SURINAME-SEOB advocates for follow-up IMF program for Suriname

PARAMARIBO, Suriname, CMC—The Suriname Economic Oversight Board (SEOB) says a future-oriented follow-up program with the International Monetary Fund (IMF) is needed for the Dutch-speaking Caribbean Community (CARICOM) country to continue on the path to economic stability and growth.

The current IMF program ends early next year, and in its latest bulletin, the SEOB said the ongoing program had strengthened institutions, improved governance, and ensured a responsible budget policy.

Last month, an IMF delegation said it had reached a staff-level agreement with Suriname following a review of the economic reform program that is supported by the Extended Fund Facility (EFF) arrangement.

“All quantitative targets for the eighth review except the primary fiscal balance target were met. The authorities are taking corrective actions to meet the end-year primary balance target. Structural reforms are progressing with a strong impetus,” said Anastasia Guscina, who led the mission on its two-week visit.

She said that the staff-level agreement is subject to approval by the IMF’s Executive Board and is contingent on the fulfillment of all relevant Fund policies.

“Upon completion of this review, Suriname will have access to US$61.3 million, bringing total program disbursements to US$503.8 million.”

Guscina said the authorities’ commitment to maintaining prudent macroeconomic policies and difficult reforms is showing results in terms of macroeconomic stability and investor confidence.

“Economic growth is projected to reach three percent this year, inflation is on a steady downward trend, donor support is increasing, investor confidence is returning, and international reserves are increasing.”

SEOB said the program has contributed to macroeconomic stability and improved fiscal discipline.

However, it was warned that this progress would remain vulnerable without a follow-up strategy.

The independent SEOB, whose main objective is monitoring and advising the government on implementing the IMF program and the economic recovery plan, said that, unlike the current one, a follow-up IMF program would not have direct measures for society.

It said the follow-up IMF program should focus on key institutions and will not have direct measures for households.

It said that fiscal rules can help governments manage their income and expenditures responsibly and promote financial and economic stability by keeping government spending in check and controlling public debt.

Fiscal discipline will ensure that long-term economic growth is supported and that there are fewer disruptions. This is paramount in countries rich in natural resources, such as Suriname, due to the volatility in international oil and gold prices.

The need for minimum resource allocation for education, health care, and safety, for example, should also be included in the fiscal rules. The SEOB strongly recommends the introduction of fiscal rules, noting that the expected revenues from offshore oil production from 2028 onwards demonstrate the urgency of such rules.