WASHINGTON, the International Monetary Fund (IMF) Wednesday said that Suriname would receive US$63 million following the successful completion of the seventh review under the existing Extended Fund Facility (EFF). It was noted that US$25.8 million would be used for budget support.
The IMF executive board said that the disbursements of the funds bring to US$455 million, the amount provided to the Dutch-speaking Caribbean Community (CARICOM) country under the 36-month EFF arrangement.
In completing the review, the IMF executive board also approved Suriname’s 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 IMF on December December 22 an amount of US$688 million.
“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,” said IMF managing director Kenji Okamura.
He said the near-term priority is to reinforce the planned fiscal consolidation and protect the vulnerable from the adjustment’s burden.
“Phasing out electricity subsidies and strengthening tax administration will help create fiscal space for higher social assistance and infrastructure spending. 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,” Okamura said, adding that “the debt restructuring process is nearing completion.”
The IMF official said bilateral agreements with all official creditors and most commercial creditors have been achieved, and 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’ commitment to a flexible, market-determined exchange rate supports international reserve accumulation. Timely implementation of recapitalization plans for commercial banks that do not meet regulatory capital requirements will bolster financial sector resilience,” Okamura said
He said the Suriname 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,” Okamura said.
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