Press Release No. 24/229

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

June 20, 2024

• The Executive Board of the International Monetary Fund completed the sixth review under the Extended Fund Facility (EFF) arrangement for Suriname, allowing for an immediate purchase equivalent to SDR 46.7 million (about US$ 61.5 million) of which SDR 19.1 million or about US$25.2 million would be for budget support.
• The authorities’ strong policy and efforts to stabilize the economy are yielding positive results: the economy is growing, inflation is on a steady downward trend, and investor confidence is returning.
• Building on the progress made thus far under the program, continued efforts are needed to entrench fiscal discipline, while protecting the poor and vulnerable, and further strengthen institutions and address governance weaknesses.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the sixth review under the Extended Fund Facility (EFF) for Suriname. The completion of the review allows the authorities to draw the equivalent of SDR 46.7 million (about USD 61.5 million), bringing total program disbursement to SDR 290.4 million (about USD 382.6 million). In completing the review, the Executive Board approved the authorities’ request for a waiver of non-observance of the end-March 2024 performance criteria on the central government primary balance, the net international reserves and net domestic assets of the central bank based on the corrective actions the authorities have already taken and have committed to undertake.

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 banking sector 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’ reforms under the EFF-supported program are increasingly reflected in macroeconomic stability and improving investor perceptions. The economy is growing, inflation is declining, donor support is increasing, and international bond spreads have reached historic lows.

“The authorities’ determination to carry out politically challenging reforms is commendable. Full removal of fuel subsidies, phasing out of electricity, water, and gas subsidies, broadening the VAT base, and containing the public wage bill are politically costly but necessary reforms. Structural reforms are proceeding with a stronger impetus.

“Noteworthy progress has been made on debt restructuring. Bilateral agreements with all official creditors and most commercial creditors have been achieved. Domestic debt arrears have been cleared. 

“The near-term priority is to ensure continuous fiscal consolidation, while protecting the vulnerable. Phasing out subsidies and strengthening tax administration will help finance higher social assistance and infrastructure spending. Implementing the recently finalized social assistance reform plan will promote more efficient and effective allocation of social assistance spending. Strengthening commitment controls and addressing weaknesses in cash management will contain public spending and prevent accumulation of supplier arrears. 

“Monetary policy is supporting disinflation. The authorities’ demonstrated commitment to flexible, market-determined exchange rate is supporting international reserves accumulation. Finalization of the central bank recapitalization plan will help further strengthen its operational independence and financial autonomy. Timely implementation of recapitalization plans of weaker banks will bolster financial sector resilience. Additional steps to improve liquidity management, enhance risk-based supervision, and strengthen the AML/CFT framework would be important.

“The authorities should persevere with their ambitious structural reform agenda to strengthen institutions, address governance weaknesses, bolster climate resilience, and improve data quality, including with continued capacity development support from the Fund and other development partners.”