## 1surea2024002 - 46.7 million (about USD 62 million) of which SDR 19.1 million or about USD 25 million ## Source details **Canonical URL:** [1surea2024002 - 46.7 million (about USD 62 million) of which SDR 19.1 million or about USD 25 million](https://www.imf.org/-/media/files/publications/cr/2024/english/1surea2024002.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2024/english/1surea2024002.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2024/english/1surea2024002.pdf.json) --- ### Executive summary and Board action - Executive Board completed the fifth review under the Extended Fund Facility (EFF) arrangement for Suriname and granted a waiver for nonobservance of a performance criterion. - Completion allows the authorities to draw the equivalent of SDR 46.7 million (about USD 62 million), bringing total disbursement to SDR 243.7 million (about USD 323 million). - Suriname’s EFF arrangement was approved on December 22, 2021. - All quantitative performance criteria for this review were met; the indicative target on social spending was missed. - Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, highlighted authorities’ commitment to fiscal discipline and macroeconomic stabilization and urged perseverance with structural reforms. ### Macroeconomic outcomes and outlook - Growth and inflation: - Growth expected to have reached 2.1 percent in 2023 and recover to around 3 percent in 2024. - Headline inflation was 29 percent y/y in January; projected to decline to 14 percent y/y by end-2024. - External position and reserves: - Real effective exchange rate expected to appreciate by around 12 percent during 2024. - Usable international reserves now stand at close to 6 months of imports. - Risks and upside: - Near-term downside risks from policy implementation challenges, especially around the election period. - Financial stability risk from potential banking-sector problems (deposit outflows, systemic instability). - External risk from deterioration in terms of trade, notably materially higher oil prices. - Medium-term upside: potential development of large new oil fields could materially boost growth, employment, exports, fiscal revenues, and improve debt dynamics (see Hypothetical oil scenario). ### Program performance, conditionality, and immediate data - Performance criteria and targets: - End-December 2023 performance criteria on the floor on the primary fiscal balance, the ceiling on the NDA of the central bank (CBvS), the floor on NIR and the ceiling on the central government mineral revenue in local currency were met. - All continuous PCs were met; primary fiscal balance target evaluated on a cash basis and does not capture accumulation of domestic supplier arrears. - End-December floor on social assistance spending (indicative target) was missed by SRD 885 million (one-time payment delayed to January 2024). - Compliance highlights and data points: - Revenue was "1.4 ppts of GDP lower than budgeted" but offset by lower expenses. - Preliminary data suggests sizeable net accumulation of supplier arrears of SRD 5,023 million during 2023. - Program financing and Fund credit: - Out of the SDR 46.7 million scheduled for the fifth review, SDR 19.1 million (41 percent) would be made available for budget support. - Fund credit outstanding will peak in 2025 at 42.1 and 12½ percent of usable reserves and GDP, respectively. - Annual debt service to the Fund peaks in 2029 at 4.1 percent of exports of goods and services. - IFI commitments include IDB budget support of at least USD 150 million in 2024 conditional on IMF program review and CDB USD 25 million in budget support in 2024 and 2025. ### Fiscal outlook, measures, and targets - 2024 budget and fiscal targets: - Authorities’ 2024 budget targets a primary central government surplus of 2.7 percent of GDP. - Memo: Primary Balance series includes 1.0 1.3 2.7 3.5 (as shown in staff table). - Key measures and parameters: - Wage bill: maintain at 6.7 percent of GDP in 2024; remove unregistered and chronically absent workers to create space for wage increases. - VAT: standard-rate coverage expanded to cover 60 percent of the consumption basket; a new 5 percent rate to be introduced on water, electricity and cooking gas in June 2024; over 4,000 companies had registered for VAT at end-December 2023. - Fuel: fuel subsidies eliminated early 2023; specific taxes reimposed in May 2023 generating an estimated 0.8 percent of GDP in revenue in 2023; formula to adjust fuel tax inversely with international price changes to achieve revenue neutrality floor. - Electricity tariffs: average electricity tariffs increased by 36 percent in 2023; schedule of tariff increases adopted for 2024 to reach cost-recovery by end-2024. - LPG subsidies: September 2023 LPG prices increased by around 425 percent, reducing subsidy to 55 percent of the cost; further increases to eliminate subsidy by September 2025. - Cash transfers: targeted cash transfers value increased by 42 percent in July 2023; retroactive benefits delivered in December 2023; further bonus paid in January 2024; program coverage and transfer values published monthly (end-January 2024 SB, met). - Capital spending: increase to 3.5 percent of GDP in 2024, prioritizing growth-enhancing and climate-integrated projects. - Contributions to fiscal adjustment (selected numbers from staff table): - Annual change of Primary Balance (various columns): 1.6 0.6 0.3 1.1 1.4 0.8 0.8 4.0 4.0 - Adjustment from Policy Changes (various entries): 0.5 3.2 3.9 3.6 3.8 0.7 0.7 8.0 8.9 ### Debt restructuring, arrears, and sustainability - Progress on restructuring: - Bilateral agreements with all official creditors completed; debt exchange with private external bondholders finalized. - Domestic debts to the central bank and commercial banks have been restructured. - Arrears and domestic debt: - Public debt stood at 91.8 percent of GDP at end-2023. - Authorities intend to fully clear remaining domestic debt arrears by end-March 2024 (new proposed SB). - Total stock of accounts payable—80 percent supplier arrears—rose to 5 percent of GDP at end-2023. - Preliminary data indicates net accumulation of supplier arrears of SRD 5,023 million during 2023. - Gross financing needs (GFN): - Elevated in 2024 but aligned with program limits. - Peaking at 9.0 percent of GDP in 2033 and averaging 7.1 percent of GDP over the medium- to long term. - Projected increase to 8.9 percent of GDP in 2024 due to delayed clearance of domestic debt and supplier arrears. - Debt sustainability outlook: - Under the restructuring scenario, public debt projected to decline rapidly to 21 percent of GDP by 2030 (hypothetical oil scenario) and to fall below 70 percent by 2029 in staff projections. - Public debt 116.8 percent of GDP as of 2022 (Annex I). - External debt projected to be 114 percent of GDP at end-2023, down from 148 percent at end-2022. - DSA concludes public debt would be placed on a steady downward trend: below 90 percent in 2024, below 70 percent in 2029, and below 50 percent in 2035 (program baseline). ### Hypothetical oil scenario (summary of projections) - Assumptions and timing: - Final investment decision (FID) for oil extraction on block 58 by end-2024; oil production begins by end-2028. - Peak production of 79 million barrels in 2030 and 2031. - Total project investment of USD 9 billion; pre-investment flows starting at end-2024. - Projected macro impacts (scenario vs baseline): - Growth peaking at about 22.4 percent in 2028 and stabilizing at 5 percent over the long term. - Oil revenue rising to about 25 percent of GDP in 2029; value of oil exports peaking in 2029 with an increase of about 28 percent of GDP relative to baseline. - Value of oil revenues tied to payments of debt in the VRI amounts to an average of about 3 percent of GDP annually in 2028–30. - Gross international reserves expected to increase to 148 percent of GDP by 2035. - Public debt projected to decline rapidly to 21 percent of GDP by 2030. - Caveat: scenario is highly uncertain and contingent on continued fiscal prudency and realization of the FID and production timeline. ### Monetary policy, FX, and reserves management - Monetary stance and transmission: - CBvS maintaining restrictive policy targeting decline in money supply in inflation-adjusted terms; sterilization via open market operations and central bank certificates. - Private sector credit growth slowed; loan and deposit rates remain negative in ex ante real terms. - Reserve money target missed in last two weeks of December 2023; banks held cash for holiday demand and January withdrawals. - FX market and infrastructure: - Authorities committed to a flexible, market-determined exchange rate. - Planned electronic FX trading platform (end-September SB) not met; expected with delay in March 2024 after technical problems resolved (later operationalized in March 2024 in supplement). - Key FX cash flow figures (selected, USD millions): - Inflow of FX (CBvS and Central Government) series: 590 694 799 517 2,600 - Govt. mineral and other FX revenues 1/: 260 160 265 326 1,010 - IMF financing: 54 157 251 63 580 - Outflow (CBvS and Central Government): 386 292 555 492 1,725 - Debt service 2/: 134 165 310 301 910 - Change in Gross Foreign Reserves of CBvS (+: Increase): 20 21 52 244 256 23 (table formatting preserved as in source). ### Banking sector, financial stability, and central bank governance - Banking sector vulnerabilities and indicators: - Asset quality improving, but NPLs and loan losses remain high. - Capital adequacy for banking system is 19.1 percent; two banks do not meet regulatory minima. - Sector liquidity: 52.8 percent of assets, concentrated in two large systemic banks. - Regulatory capital to risk-weighted assets series: 9.6 11.4 11.8 14.5 16.8 18.4 18.7 18.9 19.1. - NPL to gross loans series: 12.0 10.6 14.6 12.8 12.4 16.1 14.3 14.0 13.9. - Recapitalization and supervision: - Two banks with capital shortages submitted time-bound recapitalization plans; CBvS reviewed and finalized these plans (end-October SB, not met, implemented with delay in December). - CBvS to set interim CET1 and CAR targets for these banks and define prompt corrective actions (new proposed SB for end-March 2024). - CBvS recapitalization plan for the central bank being developed; plan proposed to be reset to end-April 2024. - Legal and resolution framework: - Amendments to the Banking