen by 30% during the first
00:12six months of this year, and many businesses fear that closure is imminent.
00:16Gerardo Torres-Elaya reports from Tegucigalpa, Honduras.
00:23Prices in Honduras have kept rising this year.
00:25However, the basic food basket has already seen a 30% increase, while some supplies have
00:31gone up by more than 50%.
00:33This makes it virtually impossible for small business to remain viable, as they face both
00:39a general rise in prices and a population with reduced purchasing power.
00:47You just can't manage it.
00:52Here, you've barely scraped together an average of 3,000 to 4,000 lumpuras, about
00:58$100 to $150, and out of that, you have to pay the people doing the bookbinding.
01:07It's impossible.
01:08Then there's the electricity, which is more expensive now.
01:14They say rates went up by 7%.
01:18The problem is that the cost of all materials has gone up.
01:22If you raise your prices,
01:27well, it's rare to find people who want to get a book repaired.
01:33Fewer people read anymore, and they don't want to pay the actual cost.
01:40Before, a cardboard sheet cost 28 lempiras.
01:45Now, it's 42.
01:50How can you do the work at the old prices when everything has gone up?
01:56In Honduras, 75% of business are micro-enterprises.
02:00Priority, 12% are small-medium-sized, and only 3% are large companies.
02:05Experts state that inflation always hits the poorest the hardest.
02:14Small businesses and micro-enterprises are the most affected by inflation.
02:19Because the costs of inputs, energy, and transport rise,
02:24small and medium-sized enterprises,
02:27see their profits drop.
02:29Because they cannot absorb these increases.
02:32They lose money and lack the leverage large companies have to negotiate with suppliers.
02:38Large companies have the ability to negotiate prices based on volume.
02:44Rolando Soto has spent his entire life working in printing, bookbending, and book restoration.
02:50He has supported his whole family,
02:52but he feels that this is the most difficult situation he has ever faced.
03:00Materials used to be cheap
03:01so we could keep our prices low.
03:09As all costs rise, small work shops,
03:14tailors, leather shops, furniture repair shops, shoe repair shops,
03:19have all seen business decline because
03:22prices have changed.
03:25Yet people are still used to the old rates.
03:30As many other owners of small business in Tegucigalpa, Honduras,
03:34Rolando Soto is suffering the consequences of inflation,
03:37of the increase of prices,
03:39and how everyday Hondurans have less money
03:42to buy the products that he offers.
03:44It's a complicated economic situation
03:47that is worsening everyday in the country.
03:50For Telesur in English from Tegucigalpa, Honduras,
03:52Gerardo Torres Zelaya.
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