Press Release No. 09/251

Press Release: Statement at the Conclusion of an IMF Staff Mission to Suriname

July 3, 2009

An International Monetary Fund (IMF) mission headed by Gamal El-Masry of the Western Hemisphere Department issued the following statement at the end of its discussions in Paramaribo:

“An IMF team visited Paramaribo during the last week of June to review recent economic and fiscal developments and discuss economic prospects and policies, ahead of the government's preparations for the 2010 budget. To this end, the team met with officials of the Ministries of Finance, Natural Resources, and the Central Bank of Suriname, as well as with representatives of the private and public sectors and the donor community.

“Suriname has not escaped the negative impact of the global financial crisis. Real GDP growth is expected to slow to 1½ percent in 2009, as the worldwide slump in aluminum demand has led to a sharp contraction in the local bauxite/alumina sector. However, growth is expected to pick up somewhat next year, in line the projected recovery in global activity.

“Reflecting the weaker economic activity, the central government balance is expected to deteriorate by 5 percentage points of GDP over two years, shifting from an estimated surplus of 2 percent of GDP in 2008 to an projected deficit of close to 3 percent in 2010. While the authorities' prudent management of the economy in recent years is providing welcome space for some relaxation of fiscal policy to cushion the economy, it will be important to ensure that the 2010 budget is consistent with preserving macroeconomic stability. In particular, the authorities are advised to delay the second phase of the wage reform program until the fiscal situation has stabilized. Looking ahead, the authorities should consider strengthening the tax system over the medium term to allow the informal gold sector to contribute its fair share to government revenue.

“We would like to thank the authorities for their hospitality and generous assistance in coordinating our meetings with government representatives and other officials.”