and Credit Supervision Act enacted; Bank Resolution Bill enacted to strengthen CBvS powers for early intervention, recovery and resolution. - Governance framework for state-owned banks agreed (end-December SB, not met on time; implemented with delay in February); implementation planned by end-2025. - Financial soundness indicators (selected percent series): - Return on assets (ROA, annualized): 0.1 1.0 2.0 1.8 2.7 1.2 2.0 2.2 2.4 - Liquid assets to total assets: 40.2 46.8 51.5 58.8 54.3 52.3 53.7 53.2 52.8 ### Structural reforms, governance, AML/CFT, procurement, and statistics - Governance and anti-corruption: - Ratified UNCAC; Anti-Corruption Commission operationalized (May 2023). - Proposed reforms to anti-corruption framework to require income and asset declarations of politically exposed persons, routine verification, publication, and sanctions (SBs proposed end-June and end-September 2024). - AML/CFT: - 2022 CFATF assessment placed Suriname on enhanced follow up; new AML/CFT law enacted November 2022. - To comply with FATF requirements Suriname must enhance AML/CFT supervision, implement risk-based supervision for DNFBPs, resource the FIU, increase ML/TF investigations, and amend International Sanctions Framework. - Second national risk assessment planned to be completed by mid-2024. - Procurement and SOE oversight: - New procurement law drafted with IDB support; enactment expected in March (after earlier missed SB) to centralize publication and require beneficial ownership disclosure. - Publish financial information for largest SOEs and initiate quarterly monitoring; fiscal risk report planned. - Statistics and data: - Progress in monetary, financial and BoP statistics; statistics office budget increased. - Additional efforts required to improve GDP statistics and timeliness and provide more disaggregated CPI data. - Extensive routine data provision requirements specified in the Technical Memorandum of Understanding (daily/weekly/monthly/quarterly reporting schedules). ### Program monitoring, structural benchmarks, and reporting - Structural benchmarks and status (selected): - Establish competitive FX auctions — Target: December 2021 — Status: Met. - Electronic FX trading platform — Target: June 2022 / expanded target 17 September 2023 — Status: Not met; expected with delay in March 2024. - CBvS recapitalization plan — Target: September 2022 / 21 March 2024 — Status: Not met; proposed to be reset to April 2024. - Publish CBvS audited financial statements (FY 2016–2018; FY 2020–2021; FY 2022) — several dates missed and proposed resets; FY 2016–2018 implemented with delay in February. - MoU among CBvS, MOFP, and SDMO on external debt payments — Target: end-January SB — Status: Met. - Indicative target on social spending — End-December 2023 — Status: Not Met (missed by SRD 885 million). - New proposed SBs to expedite VAT refunds, address domestic debt arrears, strengthen expenditure commitment controls, fully constitute the CBvS Executive Board and Council, and improve financial sector resilience. - Reporting and monitoring: - Extensive data submission calendar detailed in TMU, including daily FX transactions, weekly CBvS cash flows and mineral revenues, monthly CG operations in GFS format within six weeks, and quarterly FSIs within 60 days. - Note: a data misreporting incident led to a de minimis misreporting on the primary fiscal balance (cash basis) for the fourth review (USD 0.16 million, or 0.005 percent of GDP); corrective actions and TA requested. ### Staff appraisal, priorities, and concluding assessment - Staff view: - Program performance described as solid overall, with progress on multiple fronts but with notable delays in some structural benchmarks and a missed social spending indicative target. - Emphasis on maintaining reform momentum given near-term downside risks. - Priority actions recommended: - Preserve fiscal discipline to put public debt on a firmly downward path and build resilience to future shocks. - Promptly clear domestic debt arrears and stop accumulation of supplier arrears. - Phase out untargeted subsidies (electricity, water, gas) while protecting vulnerable households via improved social spending efficiency and expanded targeted cash transfers. - Finalize central bank recapitalization plan and strengthen central bank governance and operational independence. - Strengthen tax administration (mandatory fiscal identification, VAT refund management), public financial management (commitment ceilings, TSA pilot), and AML/CFT compliance to protect correspondent banking relationships and support financial resiliency. - Persevere with ambitious structural reform agenda, with continued Fund and development partner capacity development support. *Source: IMF staff report — Suriname: Fifth Review Under the Extended Fund Facility (March 6, 2024).* ### 46.7 million (about USD 62 million) of which SDR 19.1 million or about USD 25 million ### 1surea2024002 - 46.7 million (about USD 62 million) of which SDR 19.1 million or about USD 25 million ### Executive summary and Board action - The Executive Board completed the fifth review under the Extended Fund Facility (EFF) arrangement for Suriname and granted a waiver for nonobservance of a performance criterion. - The completion of the review allows the authorities to draw the equivalent of SDR 46.7 million (about USD 62 million), bringing total disbursement to SDR 243.7 million (about USD 323 million). - Suriname’s EFF arrangement was approved by the Executive Board on December 22, 2021. - All quantitative performance criteria for this review were met; the indicative target on social spending was missed. - Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, highlighted that the authorities’ commitment to fiscal discipline and macroeconomic stabilization is paying off and urged perseverance with structural reforms. ### Context: macroeconomic outcomes and risks - Economic outcomes and indicators: - Growth is expected to have reached 2.1 percent in 2023. - Growth is expected to recover to around 3 percent in 2024. - Headline inflation was 29 percent y/y in January; projected to decline to 14 percent y/y by end-2024. - The real effective exchange rate is expected to appreciate by around 12 percent during the course of 2024. - Usable international reserves now stand at close to 6 months of imports. - Policy and reform actions to date: - Eliminated fuel subsidies; phasing out electricity, water, and gas subsidies. - Expanded the VAT base and contained the public wage bill. - Risks: - Near-term downside risks from policy implementation challenges, especially around the election period. - Financial stability risk from potential materialization of banking-sector problems (deposit outflows, systemic instability). - External risk from a deterioration in terms of trade, notably materially higher oil prices. - Medium-term upside: - Potential development of large new oil fields could materially boost growth, employment, export and fiscal revenues, and improve debt dynamics (see Box 1 hypothetical oil scenario). ### Program performance and institutional reforms - Quantitative performance and targets: - End-December 2023 performance criteria on the floor on the primary fiscal balance, the ceiling on the NDA of the central bank (CBvS), the floor on NIR and the ceiling on the central government mineral revenue in local currency were met. - All continuous PCs were met. - The primary fiscal balance target is evaluated on a cash basis and does not capture accumulation of domestic supplier arrears. - The end-December floor on social assistance spending (an indicative target) was missed. - Institutional reform progress and technical assistance: - CBvS, MOFP, and SDMO signed an MOU detailing responsibilities and processes with respect to external debt payments (end-January SB, met). - Ministry of Social Affairs published a report detailing households receiving social assistance benefits (end-January SB, met). - CBvS and MOFP agreed on a governance framework for state-owned banks (end-December SB, not met on time; implemented with delay in February). - Electronic FX trading platform (end-September SB) not met; expected with delay in March 2024 after technical problems resolved. - Legislative amendment to the Foreign Exchange Regulation of 1947 (end-December SB) not met; expected with delay in March. - Enacting the new Procurement Law (end-September SB) not met; expected in March to allow broader consultation. - Review of social protection public expenditure and a time-bound strategic plan (end-December 2023 SB) expected to be finalized with a delay in March. ### Policy discussions — key areas and recommendations - A. Improving Fiscal Sustainability While Supporting the Vulnerable - Near-term priority: preserve fiscal discipline to put public debt on a firmly downward path and build resilience to future shocks. - Specific measures and priorities: - Remove unregistered and chronically absent workers from the public payroll to create fiscal space for meaningful wage increases for productive civil servants. - Gradually phase out electricity subsidies to finance higher social assistance spending and channel more resources toward growth-enhancing investment. - Ensure efficient and effective allocation of social spending. - Stronger commitment controls to prevent accumulation of supplier arrears. - Debt restructuring and arrears: - Noteworthy progress: bilateral agreements with all official creditors completed; debt exchange with private external bondholders finalized. - Domestic debts to the central bank and commercial banks have been restructured. - Priority: promptly clear domestic debt arrears. - Monetary and exchange rate policy: - Monetary policy is supporting disinflation. - Authorities committed to a flexible, market-determined exchange rate, helping support accumulation of international reserves. - Usable international reserves are close to 6 months of imports (see above). - Banking sector and central bank governance: - Recent approval of recapitalization plans of banks with capital shortages and a governance framework for state-owned banks are important steps to address banking sector vulnerabilities. - Prompt finalization of the central bank recapitalization plan will help strengthen operational independence and financial autonomy. - Structural reforms and governance: - Authorities should persevere