September 20, 2024
- The Executive Board of the International Monetary Fund completed the seventh review under the Extended Fund Facility (EFF) arrangement for Suriname, allowing for an immediate purchase equivalent to SDR 46.7 million (about USD 63 million) of which SDR 19.1 million or about USD 25.8 million would be for budget support.
- The authorities’ commitment to maintaining prudent macroeconomic policies and implementing difficult reforms are yielding positive results: the economy is growing, inflation is coming down, international bond spreads are at record lows, and investor confidence is returning.
- Building on the progress made thus far under the program, the authorities should entrench fiscal discipline, particularly in the run up to the elections while protecting the poor and vulnerable. Persevering with structural reforms to strengthen institutions and address governance weaknesses is also critical.
The Executive Board of the International Monetary Fund (IMF) completed the seventh review under the Extended Fund Facility (EFF) arrangement for Suriname. The completion of the review allows the authorities to draw the equivalent of SDR 46.7 million (about USD 63 million), bringing total program disbursement to SDR 337.1 million (about USD 455 million). In completing the review, the Executive Board approved the authorities’ request for a waiver of non-observance of the end-June 2024 performance criteria on the central government primary balance based on the corrective actions the authorities have already taken.
Suriname is implementing an ambitious economic reform agenda to restore macroeconomic stability and debt sustainability, while laying the foundations for strong and more inclusive growth. The program includes policies to restore fiscal and debt sustainability, protect the poor and vulnerable, upgrade the monetary and exchange rate policy framework, address banking sector vulnerabilities, and advance the anti-corruption and governance reform agenda. These policies are supported by the EFF arrangement, which was approved by the Executive Board on December 22, 2021 (see Press Release No. 21/400), in an amount equivalent to SDR 472.8 million (366.8 percent of quota).
Following the Executive Board discussion on Suriname, Mr. Kenji Okamura, Deputy Managing Director, and Acting Chair, issued the following statement:
“The authorities’ reforms under the EFF-supported program are being increasingly reflected in macroeconomic stability and improving investor confidence. The economy is growing, inflation is declining, international bond spreads have reached historic lows, and donor support is increasing.
“The near-term priority is to reinforce the planned fiscal consolidation and protect the vulnerable from the burden of the adjustment. Phasing out electricity subsidies and strengthening tax administration will help create fiscal space for higher social assistance and infrastructure spending. Fully implementing the recently finalized social assistance reform plan will make social programs more efficient and effective. Strengthening commitment controls and addressing weaknesses in cash management will contain public spending and prevent accumulation of supplier arrears.
“The debt restructuring process is nearing completion. Bilateral agreements with all official creditors and most commercial creditors have been achieved. Domestic debt arrears have been cleared.
“A tight monetary policy is supporting disinflation. Implementing the recently-finalized plan for central bank recapitalization will strengthen the central bank’s operational and financial autonomy. The authorities’ demonstrated commitment to a flexible, market-determined exchange rate is supporting international reserve accumulation. Timely implementation of recapitalization plans for commercial banks that do not meet regulatory capital requirements will bolster financial sector resilience.
“The authorities should persevere with their ambitious structural reform agenda to strengthen institutions, address governance weaknesses, build climate resilience, and improve data quality. This important work will continue to be supported by capacity development from the Fund and other development partners.”