WASHINGTON, CMC – The International Monetary Fund (IMF) Monday said it is providing US$62 million to Suriname after its executive board approved the ninth and final review under the Extended Fund Facility (EFF) arrangement with the Dutch-speaking Caribbean Community (CARICOM) country.
The Washington-based financial institution said the new funds bring the total program to US$572 million. In completing the review, the executive board approved Suriname’s request for a waiver of non-observance of the end-December 2024 performance criteria on the central government primary balance based on the corrective actions the authorities have already taken.
In 2021, the IMF executive board approved Suriname’s EFF arrangement, with the country pursuing an ambitious economic reform agenda to restore macroeconomic stability and debt sustainability while laying the foundations for strong and more inclusive growth.
The program focused on restoring fiscal and debt sustainability, protecting the poor and vulnerable, upgrading the monetary and exchange rate policy framework, addressing banking sector vulnerabilities, and advancing the anti-corruption and governance reform agenda.
“The authorities’ reforms under the EFF-supported program—the first ever to be completed by Suriname—are increasingly bolstering macroeconomic stability and investor confidence. The economy is growing, inflation is approaching single digits, international bond spreads are at record low levels, and donor support is increasing,” said Kenji Okamura, the IMF Deputy Managing Director and Acting Chair.
He said that in view of the Final Investment Decision for the country’s oil resources, it is critical to establish robust institutional frameworks, including fiscal rules and improved transparency and accountability safeguards.
Okamura said such institutional improvements would help Suriname avoid the procyclical fiscal policy, prioritize urgent development needs, ensure intergenerational equity, and transform exhaustible resource wealth into financial assets.
“The near-term priority is to maintain the path for debt reduction while protecting the vulnerable from the burden of the adjustment. Gradually phasing out electricity subsidies and strengthening tax administration will help create fiscal space for higher, targeted social assistance and infrastructure spending.
“Fully implementing the recently finalized social assistance reform plan will make social programs more efficient and effective. Strengthening financial management controls in the state-owned electricity company, including regularly publishing its audited financial statements, will help promote accountability and oversight,” he added.
Okamura said the debt restructuring process is nearing completion, and bilateral agreements have been reached with all official creditors and all but one commercial creditor.
He said domestic debt arrears have been cleared. Improving budget commitment controls and addressing cash management weaknesses will restrain public spending and prevent the accumulation of supplier arrears.
“A restrictive monetary policy is supporting disinflation. The recent implementation of the agreed central bank recapitalization plan is critical in ensuring a substantial bank balance sheet with apparent operational and financial autonomy.
“The authorities’ commitment to a flexible, market-determined exchange rate supports international reserve accumulation. Timely implementation of recapitalization plans for undercapitalized commercial banks and improving the monitoring of non-bank financial institutions will help bolster financial sector resilience.”
Okamura said Suriname should persevere with their ambitious structural reform agenda to strengthen institutions, address governance weaknesses, build climate resilience, improve data quality, and address gender gaps.
“This important work will continue to be supported by capacity development from the Fund and other development partners,” Okamura said.
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