with ambitious structural reform agenda to strengthen institutions, governance, and data quality. - Continued capacity development support from the Fund and other development partners is recommended. ### Hypothetical oil scenario (summary of projections) - Assumptions and timing: - Final investment decision (FID) for oil extraction on block 58 by end-2024; oil production begins by end-2028. - Peak production of 79 million barrels in 2030 and 2031. - Total project investment of USD 9 billion; pre-investment flows starting at end-2024. - Projected macro impacts (scenario vs baseline): - Growth peaking at about 22.4 percent in 2028 and stabilizing at 5 percent over the long term. - Oil revenue rising to about 25 percent of GDP in 2029; value of oil exports peaking in 2029 with an increase of about 28 percent of GDP relative to baseline. - The value of oil revenues tied to payments of debt in the VRI amounts to an average of about 3 percent of GDP annually in 2028–30. - Gross international reserves (GIR) expected to increase to 148 percent of GDP by 2035. - Public debt projected to decline rapidly to 21 percent of GDP by 2030. - The scenario is highly uncertain and contingent on continued fiscal prudency and the realization of the FID and production timeline. ### Program outlook and staff appraisal (high-level) - Policy outlook: - Continued monetary and fiscal restraint expected to support disinflation and a reduction in public debt to GDP. - Ongoing efforts to strengthen tax administration, increase spending efficiency, phase out untargeted subsidies, increase social assistance spending, improve governance, address corruption vulnerabilities, repay and prevent accumulation of domestic arrears, and bolster financial sector resilience. - Staff assessment: - Program performance described as solid overall, with progress on multiple fronts but with notable delays in some structural benchmarks and a missed social spending indicative target. - Emphasis on maintaining reform momentum given near-term downside risks. *Source: IMF staff report — Suriname: Fifth Review Under the Extended Fund Facility (March 6, 2024).* ### 1. Primary fiscal balance (cash basis) of central government (floor)MetNot MetMetNot MetMet ### 1. Primary fiscal balance (cash basis) of central government (floor)MetNot MetMetNot MetMet ### Program conditionality compliance (selected quantitative targets) - 1. Primary fiscal balance (cash basis) of central government (floor): MetNot MetMetNot MetMet - 2. New natural resource revenue-collateralized debt contracted by or on behalf of the central government and/or SOEs (continuous ceiling): MetMet MetMetMet - 3. New central government guaranteed debt (continuous ceiling): MetMetMetMetMet - 4. Non-accumulation of central government external debt arrears (continuous ceiling): MetNot MetNot MetMetMet - 5. Gross credit to the central government by the central bank (continuous ceiling): MetMetMetMetMet - 6. Net international reserves of the central bank (floor): MetMetMetMetMet - 7. Net domestic assets of the central bank (ceiling): Not Met Not MetMetMetMet - 8. Direct purchases/sales of FX by the central bank and/or central government from/to SOEs and private sector (continuous ceiling): MetMetMet **MetMet - 9. Central government mineral revenue in local currency (ceiling): MetMet - Indicative Target (IT) 1. Social spending of central government (floor): Not MetMetNot MetNot MetNot Met - Note: "** Assessed from the 2nd review. The ceiling was breached by direct sales of US$ 13 million in February 2023 while the program was off-track." ### Key compliance findings and immediate data points - Revenue was "1.4 ppts of GDP lower than budgeted" but offset by lower expenses. - Preliminary data suggests sizeable net accumulation of supplier arrears of SRD 5,023 million during 2023. - The end-December indicative target on social protection spending was missed by SRD 885 million (one-time payment delayed to January 2024). *Source: IMF staff report excerpts.* --- ### Fiscal outlook, targets, and measures - Authorities’ 2024 budget targets a primary central government surplus of 2.7 percent of GDP. - Measures underpinning the target include: - Wage bill: maintain at 6.7 percent of GDP in 2024. The authorities plan to raise real wages after reductions over the past 3 years through enforcement of a ministerial decree to remove unregistered workers and chronically absent civil servants from payrolls. - VAT: standard-rate coverage expanded to cover 60 percent of the consumption basket; a new 5 percent rate to be introduced on water, electricity and cooking gas in June 2024. Over 4,000 companies had registered for VAT at end-December 2023. Delays in new IT system and auditing refunds have caused VAT refund arrears to build; authorities aim to clear VAT refund arrears by end-2024 (new proposed indicative target). Fiscal identification numbers will be made mandatory for all VAT declarations and transactions (new proposed end-June 2024 SB). - Taxes on fuel: fuel subsidies eliminated early 2023; automatic pricing mechanism based on international prices. Specific taxes reimposed in May 2023 generating an estimated 0.8 percent of GDP in revenue in 2023. A formula adjusts the fuel tax inversely with international price changes to achieve revenue neutrality floor. - Electricity subsidies: average electricity tariffs increased by 36 percent in 2023. Schedule of tariff increases adopted for 2024 to reach cost-recovery by end-2024. - Liquified petroleum gas (LPG) subsidies: September 2023 LPG prices increased by around 425 percent, reducing subsidy to 55 percent of the cost. Further price increases in December and quarterly fixed increases until subsidy elimination in September 2025. - Cash transfers: targeted cash transfers value increased by 42 percent in July 2023; retroactive benefits delivered in December 2023; a further bonus paid in January 2024. Authorities developing a time-bound strategic plan with ILO and IDB to improve social benefits (end-Dec 2023 SB, not met, expected implemented with delay in March). Monthly publication of program coverage and transfer values is being done (end-January 2024 SB, met). - Capital spending: increase to 3.5 percent of GDP in 2024, prioritizing growth-enhancing and climate-integrated projects. Strengthening public investment management framework and economic appraisal guidance (end-September 2024 SB, proposed to be removed). ### Contributions to fiscal adjustment (selected figures from staff table) - Annual change of Primary Balance (various columns): 1.6 0.6 0.3 1.1 1.4 0.8 0.8 4.0 4.0 - Adjustment from Policy Changes (various entries): 0.5 3.2 3.9 3.6 3.8 0.7 0.7 8.0 8.9 - Memo: Primary Balance 1.0 1.3 2.7 3.5 --- ### Debt issues and arrears - Gross financing needs (GFN): - Elevated in 2024 but aligned with program limits. - Peaking at 9.0 percent of GDP in 2033 and averaging 7.1 percent of GDP over the medium- to long term. - Projected increase to 8.9 percent of GDP in 2024 due to delayed clearance of domestic debt and supplier arrears. - Public debt: - Stood at 91.8 percent of GDP at end-2023. - Expected to fall below 70 percent by 2029. - Domestic debt arrears: - Legacy debts to the CBvS restructured into a new loan with a grace period of 2 years, a maturity of 27 years and an interest rate of 9 percent. - All advances to the central government repaid to the CBvS in October. - Authorities intend to fully clear remaining domestic debt arrears by end-March 2024 (new proposed SB). - Accounts payable: - Total stock of accounts payable—80 percent of which is considered supplier arrears—rose to 5 percent of GDP at end-2023. - Preliminary data indicates net accumulation of supplier arrears of SRD 5,023 million during 2023. - End-December indicative target on social protection spending missed by SRD 885 million due to delayed one-time payment. ### Institutional measures to prevent further arrears accumulation - Budget Department to set commitment ceilings by line ministry quarterly (new proposed continuous SB). - Resolution to clarify government non-responsibility for contracts agreed by line ministries without prior MoF authorization (new proposed SB for end-April 2024). - Line ministries mandated to report stock of arrears to MoF monthly (new proposed SB for end-June 2024). - New indicative targets established to limit VAT refund arrears. --- ### Monetary policy, inflation, and FX - Monetary policy stance: - CBvS maintaining restrictive policy targeting decline in money supply in inflation-adjusted terms; sterilization via open market operations and central bank certificates. - Private sector credit growth slowed due to systemic liquidity restraints and bank-by-bank loan growth caps. - Reserve money and liquidity: - SRD-reserve money target missed in last two weeks of December 2023; banks held cash for holiday demand and January withdrawals. - Repayment of government arrears will inject local liquidity that must be offset by central bank sterilization. - Reserve money targets should be met on average through the month rather than only at month-end; scope to lengthen maturity of central bank liabilities and ease access to liquidity facilities. - Monetary transmission: - Gradual improvement evidenced by rising rates on new term deposits, but adjustment in market interest rates is slow. - Loan and deposit rates remain negative in ex ante real terms. - Concentration of excess liquidity in a few banks and lack of a working interbank market reduce transmission. - FX market and reserves: - Planned launch of electronic FX trading platform (end-September SB, not met) delayed to March to resolve bugs. - CBvS working on strengthening FX reserves management and FX risk management. - Amendment to the Foreign Exchange Regulation of 1947 (end-December SB, not met) to be submitted in March. - Key FX and reserve figures (selected projections and flows): - FX Cash Flow 2022-24 (in USD millions): Inflow of FX (CBvS and Central Government) 590 694 799 517 2,600, Govt. mineral and other FX revenues 1/ 260 160 265 326 1,010, IFI financing (budget support) 200 190 175 255 90, IMF financing 54 157 251 63 580, Other (incl. project financing) 76 186 108 103 474. - Outflow of FX (CBvS and Central Government) 386 292 555 492 1,725, Debt service 2/ 134 165 310 301 910. - Change in Gross Foreign Reserves of CBvS (+: Increase) 20 21 52 244 256 23 (note: table formatting preserved as in source). --- ### Banking sector, financial stability, and policy recommendations - Banking sector risks being addressed (section heading present in source; details truncated in provided excerpt). - Recent measures affecting banking sector: - Caps to contain nominal SRD private sector credit growth to 20 percent over a one-year period through April 2024; intended to support CBvS ability to mop up liquidity through OMOs. - Leakage risks from the credit cap mitigated by modest demand for loans, regulatory limits on FX credit, and small size of the non-banking sector. - Monetary policy recommendations in the text: - Continue sterilization to meet reserve money program targets. - Consider lengthening maturity of central bank liabilities. - Increase ease of using central bank liquidity facilities to reduce cash hoarding and encourage investment in central bank paper. - Strengthen FX market infrastructure (electronic trading platform) and align FX regulation with the new Central Bank Act. --- *Source: Excerpted content from IMF report on Suriname (selected sections provided in the content unit).