Press Release No. 23/456

IMF Executive Board Completes Fourth Review Under the Extended Fund Facility Arrangement for Suriname

December 15, 2023

• The IMF Executive Board completed the fourth review under the Extended Fund Facility (EFF) arrangement for Suriname, allowing for an immediate purchase equivalent to SDR 39.4 million (about US$ 53 million). The Board has also approved the authorities’ request for an extension of the arrangement (until March 2025) and augmentation of access equivalent to SDR 46.8 million (about US$ 63 million).
• Fiscal discipline and tight monetary policy are bringing about the long-awaited stability. The economy is growing, inflation is coming down, and investor confidence is returning. The authorities have completed the private debt exchange and are close to concluding agreements with all remaining creditors.
• The authorities’ near-term priority is to maintain fiscal prudence while protecting the most vulnerable, preserve the structural reform momentum, and avoid policy backtracking.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the fourth review under the EFF arrangement for Suriname. The completion of the review allows the authorities to draw the equivalent of SDR 39.4 million (about US$53 million), bringing total purchase under the EFF arrangement to SDR 197 million (about US$263 million). In completing the review, the Board also approved the authorities’ request for an augmentation of access equivalent to SDR 46.8 million (about US$ 63 million) and an extension of the EFF arrangement to end-March 2025. With this augmentation, the total access expected under the EFF arrangement is SDR 430.7 million (about US$ 577 million).

Suriname is implementing an ambitious economic reform agenda aimed at restoring fiscal and debt sustainability through fiscal consolidation and debt restructuring, protecting the vulnerable by expanding social protection, upgrading the monetary and exchange rate policy framework, addressing the financial sector’s vulnerabilities, and advancing the anti-corruption and governance 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).

Following the Executive Board discussion on Suriname, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, issued the following statement:

“The authorities’ have shown continued commitment to fiscal discipline and macroeconomic stabilization under the EFF-supported program. The economy is stabilizing, pressures on the exchange rate have eased, and inflation is on a downward trend.

“The authorities’ implementation of difficult reforms in a challenging political and socio-economic environment is commendable. These included reforms such as complete elimination of fuel subsidies, gradual phasing out of electricity subsidies, curtailing wage payments to unregistered public servants, and broadening the VAT base.

“A more gradual path of fiscal consolidation than planned at the previous review will help protect the still fragile recovery, increase support for the poor and vulnerable, prevent further erosion in real wages for registered civil servants, and scale up growth-enhancing investment. An extension of the arrangement to end-March 2025 and an augmentation of access will help address balance of payment needs and help ensure that the 2025 budget is consistent with the 3.5 percent of GDP primary balance target (medium-term debt sustainability anchor).

“Excellent progress has been made with debt restructuring. The debt exchange with private bondholders has been finalized with high participation rate. An agreement in principle at the technical level has been reached with Exim China and is under internal approval process for signature. 

“The monetary policy stance has been appropriately tight, helping ease inflationary pressures. The authorities demonstrated commitment to a flexible, market-determined exchange rate is helping support accumulation of international reserves. Swift implementation of the new Central Bank Act and finalization of its recapitalization plan will help further strengthen its operational independence and financial autonomy. Steadfast progress is also necessary to address continued banking system vulnerabilities, including through stronger oversight of the banking system and promptly finalizing the assessment of the government-owned bank’s recapitalization plan.

“Structural reforms to strengthen institutions, governance, and data quality remain key priorities with continued capacity building support by the Fund and other development partners. The authorities should continue pursuing measures to strengthen their anti-corruption and AML/CFT frameworks and ensure their alignment with international standards.”

                           Suriname: Selected Economic Indicators