IMF, Suriname Agree on Final Review Under EFF
Washington, DC: An International Monetary Fund (IMF) team led by Ms. Anastasia Guscina conducted discussions with the Surinamese authorities during February 5-14 on policies to complete the ninth and final review of the 36-month Extended Fund Facility that was approved by the IMF’s Executive Board in December 2021 .
At the conclusion of the discussions, Ms. Guscina issued the following statement:
“The IMF team reached a staff-level agreement with the authorities on the ninth and final review of Suriname’s economic reform program that is supported by the EFF arrangement. All quantitative targets for the final review were met except the primary fiscal balance target. The authorities are taking policy steps to ensure that the 2.7 percent of GDP primary surplus target for 2025 remains within reach. The authorities have implemented most structural reforms under the program. This staff-level agreement is subject to approval by the IMF’s Executive Board, contingent on the fulfillment of all relevant Fund policies. Upon completion of this review, Suriname will have access to SDR 46.8 million (about USD 61.4 million), bringing total program disbursements to date to SDR 430.7 million (about USD 565.4 million).
“The broad objectives of the program have been achieved. Economic growth is projected to reach 3 percent this year, inflation is on a steady downward trend, donor support is increasing, investor confidence is returning, and international reserves are now at comfortable levels. Spreads have declined to the lowest levels on record highlighting the progress made towards restoring market access. The authorities face important near-term risks, including capacity constraints and policy implementation challenges reflecting the increasingly difficult socio-political environment. Suriname’s medium-term outlook has improved significantly with the announcement of the final investment decision (FID) paving the way for offshore oil production beginning in 2028.
“The authorities remain committed to maintaining fiscal discipline. The end-December primary balance target was missed mainly due to underperformance of non-tax revenues and overspending on electricity subsidies. The government also had to support rice farmers that lost their crops due to drought. The authorities are implementing corrective measures to bring the fiscal path in line with the 2025 budget. The recent approval by the National Assembly of amended public financial management law incorporating a fiscal rule and Savings and Stabilization Fund law are good steps toward strengthening the fiscal and institutional frameworks to enable the country efficiently and transparently manage the upcoming oil revenues. Broader structural reforms are necessary to increase efficiency, transparency, and accountability in the energy sector.
“Protecting the poor and vulnerable has been high on the agenda. The government met the indicative target on social assistance spending for end-December 2024 with a sizeable margin. Overall, spending on social protection has more than doubled in percent of GDP terms over the course of the program. Stronger efforts are needed to address the challenges in the execution of the social beneficiary program to ensure the benefits reach the intended beneficiaries, particularly in the country’s interior regions. The authorities should promptly implement the recently completed strategic plan to enhance the effectiveness of social protection with the support of development partners.
“Debt restructuring is largely complete boosting investor confidence. An umbrella agreement with the Paris Club for the second phase of debt restructuring was signed in October, facilitating negotiations with individual PC creditors. Negotiations are underway to restructure debt with the last remaining commercial creditor. Domestic debt arrears have been repaid and the government has been servicing all debt obligations on time. Credit rating agencies have upgraded Suriname’s debt ratings and international bond spreads are at historic lows.
“The continued restrictive monetary policy stance has further reduced inflation. The Central Bank van Suriname (CBvS) met all the monetary targets for the final review. The CBvS remains committed to a flexible, market-determined exchange rate and is working to improve the functioning of the foreign exchange market, including through the recently launched electronic foreign exchange trading platform. The recapitalization of CBvS has been completed in line with the requirements of the Central Bank Act.”
“Vulnerabilities in the banking system are being addressed. Timely completion of recapitalization plans of banks with capital shortages, and prudent monitoring of capital adequacy, liquidity and asset quality of banks are essential to preserve stability in the banking sector. The CBvS also needs to increase its monitoring of non-bank financial institutions, particularly with respect to their interconnectedness with the banking system.”
“The authorities need to push ahead with their ambitious structural reform agenda to strengthen institutions and governance. With the support of the IMF, the authorities have made important steps towards amending the anti-corruption legal framework to strengthen the income and asset provision for politically exposed persons. This amendment should be promptly enacted and implemented. Transparency of public official’s asset holdings would lessen the vulnerability to corruption that comes with the massive oil revenues. It is also very important to work towards getting the suspension lifted from the Extractive Industries Transparency Initiative.”
“The mission would like to thank the authorities for a collaborative and fruitful dialogue. Meetings were held with the President and Vice President of the Republic of Suriname, the Minister of Finance and Planning, the Minister of Spatial Planning and Environment, the Minister of Justice and Police, the Minister of Internal Affairs, the Central Bank Governor, the leadership and the finance committee of the National Assembly, other senior government officials, the leadership of the major opposition parties, civil society organizations, representatives of the private sector, and development partners.”
https://www.imf.org/en/News/Articles/2025/03/10/pr-2556-suriname-imf-reaches-agreement-on-final-rev-under-eff