* ### 18. Persistent vulnerabilities in the banking system are being addressed. Asset quality is ### 1surea2024002 - 18. Persistent vulnerabilities in the banking system are being addressed. Asset quality is ### Banking system vulnerabilities and asset quality - Asset quality is improving, but NPLs and loan losses remain high. - Capital adequacy for the banking system is 19.1 percent. - Two banks do not meet the regulatory minima. - The banking sector is very liquid: 52.8 percent of assets, but that liquidity is concentrated in the two large systemic banks. - Total market share of two banks with capital shortfalls corresponds to 16.3 percent; these banks are not systemically important. ### Recapitalization, supervision, and corrective measures - Two banks with capital shortages submitted time-bound recapitalization plans to the CBvS following comprehensive asset quality reviews. - The CBvS reviewed and finalized these plans (end-October SB, not met, implemented with delay in December). - The CBvS will set interim common equity tier one and capital adequacy ratio targets for these banks and is defining prompt corrective actions if targets are breached (new proposed SB for end-March 2024). - According to the AQR roadmap, banks with capital shortages should meet regulatory requirements for CET1 and CAR by the end of 2024 and 2026, respectively. - Banks with capital shortages are subject to enhanced supervision and restrictions on dividend payouts and bonus payments. - The CBvS’ framework for assessment of banks’ time-bound recapitalization and restructuring plans requires improvement in the Tier-1 ratio and CAR within CBvS-set periods. ### Resolution, legislative, and governance reforms in the banking sector - Amendments to the Banking and Credit Supervision Act have been enacted to align supervision and resolution with international best practices and to establish a more risk-based and timely supervisory process. - The recently enacted Bank Resolution Bill strengthens CBvS’ powers and tools for early intervention, recovery and resolution of credit institutions. - A new governance framework for government-owned banks was agreed between the CBvS and the MOF to ensure these banks are run on a fully commercial basis (end-December SB, not met, implemented with a delay in February). The framework is planned to be implemented by end-2025 and will support recapitalization of the state-owned bank through reforms in board, senior management, and internal audit systems. - The CBvS’ standing lending and intraday facilities and reserve averaging facility are in place to help banks cover sudden short-term liquidity gaps; there is a lack of interbank market activity. ### Central Bank of Suriname (CBvS) governance and oversight - The CBvS Council has been fully constituted; the Executive Board is expected to be established by end-March (new proposed SB for end-March 2024). - The audit of the CBvS’ FY2022 financial statements has been delayed; the SB to publish the 2022 audit results is proposed to be reset for end-September 2024. - The MoFP and CBvS are developing a plan to recapitalize the central bank to ensure solvency (end-March 2024 SB is proposed to be reset for end-April 2024). - A review of program monetary data for end-December 2023 will be completed by mid-March; the CBvS is implementing recommendations from recent Fund CD on foreign reserves management. ### AML/CFT, anti-corruption, and public procurement reforms - The end-June 2024 SB on amendments to the Anti-Corruption legal framework is proposed to be reformulated into two structural benchmarks for end-June and end-September 2024. Reforms include: - Enactment of amendments to align with Chapter III of the UN Convention against Corruption on criminalization of acts of corruption (SB proposed to be reformulated and established for end-June 2024). - Amend anti-corruption framework to require: (i) income and asset declarations of politically exposed persons; (ii) routine verification of these declarations; (iii) publication of income and asset declarations; and (iv) establishment of proportionate and dissuasive sanctions for non-compliance (proposed to be reformulated and established as end-September 2024 SB). - Suriname ratified CARICOM’s Protocol on Public Procurement in July 2022. A new procurement law was drafted with IDB support and will be enacted in March to centralize publication of tenders and contracts, mandate publication of awarded entities and beneficial owners, names of awarding public officials, and ex-post validation of delivery. - A 2022 CFATF assessment placed Suriname on enhanced follow up and identified several technical compliance deficiencies. In November 2022 a new AML/CFT law was enacted. To comply with FATF requirements Suriname must, inter alia: - Enhance AML/CFT supervision for all financial institutions. - Develop and implement a risk-based supervisory framework for DNFBPs. - Provide adequate human, financial, and technological resources to the Financial Intelligence Unit. - Increase ML/TF related investigations, prosecutions and confiscations. - Amend the International Sanctions Framework to update implementation of UN Security Council Resolutions on Terrorism and Proliferation Financing. - A second national risk assessment is planned to be completed by mid-2024. ### Climate, statistics, and institutional strengthening - The government is establishing an environmental authority with legislative mandate to build safeguards against climate issues and explore climate financing options including sales of carbon credits. - Progress has been made in improving monetary, financial and balance of payments statistics; the statistics office budget has been increased. - Additional efforts are required to improve GDP statistics production and timeliness and to provide more disaggregated CPI data. ### Program conditionality, financing, and debt metrics - Proposed modifications to program conditionality include: - Adjust 2024 QPCs on NIR and NDA to align with the revised macro-framework. - Adjust 2024 ITs on social spending to account for quarterly increases in cash transfer values in line with inflation. - Set a new IT on the stock of VAT refund arrears. - New 2024 SBs to expedite VAT refunds, address domestic debt arrears, strengthen expenditure commitment controls and improve treasury management, fully constitute the CBvS Executive Board and Council in line with the CBvS Act, and improve financial sector resilience. - Reset some SBs to later test dates (CBvS FY 2022 audited financial statements, CBvS recapitalization plan, and amending anti-corruption legal framework for asset-income declarations). - Remove SBs on a fiscal risk report and public investment management framework to prioritize critical reforms. - Suriname’s capacity to repay is assessed as adequate under the program baseline but subject to significant risks. - Fund credit outstanding will peak in 2025 at 42.1 and 12½ percent of usable reserves and GDP, respectively, and will remain elevated through 2030. - Annual debt service to the Fund peaks in 2029 at 4.1 percent of exports of goods and services. - Out of the SDR 46.7 million scheduled for the fifth review, SDR 19.1 million (41 percent) would be made available for budget support. - The authorities offered the same restructuring menu agreed with private bondholders to other private creditors, representing about 9 percent of the stock of arrears to external private creditors at end-2022; these creditors are not deemed holdouts. - Program financing: firm commitments for next 12 months and good prospects thereafter; IFI commitments include IDB budget support of at least USD 150 million in 2024 conditional on IMF program review and its own conditionality, and CDB USD 25 million in budget support in 2024 and 2025. ### Staff appraisal: progress, risks, and priorities - Program performance has been solid; all end-December quantitative performance criteria were met. The IT on social spending was missed, but authorities are expanding coverage and adjusting payments for inflation. - Key reform achievements include eliminating fuel subsidies, phasing out electricity and gas subsidies, removing unregistered and chronically absent employees from public payroll, and broadening the VAT base. - Macroeconomic stabilization: exchange rate stable, inflation on a steady downward trend, public debt has declined, and investor confidence improved (international bond spreads down; S&P upgraded sovereign rating). - Priorities and risks: - Maintain reform momentum to preserve stability and create fiscal space for productive spending. - Address public sector wage competitiveness, remove unregistered and absentee civil servants (8 percent of public workforce remain unregistered), and enforce hiring freeze controls. - Prevent accumulation of supplier arrears by improving coordination between Budget Department, Cash Management Unit, and Treasury; line ministries to report planned expenditures and arrears monthly and seek Treasury authorization for large contracts. - Improve efficiency and reach of the social safety net and protect cash transfer real values from inflation. - Finalize central bank recapitalization plan (expected to be finalized in April). - Strengthen transmission of monetary policy: some banks hold significant excess liquidity; authorities to improve banks’ understanding of CBvS liquidity facilities, expedite liquidity requests, and CBvS plans to extend duration of its liabilities; an electronic FX trading platform should be operational in the coming month. - Operationalize the resolution framework under the Bank Resolution Act via regulations and guidelines. - Continue strengthening AML/CFT framework to support financial sector resiliency and protect correspondent banking relationships. *Source: IMF staff report extract (chapter/section provided).