Zelaya's wife to seek IMF deal if elected in Honduras: running mate

Gustavo Palencia
Former Honduras president Manuel Zelaya leaves the funeral ceremony for Venezuela's late President Hugo Chavez, at the Military Academy in Caracas, March 8, 2013. REUTERS/Jorge Dan Lopez

By Gustavo Palencia

TEGUCICALPA (Reuters) - The wife of ousted Honduran president Manuel Zelaya will seek a deal with the International Monetary Fund (IMF) to resolve a mounting debt crisis if she wins next month's presidential election, her running mate said on Thursday.

Juliette Handal, the vice-presidential candidate of Zelaya's wife Xiomara Castro, said their leftist Liberty and Refoundation Party (LIBRE) would seek assistance from the IMF to help tackle the country's bloated budget deficit.

"We're going to seek an accord with the International Monetary Fund based on reality; it's necessary, we're very clear about this," Handal told Reuters in Tegucigalpa as her party presented its plan for governing the country.

Honduras, the biggest exporter of coffee in Central America, is on track to post a budget deficit of at least six percent of gross domestic product for the second year running.

The election will be held on November 24, and latest polls show Castro and her conservative rival Juan Hernandez, head of Honduras' Congress, are running neck-and-neck.

Outgoing President Porfirio Lobo is constitutionally barred from running again after serving a four-year term.

A voter survey earlier this month gave Hernandez 28 percent support, compared with 27 percent for the 54-year-old Castro.

In 2010, the IMF agreed to provide some $200 million in financial support to the Central American country to help it strengthen its public finances and stabilize its economy.

The agreement expired in March 2012 and Lobo's government has failed to reach a new agreement with the Washington-based fund after falling short of consolidation targets.

The budgetary crisis has sparked strikes and protests by public sector officials like doctors, nurses in police in Honduras, one of the poorest countries in the Americas that also suffers from the highest murder rate in the world.

Castro, catapulted into the spotlight after a 2009 coup when she led protests against Zelaya's ouster, is running on a toned-down version of his leftist populism.

Many see Zelaya, whose removal triggered a deep political crisis, as the power behind Castro's candidacy. At rallies, supporters often cheer more for him than for his wife.

The election campaign has been dominated by debate over how to tackle the predations of drug gangs, a major cause of the country's high crime rate. Mexican cartels have moved into Honduras, using it as a staging point for moving large quantities of South American cocaine to the United States.

(Editing by Dave Graham and Ken Wills)