TEGUCIGALPA Honduran economic growth is seen slowing to about 3% in 2023, the International Monetary Fund (IMF) estimated in a statement issued on Friday, pointing to fewer remittances and pressures on the energy and farm sectors stemming from drought conditions.

The Central American country's economy expanded by 4% last year, according to official data, and the government has forecast gross domestic product growth of between 3.5% and 4.0% this year.

The slowdown is mostly pinned on losses caused by the drought currently affecting agricultural and energy production, the IMF noted, adding that the dry streak could be more severe and protracted than previously expected.

Honduran authorities said earlier this week they would begin rationing electricity due to the drought's impact on the country's hydroelectric plants.

A drought linked to El Nino weather phenomenon is affecting much of Central America and is expected to cut into the region's harvests.

"Honduras remains one of the world's most vulnerable countries to climate disasters, with sizeable adaptation investment needs," the IMF statement said.

(Reporting by Gustavo Palencia; Writing by Valentine Hilaire; Editing by David Alire Garcia)