* ### 39. Suriname’s demonstrated commitment to macroeconomic discipline merits Fund ### Suriname’s demonstrated commitment to macroeconomic discipline merits Fund support ### IMF staff position and program status - The authorities are committed at the highest level to restoring macroeconomic and financial stability. - Staff supports the authorities’ request for: - the modification of performance criteria, - the request for granting a waiver for the nonobservance of a performance criterion, - the completion of the fifth review under the EFF arrangement, - the completion of the financing assurances review. ### Real sector and inflation - Real GDP (percent change): 1.2, -16.0, -2.4, 2.4, 2.1, 2.1, 3.0, 3.0, 3.0, 3.0, 3.0, 3.0, 3.0, 3.0 (series as shown). - Consumer prices (period average): 4.4, 34.9, 59.1, 52.4, 52.9, 51.6, 21.1, 20.7, 15.3, 14.8, 9.7, 7.6, 5.0, 5.0 (series as shown). - Consumer prices (end of period): 4.2, 60.7, 60.7, 54.6, 39.3, 32.6, 14.9, 14.2, 11.8, 11.0, 8.0, 6.6, 5.0, 5.0 (series as shown). ### Fiscal outcomes and public debt - Central government overall balance (net lending/borrowing, percent of GDP): -20.2, -12.0, -5.7, -2.7, -1.0, -1.5, -1.1, -1.0, -0.2, -0.2, -0.3, -0.4, -0.3, -0.2 (series as shown). - Primary balance (percent of GDP): -17.3, -8.3, -0.5, 1.0, 1.6, 1.3, 2.7, 2.7, 3.5, 3.5, 3.5, 3.5, 3.5, 3.5 (series as shown). - Non-resource primary balance (percent of GDP): -23.5, -14.8, -12.7, -13.2, -9.1, -9.3, -7.2, -6.7, -8.8, -6.3, -6.4, -6.4, -6.3, -6.3 (series as shown). - Central government debt (percent of GDP): 84.0, 146.4, 115.8, 116.8, 87.1, 91.8, 92.1, 87.9, 85.7, 82.2, 78.3, 74.1, 71.0, 67.3 (series as shown). - Domestic share (percent of GDP): 30.9, 53.6, 40.4, 29.0, 14.0, 20.3, 18.0, 17.2, 15.6, 12.9, 12.4, 13.6, 15.1, 17.1 (series as shown). - External share (percent of GDP): 53.2, 92.8, 75.4, 87.7, 73.2, 71.5, 74.1, 70.7, 70.2, 69.3, 65.9, 60.5, 55.9, 50.2 (series as shown). ### Fiscal revenue and expenditure (selected) - Revenues (percent of GDP): 20.3, 18.2, 26.4, 26.8, 25.7, 24.9, 25.4, 24.8, 25.8, 25.1, 25.1, 25.1, 25.1, 25.1 (series as shown). - Total expenditure (percent of GDP): 40.5, 30.2, 32.1, 29.5, 26.7, 26.4, 26.5, 25.8, 25.8, 25.4, 25.6, 25.6, 25.5, 25.4 (series as shown). - Interest (percent of GDP): 2.9, 3.6, 5.1, 3.7, 2.7, 2.8, 3.8, 3.8, 3.8, 3.7, 3.8, 3.9, 3.8, 3.7 (series as shown). - Of which: mineral resource revenues (percent of GDP): 3.3, 2.7, 4.7, 6.4, 6.3, 6.0, 5.4, 5.3, 5.5, 4.5, 5.5, 5.8, 5.6, 5.3 (series as shown). ### External sector, reserves, and external financing - Current account balance (percent of GDP): -11.2, 8.9, 5.7, 2.1, 2.4, 2.4, 2.3, 2.1, 0.9, 1.8, 1.7, 1.6, 1.4, 1.3 (series as shown). - Gross international reserves (USD millions): 648, 585, 992, 1,195, 1,196, 1,346, 1,464, 1,554, 1,488, 1,580, 1,611, 1,629, 1,627, 1,555 (series as shown). - Usable gross international reserves (USD millions): 505, 129, 512, 865, 962, 1,112, 1,230, 1,320, 1,253, 1,345, 1,377, 1,395, 1,392, 1,321 (series as shown). - Trade balance in goods (USD millions, selected): exports f.o.b. 2,129, 2,344, 2,204, 2,457, 2,515, 2,515, 2,519, 2,506, 2,495, 2,482, 2,480, 2,531, 2,560, 2,593 (series as shown). - Gold and petroleum share of exports (percent of GDP): 47.4, 72.6, 64.7, 61.1, 60.8, 60.8, 54.9, 52.2, 51.0, 48.6, 46.5, 44.4, 42.9, 41.0 (series as shown). ### Monetary and financial indicators - Broad money (percent change): 4.7, 65.0, 45.3, 45.1, 22.8, 19.5, 14.0, 8.1, 15.5, 16.9, 10.4, 9.7, 8.1, 6.4 (series as shown). - Reserve money (percent change): 92.8, 33.6, 48.0, 44.8, 3.4, 4.9, 13.8, 8.8, 19.1, 13.5, 12.2, 10.6, 8.1, 6.9 (series as shown). - Private sector credit (percent change): 0.4, 27.2, 18.5, 65.7, 26.1, 15.2, 13.8, 8.2, 10.1, 12.6, 10.8, 10.2, 8.6, 8.6 (series as shown). ### Key balance of payments aggregates (USD millions) - Current account (USD millions): -448, 260, 176, 769, 0, 899, 239, 858, 0, 79, 75, 74 (series as shown). - Exports of goods and services (USD millions): 2,287, 2,447, 2,300, 2,600, 2,685, 2,686, 2,744, 2,742, 2,760, 2,760, 2,788, 2,880, 2,954, 3,055 (series as shown). - Imports of goods and services (USD millions): 2,413, 1,845, 1,876, 2,342, 2,247, 2,251, 2,321, 2,339, 2,432, 2,439, 2,484, 2,584, 2,691, 2,816 (series as shown). - Financial account (USD millions, selected): FDI 80, 12, 4, -364, 69, 139, -147, 21, -11, -228 (series as shown). ### Program risks and technical notes (as reflected in the data) - External arrears (net) show episodes in the series but are reported as 0.0 in later years in staff projections. - Reserve adequacy measures are presented both in months of imports and as IMF “Assessing Reserve Adequacy” risk-weighted measures; the tables distinguish gross and usable reserves (excluding the PBOC swap and ring-fenced reserves). - Official and parallel market exchange rates are used differently across fiscal, monetary, real, and BoP sectors; the official and parallel market exchange rates converged in June 2021. *Source: Suriname — IMF staff report and accompanying data tables and figures.* ### 1. Gross external financing requirements 557-1198223929120117228713118471156139167 ### 1surea2024002 - 1. Gross external financing requirements 557-1198223929120117228713118471156139167 ### Gross external financing requirements (levels) - 1. Gross external financing requirements: 557-1198223929120117228713118471156139167 - A. Current account deficit: 448-260-176-76-90-89-94-92-39-85-80-79-75-74 - B. Public sector debt amortization: 122146259308166166237212142119117235224261 - (i) Central government: 974615920266661371121179467210223259 - (ii) CBvS: 000000 00 00001 2 - (iii) SOEs: 251001001071001001001002525502500 - C. Other outflows: -13-5-172151242816728150350-10-20 ### Sources of financing (levels) - 2. Sources of financing: 611-4821-77-128-65-1056979121116196191187 - A. Asset sales (net) (Other investment account): 244-168433600 00 00000 0 - B. Foreign direct investment (net): -80-1243-64-69-13-3914-7-21112-28 - C. Portfolio flows (net): 1173547-1900 00 00000 0 - (i) Central government: 12500000 00 00001 2 - (ii) SOEs: 0510000 00 00000 0 - (iii) Other: -9-1647-1900 00 0000-1 -2 - D. Public sector debt financing: 20198557950114521085210387160188214 - (i) Central government: 20198557950114521085210387160188214 - (ii) SOEs: 000000 00 00000 0 - E. Other inflows (net): 57-140-176-114-111-14401325502511 ### Balance and reserve movements (levels) - Balance (2-1) excluding expected accumulation of gross reserves; Gap (-) Surplus (+): 5471-61-316-419 -267 -277-217-52-6345415320 - 3. Expected change in gross reserves of the CBvS; accumulation (-): 25483-416-225-1-152-268-208-23-25-32-18372 - 4. Errors and omissions: -289-1142401180000000000 ### Financing needs and allocation (levels) - 5. Financing needs -(2-1+3+4): -20-402374234214185454267588-13-22-55-91 - Allocation by: - (i) Official financing: -20-40342543083084014266388-13-22-55-92 - a. IMF: -20-4034541581582512516363-13-22-55-92 - Purchases: 00555415815825125163630000 - O/w: for budget support: 0056531031031031030260000 - Repurchases: 204021000 00 0013225592 - b. IFIs: 0002001501501501750250000 - (ii) External arrears (net): 203168 -1-1 00 00000 0 - (iii) Financing from external debt restructuring 1/: 1141111440 120000 1 --- ### Gross external financing requirements (percent of GDP, projections) - 1. Gross external financing requirements: 13.9-4.12.76.67.85.44.16.63.04.01.53.12.63.0 - A. Current account deficit: 11.2-8.9-5.7-2.1-2.4-2.4-2.3-2.1-0.9-1.8-1.7-1.6-1.4-1.3 - B. Public sector debt amortization: 3.05.08.48.54.44.4 5.74.9 3.22.62.44.74.2 4.7 - (i) Central government: 2.41.65.25.61.81.8 3.32.6 2.72.01.44.24.2 4.6 - (ii) CBvS: 0.00.00.00.00.00.0 0.00.0 0.00.00.00.00.0 0.0 - (iii) SOEs: 0.63.43.22.92.72.7 2.42.3 0.60.51.00.50.0 0.0 - C. Other outflows: -0.3-0.20.00.25.73.30.73.90.63.30.70.0-0.2-0.4 ### Sources of financing (percent of GDP, projections) - 2. Sources of financing: 15.2-1.60.7-2.1-3.4-1.7-2.51.61.82.62.43.93.63.3 - A. Asset sales (net) (Other investment account): 6.1-5.81.41.00.00.0 0.00.0 0.00.00.00.00.0 0.0 - B. Foreign direct investment (net): -0.20.0-4.00.1-1.7-1.8-0.3-0.90.3-0.2-0.40.20.0-0.5 - C. Portfolio flows (net): 2.91.21.5-0.50.00.00.00.00.00.00.00.00.00.0 - (i) Central government: 3.10.00.00.00.00.0 0.00.0 0.00.00.00.00.0 0.0 - (ii) SOEs: 0.01.80.00.00.00.0 0.00.0 0.00.00.00.00.0 0.0 - (iii) Other: -0.2-0.51.5-0.50.00.00.00.00.00.00.00.00.00.0 - D. Public sector debt financing: 5.03.41.82.21.33.01.32.51.22.21.83.23.63.8 - (i) Central government: 5.03.41.82.21.33.0 1.32.5 1.22.21.83.23.6 3.8 - (ii) SOEs: 0.00.00.00.00.00.0 0.00.0 0.00.00.00.00.0 0.0 - E. Other inflows (net): 1.4-0.50.0-4.8-3.0-3.0-3.50.00.30.51.00.50.00.0 ### Balance, reserves, and errors (percent of GDP, projections) - Balance (2-1) excluding expected accumulation of gross reserves; Gap (-) Surplus (+): 1.32.4-2.0-8.7-11.2-7.1-6.7-5.0-1.2-1.40.90.81.00.4 - 3. Expected change in gross reserves of the CBvS; accumulation (-): 6.32.9-13.5-6.20.0-4.0-6.5-4.8-0.5-0.5-0.7-0.40.11.3 - 4. Errors and omissions: -7.2-3.97.83.20.00.00.00.00.00.00.00.00.00.0 ### Financing needs and allocation (percent of GDP, projections) - 5. Financing needs -(2-1+3+4): -0.5-1.47.711.611.211.113.29.81.71.9-0.3-0.4-1.0-1.6 - Allocation by: - (i) Official financing: -0.5-1.41.17.08.28.29.79.81.41.9-0.3-0.4-1.0-1.7 - a. IMF: -0.5-1.41.11.54.24.26.15.81.41.4-0.3-0.4-1.0-1.7 - Purchases: 0.00.01.81.54.24.26.15.81.41.40.00.00.00.0 - O/w: for budget support: 0.00.01.81.52.72.72.52.40.00.60.00.00.00.0 - Repurchases: 0.51.40.70.00.00.00.00.00.00.00.30.41.01.7 - b. IFIs: 0.00.00.05.54.04.0 3.64.0 0.00.50.00.00.0 0.0 - (ii) External arrears (net): 6.64.60.00.00.00.00.00.00.00.00.00.0 - (iii) Financing from external debt restructuring 1/: 3.03.0 3.50.0 0.30.00.00.00.0 0.0 *Sources: Fund staff estimates and projections.* --- ### Monetary and Financial Tables (selected highlights) ### Monetary Survey (Millions of SRD; selected items and projections) - Monetary Survey: Net foreign assets: 6,3658,4305,86711,67423,82747,47365,48070,05777,94977,09188,23689,101 - Net international reserves (Held by the CBvS): 2,5153,6854,3457,90520,72736,87643,34446,90352,91051,63656,38058,000 - Net other foreign assets: 3,8504,7451,5223,7693,10010,59622,13623,15425,03925,45531,85631,101 - Net domestic assets: 10,6699,97613,43020,11922,35819,54416,79110,04615,8599,51120,08012,115 - Net claims on the public sector: 3,7263,4624,78711,31010,6824,684607-4,661-265-5,9762,968-3,454 - Of which: on central government: 3,9123,6125,05511,36010,5015,3011,344-3,973543-5,2413,855-2,619 - Credit to the private sector: 7,6187,2787,3109,29911,01918,25523,02221,03426,19924,86528,84528,004 - Other items, net: -675-7641,334-490657-3,395-6,837-6,326-10,076-9,377-11,733-12,435 - Broad money: 17,03018,40319,26931,79346,18567,01682,27180,10393,80886,602108,316101,216 ### Central Bank (CBvS) selected items (levels) - Net foreign assets: 5121,9922,3944,03911,26628,02032,35636,71940,76640,63842,94545,489 - Net international reserves: 2,5153,6854,3457,90520,72736,87643,34446,90352,91051,63656,38058,000 - Gross International Reserves: 3,1404,2964,7908,19920,73037,93446,85249,46063,14160,95970,62870,224 - Net other foreign assets: -398-1,694-1,951-3,866-9,461-8,856-10,988-10,184-12,144-10,997-13,435-12,511 - Liabilities: -625-611-445-294-3-1,058-3,508-2,557-10,231-9,324-14,248-12,224 - Reserve money: 3,6744,9759,59312,81718,96727,47028,39928,81632,31031,34838,49435,575 - Currency in circulation: 1,5501,7572,2633,8614,7926,0847,1697,2158,5427,7149,8018,639 ### Memorandum and ratios (selected) - Velocity (GDP/broad money; end of period): 1.61.61.61.21.31.31.71.71.81.91.81.9 - Broad money (Percent of GDP): 63.361.760.782.176.074.959.057.954.951.654.251.6 - Credit to private sector (Percent of GDP): 28.324.423.024.018.120.416.515.215.314.814.414.3 *Sources: Central Bank of Suriname; and IMF staff calculations and projections.* --- ### Financial Soundness Indicators (In percent; selected series) - Regulatory capital to risk-weighted assets: 9.611.411.814.516.818.418.718.919.1 - Regulatory Tier 1 capital to risk-weighted assets: 9.010.810.513.115.517.316.716.917.2 - Tier 1 capital to total assets (leverage ratio): 4.94.94.35.76.17.47.17.27.3 - NPL to gross loans: 12.010.614.612.812.416.114.314.013.9 - Provisions to total NPLs: 61.660.546.0...39.935.7...... - Return on assets (ROA, annualized): 0.11.02.01.82.71.22.02.22.4 - Return on equity (ROE, annualized): 1.916.734.829.644.816.027.429.933.0 - Liquid assets to total assets: 40.246.851.558.854.352.353.753.252.8 - Liquid assets to short-term liabilities: 82.193.4101.3117.0114.0102.7106.7104.6103.8 - Net open positions in foreign currency to capital 1/: 22.211.520.839.423.221.016.821.719.7 - Foreign currency liabilities to total liabilities: 66.560.969.271.674.175.075.374.674.7 *Source: Central Bank of Suriname; *IMF staff calculations where indicated.* --- ### Program financing and Fund credit (selected items) - Table of reviews and available purchases (selected lines): - Board Approval of the Extended Arrangement: 12/22/2021 39.430.6 - First review and continuous and end-December 2021 performance criteria: 3/15/2022 39.430.6 - Fourth review and continuous and end-September 2023 performance criteria: 12/14/2023 39.430.6 - Ninth and final review and continuous and end-December 2024 performance criteria: 3/14/2025 46.836.3 - Total: 430.7334.1 - Memo: Quota: 128.9 - Program Monitoring—Indicators of Fund Credit Under the EFF (In millions of SDR, selected projections) - Prospective Drawings: 39.4118.2186.946.80.00.00.00.00.00.00.00.00.0 - Percent of quota: 30.691.7145.036.30.00.00.00.00.00.00.00.00.0 - Repurchases: 0.00.00.00.09.816.440.667.971.871.861.955.431.2 - Total Interest / Charges: 2.08.517.928.329.528.727.824.819.214.510.97.85.3 - Outstanding Credit (eop): 78.8197.0383.9430.7420.9404.4363.8295.9224.2152.490.435.13.9 - Gross International Reserves (US$ million): 1,1951,3461,5901,6151,6471,6651,6621,5901,4831,2851,115966892 - Gross International Usable Reserves (US$ million): 8651,1121,3561,3811,4121,4311,4281,3561,2491,051881731658 - Nominal GDP (SRD million): 89,472138,355167,985195,976219,798243,102262,846284,379307,477332,430359,505388,769420,397 --- ### Quantitative Performance Criteria and Indicative Targets (selected) - Quantitative Performance Criteria (millions of Suriname dollars; selected items and outcomes) - 1. Primary fiscal balance (cash basis) of central government (floor) 2/: -2,321 -719 334 3,007 Met 110 159 135 Not Met 221 -110 14 Met 331 -3 161 Met - 2. New natural resource revenue-collateralized debt contracted by or on behalf of the central government and/or SOEs (continuous ceiling) (U.S. dollars): 00Met00Met00Met00Met - 3. New central government guaranteed debt (continuous ceiling): 0 0 Met 0 0 Met 0 0 Met 0 0 Met - 4. Non-accumulation of central government external debt arrears (continuous ceiling): 0 0 Met 0 0 Met 0 0 Met 0 0 Met - Monetary targets (selected) - 5. Gross credit to the central government by the central bank (continuous ceiling) 3/: 10,229 0 0 Met 0 0 Met 0 0 Met 0 0 Met - 6. Net international reserves of the central bank (floor) (millions of U.S. dollar) 2/4/: -154 348 310 319 Met 11 -2 5 Met 103 2 16 Met 114 30 1 9 Not Met - 7. Net domestic assets of the central bank (ceiling) 2/4/: 8,777 -343 161 203 Not Met -6 180 -6 Met -1,134 272 113 Met -1,137 39 -118 Met - Indicative Targets (selected) - Social spending of central government (floor): 604 1,070 922 Not Met 371 269 Not Met - Memo items—Reserve money (selected): 12,817 18,294 18,967 18,629 18,950 19,061 19,180 19,597 18,881 - Continued series (selected later dates and tests show mixed Met/Not Met outcomes across PCs and ITs; net international reserves and net domestic assets frequently evaluated against floors/ceilings with Not Met instances). *Continue to next page as in source.* *Sources: IMF staff calculations and projections; Central Bank of Suriname where indicated.* ### 8. D ### 8. D ### Quantitative Performance Criteria — Fiscal/debt targets (selected rows and outcomes) - Primary fiscal balance (cash basis) of central government (floor) - 1,105 | 1,788 | 657 — Not Met - 1,215 | 2,111 | 1,174 — Not Met - 1,326 | 2,625 | 1,150 — Not Met - 1,147 | 1,571 | 2,020 — Met - 1,338 | 1,693 | 2,184 — Met - 1,529 | 1,826 | 1,891 — Met - 1,721 | 1,790 | 1,784 — Not Met - 1,912 | 1,550 | 2,172 — Met - 2,103 | 1,306 | 2,217 — Met - 2,294 | 637 | 2,148 — Met - 384 | TBD | TBD - 769 | 1,153 - 1,538 | 1,922 | 2,307 | 2,691 | 3,076 | 4,705 | 3,844 | 4,229 | 4,613 - New natural resource revenue-collateralized debt contracted by or on behalf of the central government and/or SOEs (continuous ceiling) (U.S. dollars) - 0 | 0 | Met (multiple periods) - 0 | TBD | TBD - New central government guaranteed debt (continuous ceiling) - 0 | 0 | Met (repeated across periods) - 0 | TBD | TBD - Non-accumulation of central government external debt arrears (continuous ceiling) (millions of U.S. dollars) - 0 | 0 | Met (multiple periods) - 0 | 0.02 — Not Met - 0 | 4 — Not Met - 0 | TBD | TBD - 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 ### Quantitative Performance Criteria — Monetary targets (selected rows and outcomes) - Gross credit to the central government by the central bank (continuous ceiling) - 0 | 0 | Met (multiple periods) - 0 | 0 | -1,042.3 — Met - 0 | 0 | -1,042 — Met - 0 | 0 | -1,661.8 — Met - 0 | 0 | -1,662 — Met - Net international reserves of the central bank (floor) (millions of U.S. dollar) 2/ - 194 | 169 | 204 — Met - 196 | 150 | 179 — Met - 226 | 313 | 332 — Met - -57 | -38 | -31 — Met - -55 | -32 | -26 — Met - -54 | -28 | -28 — Met - -53 | -39 | -21 — Met - -57 | -39 | 5 — Met - -73 | -61 | -7 — Met - -6 | 22 | 152 — Met - -7 | -10 | -14 — Not Met - -25 | -37 | -65 - -29 | -15 | 0 | -62 | -49 | -46 | -39 | -21 | -31 | -52 | -1 | -43 - Net domestic assets of the central bank (ceiling) 2/ - -1,193 | -845 | -111 — Not Met - -1,063 | -425 | 435 — Not Met - -1,332 | -2,548 | -1,080 — Not Met - 3,602 | 3,334 | 2,376 — Met - 4,006 | 3,683 | 3,843 — Not Met - 4,397 | 4,030 | 2,776 — Met - 3,892 | 3,703 | 2,448 — Met - 4,214 | 3,967 | 2,995 — Met - 4,722 | 4,554 | 3,743 — Met - 4,121 | 3,733 | 1,986 — Met - 454 | 494 | 378 — Met - 1,041 | 1,495 | 1,423 - 1,066 | 1,023 | 1,621 | 1,854 | 1,816 | 1,933 | 2,645 | 1,711 | 1,949 | 2,309 | 3,730 | 2,232 - Direct purchases/sales of FX by the central bank and/or central government from/to SOEs and private sector (millions USD) (continuous ceiling) - 0 | 0 | Met (repeated periods) - 00Met00Met00Met (notation appears in table across periods) - 0 | 0 | Met (multiple later periods) - 000 | 000 | 000 (later periods) - Central government mineral revenue in local currency (ceiling) (millions of U.S. dollar) 2/ - 57 — Not Met - 10 | 11 — Not Met - 15 | 14 — Met - 20 | 15 — Met - 25 | 18 — Met - 30 | 20 — Met - 333 — Met - 17 | 20 | 30 | 30 | 30 | 30 | 30 | 30 | 30 | 30 ### Indicative Targets (selected rows) - Social spending of central government (floor) 2/ - 1,112 | 1,315 — Met - 1,483 | 1,717 — Met - 1,981 | 1,058 — Not Met - 1,308 | 1,308 - 1,308 - 2,617 | 2,617 - 4,033 | 3,785 | 5,122 | 5,122 - Stock of VAT refunds outstanding (ceiling) - (values shown in memorandum items sections; specific outcome Met/Not Met not provided in rows above) ### Memorandum items — Reserve money and related aggregates (selected values) - Reserve money (levels shown across periods) - 22,912 | 21,413 | 23,444 | 22,654 | 23,858 | 23,723 - 24,277 | 25,205 | 24,660 | 26,514 | 25,047 | 27,470 - 33,964 | 27,590 | 35,102 | 29,378 | 36,147 | 27,225 - 29,440 | 26,720 | 30,049 | 27,660 | 30,670 | 28,647 - 28,866 | 29,074 | 29,300 | 29,699 | 29,273 - Reserve money (local currency portion only) - 10,260 | 11,098 | 10,413 | 11,359 | 10,566 | 11,450 - 10,718 | 11,507 | 10,871 | 11,632 | 11,024 | 12,263 - 14,249 | 14,064 | 14,642 | 15,602 | 14,998 | 14,438 - 15,320 | 14,208 | 15,573 | 15,111 | 15,831 | 15,621 - 15,978 | 16,841 | 16,298 | 16,582 | 17,059 - Reserve money (constant exchange rates) - 16,765 | 17,587 | 16,918 | 18,084 | 17,071 | 18,424 - 17,224 | 18,583 | 17,377 | 18,710 | 17,529 | 19,414 - 21,461 | 19,448 | 21,896 | 20,914 | 22,294 | 19,457 - 20,589 | 19,167 | 20,857 | 20,001 | 21,130 | 20,708 - 20,761 | 21,837 | 21,085 | 21,373 | 21,962 - NFA (constant exchange rates) - 8,778 | 8,698 | 8,811 | 9,182 | 9,253 | 9,458 - 9,289 | 9,714 | 9,316 | 9,296 | 9,478 | 11,514 - 9,959 | 9,172 | 9,990 | 9,170 | 9,997 | 8,781 - 8,797 | 8,819 | 8,742 | 9,220 | 8,507 | 9,227 - 9,112 | 11,572 | 8,849 | 8,682 | 10,151 - Gross international reserves (millions of U.S. dollar) - 1,097 | 991 | 1,099 | 1,018 | 1,187 | 1,029 - 1,190 | 1,045 | 1,192 | 1,031 | 1,260 | 1,194 - 1,153 | 1,091 | 1,155 | 1,096 | 1,156 | 1,062 - 1,132 | 1,107 | 1,128 | 1,142 | 1,112 | 1,143 - 1,188 | 1,328 | 1,169 | 1,225 | 1,329 - Usable international reserves (millions of U.S. dollar) 5/ - 771 | 667 | 773 | 698 | 862 | 713 - 864 | 716 | 866 | 707 | 934 | 865 - 835 | 853 | 837 | 857 | 838 | 825 - 893 | 873 | 889 | 908 | 873 | 908 - 955 | 1,093 | 936 | 991 | 1,095 - Program exchange rate (all listed periods) - 14.018 | 14.018 | 14.018 | 14.018 | 14.018 | 14.018 *Source: Table 12. Suriname: Quantitative Performance Criteria and Indicative Targets Under the EFF (extracted values and status flags as presented in the source).* ### 2. Stock of VAT refunds outstanding (ceiling) ### 2. Stock of VAT refunds outstanding (ceiling) ### Key statistics and memorandum items - Stock of VAT refunds outstanding (series shown): - 909 - 722 - 443 - 163 - Reserve money (levels shown): - 29,526 - 29,790 - 30,685 - 30,067 - 30,324 - 30,589 - 31,512 - 30,824 - 31,024 - 31,195 - 32,310 - 31,348 - Reserve money (local currency portion only): - 17,202 - 17,356 - 17,217 - 17,524 - 17,671 - 17,826 - 17,684 - 17,950 - 18,039 - 18,100 - 18,112 - 18,142 - Reserve money (constant exchange rates): - 22,110 - 22,268 - 22,018 - 22,439 - 22,591 - 22,750 - 22,495 - 22,878 - 22,971 - 23,036 - 22,933 - 23,082 - NFA (constant exchange rates): - 10,656 - 10,857 - 9,201 - 10,197 - 10,387 - 10,428 - 8,655 - 10,779 - 10,635 - 10,339 - 9,186 - 10,462 - Gross international reserves (millions of U.S. dollar): - 1,365 - 1,380 - 1,329 - 1,400 - 1,414 - 1,417 - 1,358 - 1,509 - 1,499 - 1,478 - 1,463 - 1,554 - Usable international reserves (millions of U.S. dollar) 5/: - 1,131 - 1,146 - 1,096 - 1,166 - 1,179 - 1,183 - 1,124 - 1,275 - 1,265 - 1,244 - 1,229 - 1,320 - Program exchange rate (period values): - 14.018 (repeated for each listed period) Notes: - Source: Authorities and IMF staff calculations and projections. - Footnotes indicated in source: 1/ Targets as defined in the Technical Memorandum of Understanding. 2/ Cumulative flows from begining of the year. 3/ The 2020 figure is a stock as of end-June 2021. 4/ The 2020 figure is a stock as of end-December 2020. 5/ Official reserve assets excluding the PBOC swap and ring-fenced reserves. ### Structural benchmarks (major measures, target dates, status, objectives) - Exchange rate / monetary / safeguards - Establish competitive FX auctions for the CBvS to undertake buying/selling of FX during periods of disorderly market conditions (defined as when the intraday change in the exchange rate versus the U.S. dollar is more than 2 percent) under the agreed rule. - Target date: December 2021 - Status: Met - Objective: Ensure the CBvS has a mechanism to intervene in the FX market. - Establish an electronic trading platform for inter-bank/cambio FX trading. - Target date: June 2022 - Status: Not met - Objective: Create a consolidated FX market. - Publish on the CBvS's external website the FY 2020-2021 audited IFRS financial statements. - Target date: June 2022 - Status: Not met - Objective: Strengthen accountability and transparency, and reduce risk of misreporting. - Develop a time-bound plan for the CBvS’s recapitalization agreed between the CBvS and the government. - Target date: September 2022 - Status: Not met - Objective: Protect the CBvS’s financial autonomy. - Publish on the CBvS's external website the FY 2016 - 2018 audited financial statements. - Target date: December 2021 - Status: Not met; implemented with a delay in February 2022 - Objective: Strengthen accountability and transparency, and reduce risk of misreporting. - National Assembly to pass amendments in line with IMF staff recommendations to clarify and strengthen the mandate and autonomy of CBvS, define accounting/profit distribution/reserves/recapitalization rules, and introduce strict limits on monetary financing (with transitional rules). - Target date: January 2022 - Status: Not met; implemented with a delay in April 2023 - Objective: Strengthen the CBvS’s mandate, autonomy, governance, and accountability and transparency. - Establish an electronic trading platform for inter-bank/cambio FX trading, with expanded scope to cover also bank/cambio trading with gold exporters. - Target date: 17 September 2023 - Status: Not met; implemented with delay in [March] - Objective: Create a consolidated FX market. - Publish on the CBvS's external website the FY 2020-2021 audited IFRS financial statements. - Target date: 21 June 2024 - Status: (listed) Objective: Strengthen accountability and transparency, and reduce risk of misreporting. - Publish on the CBvS's external website the FY 2022 audited IFRS financial statements. - Target date: 21 June 2024 - Status: Proposed to be reset to September 2024 - Objective: Strengthen accountability and transparency, and reduce risk of misreporting. - Develop a time-bound plan for the CBvS’s recapitalization agreed between the CBvS and the government. - Target date: 21 March 2024 - Status: Proposed to be reset to April 2024 - Objective: Protect the CBvS’s financial autonomy. - Submit a legislative amendment to the Foreign Exchange Regulation 1947 to the National Assembly in consultation with Fund staff to rectify any misalignments with the amended Central bank Act 2022. - Target date: 17 December 2023 - Status: Not met - Objective: Enable the CBvS to effectively and independently manage its official reserves and conduct foreign exchange policy. - CBvS's Executive Board are fully constituted in line with the new CBvS act. - Target date: 21 March 2024 - Status: New proposed SB - Objective: Strengthen governance, accountability and transparency of the Central Bank. - Financial sector / crisis preparedness - Undertake full asset quality review for the two largest (by assets size) banks (drawing on the expertise of an internationally reputable specialist firm). - Target date: September 2022 - Status: Met - Objective: Diagnose the largest banks and potential recapitalization needs. - Submit to the State Council the Credit Institutions Resolution Act to increase CBvS’ powers and tools for early intervention, recovery, and resolution of financial institutions. - Target date: January 2022 - Status: Not met; implemented with delay in February 2023 - Objective: Strengthen the CBvS's role in crisis management. - Submit the revised Banking and Credit Supervision Act to the State Council to facilitate risk-based supervision through expanding CBvS' assessment powers. - Target date: January 2022 - Status: Not met; implemented with delay in February 2023 - Objective: Solidify oversight over the financial sector. - Operationalize the Financial Stability Committee, composed of representatives from the MoF and CBvS. - Target date: January 2022 - Status: Not met; implemented with a delay in April 2022 - Objective: Improve coordination on financial sector issues. - Operationalize a Bank Resolution Unit within the CBvS with appropriate governance arrangements, staffing, funding and clear internal guidelines. - Target date: February 2022 - Status: Not met; implemented with a delay in April 2022 - Objective: Strengthen the CBvS's role in crisis management. - Undertake full asset quality review for the remaining banks (drawing on the expertise of an internationally reputable specialist firm). - Target date: December 2022 - Status: Not met; implemented with a delay in May 2023 - Objective: Diagnose the financial sector and potential recapitalization needs. - CBvS and MoF agree on a governance framework for state-owned banks. - Target date: 20 December 2023 - Status: Not met; implemented with delay in February - Objective: Improve governance of state-owned banks. - CBvS to instruct the banks to incorporate the AQR results and review the recapitalization plans submitted by the banks to verify their credibility. - Target date: 19 October 2023 - Status: Not met; implemented with delay in December - Objective: Improve strength of the financial sector. - CBvS, in consultation with IMF, to set common equity tier one and capital adequacy ratio targets for banks and outline corrective measures if CET1/CAR targets are breached. - Target date: 19 March 2024 - Status: New proposed SB - Objective: Improve strength of the financial sector. - Fiscal and debt - Publish a time-bound plan to implement recommendations from technical assistance programs provided by the IMF to streamline treasury functions through the Treasury Single Account (TSA). - Target date: January 2022 - Status: Met - Objective: Improve governance and increase transparency. - Develop terms of reference for hiring specialists to audit outstanding supplier arrears. - Target date: January 2022 - Status: Met - Objective: Improve governance and increase transparency; improve fiscal data reporting. - Publish the financial assessment of EBS that includes its legacy liabilities. - Target date: May 2022 - Status: Met - Objective: Achieve full cost recovery in the electricity sector. - Commence an audit on outstanding supplier arrears. - Target date: April 2022 - Status: Met: audit completed in May 2023 - Objective: Improve governance and increase transparency; improve fiscal data reporting. - Passage of laws needed to implement the VAT by the National Assembly. - Target date: March 2022 - Status: Not Met; implemented with a delay in August 2022 - Objective: Ensure fiscal adjustment in line with program parameters. - Publish a plan to scale back a range of tax exemptions aimed at raising additional revenue of 0.4 percent of GDP. - Target date: March 2022 - Status: Not Met; Implemented in February 2023 budget - Objective: Ensure fiscal adjustment in line with program parameters. - Pass laws and issue relevant decrees if needed to expand the legal mandate of the debt management office (SDMO) to include the whole nonfinancial public sector. - Target date: June 2022 - Status: Not Met; implemented with delay in March 2023 - Objective: Improve debt data reporting. - Create a large taxpayer unit to increase taxpayer compliance. - Target date: June 2022 - Status: Not Met; implemented with a delay in July 2022 - Objective: Improve tax administration. - Review social protection public expenditure and publish a time-bound strategic plan to improve efficiency and effectiveness. - Target date: 8 December 2023 - Status: Not met; implemented with delay in [March] - Objective: Strengthen social spending. - Establish a system to compile and maintain an up-to-date list of public entities (Institutional Table), starting with central government entities. - Target date: June 2023 - Status: Met - Objective: Improve fiscal data reporting. - Enact the amended VAT Act to convert all zero-rated products (except exports and ancillary supplies to exports) to exempt ones and impose the standard 10 percent VAT rate on sales covering at least 60 percent of household consumption. - Target date: July 2023 - Status: Not Met; implemented with a delay in September 2023. - Objective: Ensure fiscal adjustment in line with program parameters. - Publish on the EAS external website quarterly updates of the rationale for each tariff adjustment, the estimated cost of providing electricity, and the remaining size of the subsidy. - Target date: October 2023 - Status: Met - Objective: Improve governance and increase transparency; improve fiscal data reporting. - Operationalize the enacted amendment to the Personnel Act by issuing a state decree to halt payments of salaries for unregistered workers. - Target date: October 2023 - Status: Not Met; implemented with delay in November 2023 - Objective: Strengthen PFM and ensure fiscal adjustment in line with program parameters. - Issue State Decree to provide the Minister of Finance the authority to access all bank accounts held by government entities at commercial banks. - Target date: 10 March 2024 - Status: (listed) Objective: Strengthen PFM. - Publish quarterly budget execution report starting with the end June 2023 budget outturns. - Target date: 10 September 2023 - Status: Met - Objective: Strengthen PFM. - Publish a public investment management manual with general guidelines for economic appraisal of investment projects including climate change and flood risk management considerations. - Target date: 8 September 2024 - Status: Proposed to be removed - Objective: Climate adaptation to contain fiscal risks. - MoFP, SDMO, and CBvS to sign a Memorandum of Understanding detailing respective responsibilities and processes with respect to external debt payments. - Target date: 10 January 2024 - Status: Met - Objective: Improve debt management and reporting, and avoid external debt arrears. - Publish on the Ministry of Social Affairs and Housing’s external website a monthly report detailing program coverage and cash transfers by district. - Target date: 8 January 2024 - Status: Met - Objective: Improve governance and increase transparency. - Publish a report of the largest state-owned enterprises to quantify the principal fiscal risks faced by these enterprises. - Target date: 10 June 2024 - Status: Proposed to be removed - Objective: Strengthen PFM. - Mandate that all tax declarations and transactions use a Fiscal Identification Number. - Target date: 8 June 2024 - Status: New proposed SB - Objective: Improve tax administration. - Implement a pilot Treasury Single Account for a limited set of ministries. - Target date: 10 January 2025 - Status: New proposed SB - Objective: Strengthen PFM. - The Budget Department will set commitment ceilings by line ministry quarterly and enforce them, including through FreeBalance. - Target date: 12 Continuous - Status: New proposed SB - Objective: Strengthen PFM and avoid new expenditure arrears. - Fully repay domestic debt arrears. - Target date: 11 March 2024 - Status: New proposed SB - Objective: Improve debt management and financial stability - Issue a resolution to clarify that government will not be responsible for contracts agreed with line ministries that have no prior authorization from the MoF. - Target date: 12 April 2024 - Status: New proposed SB - Objective: Strengthen PFM and avoid new expenditure arrears. - Mandate all line ministries to report the stock of arrears to the MoF. - Target date: 12 June 2024 - Status: New proposed SB - Objective: Improve debt management and financial stability. - Governance (anti-corruption) - Ratify the United Nations Convention Against Corruption (UNCAC). - Target date: January 2022 - Status: Met - Objective: Reduce vulnerabilities to corruption and promote investment and growth. - Issue an Implementation Act to amend the Anti-Corruption legal framework to ensure criminalization of all corruption acts (in line with UNCAC) and strengthen income and asset declaration provisions. - Target date: June 2022 - Status: Not Met - Objective: Reduce vulnerabilities to corruption and promote investment and growth. - Operationalize the Anti-Corruption Commission and adopt an operational framework, in line with the UNCAC. - Target date: March 2022 - Status: Not Met; implemented with a delay in May 2023 - Objective: Reduce vulnerabilities to corruption and promote investment and growth. - Amend the Anti-Corruption legal framework to reflect adoption of legislation to criminalize UNCAC Chapter III offences and require income and asset declarations, routine verification, publication, and sanctions. - Target date: 22 June 2024 - Status: Proposed to be reformulated and reset as two SBs - Objective: Reduce vulnerabilities to corruption and promote investment and growth. - Amend the Anti-Corruption legal framework to criminalize acts of corruption. - Target date: 22 June 2024 - Status: New proposed SB - Objective: Reduce vulnerabilities to corruption and promote investment and growth. - Amend the Anti-Corruption legal framework to create a requirement for income and asset declarations of politically exposed persons, routine verification, publication, and sanctions. - Target date: 22 September 2024 - Status: New proposed SB - Objective: Reduce vulnerabilities to corruption and promote investment and growth. - Governance (procurement) - Enact a new procurement law to centralize and mandate the publication of all public procurement tenders and contract awards, including beneficial ownership, names of awarding officials, and ex-post validation of delivery. - Target date: 21 September 2023 - Status: Not Met - Objective: Strengthen procurement efficiency. - Governance (AML/CFT) - Amend the AML/CFT law and other relevant laws and regulations to bring them into line with FATF international AML/CFT standards (including treatment of politically-exposed persons and beneficial ownership requirements). - Target date: August 2022 - Status: Not Met; implemented with a delay in November 2022 - Objective: Mitigate the adverse effects of criminal economic activity and promote integrity in financial markets. ### Decomposition of public debt and debt service (selected figures from Table 14) - Total debt (Debt Stock excl. arrears, end-2022): 3,296 (In USD) - Percent Total debt: 100 - Percent GDP: 117 - External debt (end-2022): 2,477 (In USD) - Percent Total debt: 75 - Percent GDP: 88 - Multilateral creditors (end-2022): 953 (In USD) - Percent Total debt: 29 - Percent GDP: 34 - IMF (end-2022): 105 (In USD) - Percent Total debt: 3 - Percent GDP: 4 - World Bank (end-2022): 600 (In USD) - Percent Total debt: 6 - Percent GDP: 0 - IADB (end-2022): 69121 24 (note: as presented in source) - Official creditors (end-2022): 607 (In USD) - Percent Total debt: 18 - Percent GDP: 21 - Bilateral creditors (end-2022): 437 (In USD) - Percent Total debt: 13 - Percent GDP: 15 - Private creditors (end-2022): 918 (In USD) - Percent Total debt: 28 - Percent GDP: 33 - Eurobonds (subset): 818 (In USD) - Percent Total debt: 25 - Percent GDP: 29 - Domestic debt (end-2022): 819 (In USD) - Percent Total debt: 25 - Percent GDP: 29 - Held by Central Bank: 355 (In USD) - Percent Total debt: 11 - Percent GDP: 13 - Held by Local Banks: 165 (In USD) - Percent Total debt: 5 - Percent GDP: 6 - Held by Local Non-Banks: 299 (In USD) - Percent Total debt: 9 - Percent GDP: 11 - o/w supplier arrears: 80 (In USD) - Percent Total debt: 2 - Percent GDP: 3 Notes on assumptions (as in source): - For external debts whose bilateral restructuring agreements were not completed by end-2022, reported debt stocks and debt services are based on original contracts. - For external debt whose bilateral restructuring agreements were completed by end-2022 (France, Netherland, and Switzerland), reported debt stocks and debt services are based on these agreements; arrear repayments are included in projected debt services. - For domestic debts, the restructuring with CBvS is reflected to calculate domestic debt service. - Figures are based on existing debts as of end-2022; debt service from newly contracted debt in 2023 onward are not reflected. ### Debt coverage and disclosures (Annex I summary points) - Commentary: Suriname's public debt under the DSA refers to central government debt including loans to IMF and CBvS. - There is no estimate of local governments' and social security funds' debts but they should be considered minimal if any. - There is no estimate of SOE debts, but the government has passed a law to expand the legal mandate of SDMO to include the whole NFPC and tracks the financial positions of the 10 largest state-owned enterprises. - Coverage and reporting details provided in Annex I include subsector inclusion flags and accounting/valuation notes (cash basis, nominal value, face value, market value) as presented in source tables and footnotes. *Source: Authorities and IMF staff calculations and projections; material as presented in the supplied content.* ### Annex I. Figure 3. Suriname: Public Debt Structure Indicators ### Annex I. Figure 3. Suriname: Public Debt Structure Indicators ### Public debt stock and composition (staff commentary) - Public debt is 116.8 percent of GDP as of 2022. - FX debt explains 100 percent of GDP as of 2022. - External public debt explains 88 percent of GDP as of 2022. - Multilateral debt accounted for 34 percent of GDP in 2022, about 3/4 of which is owed to Inter-American Development Bank (IADB). - Other official debt includes: - bilateral debt: 19 percent of GDP - ECA-backed debt: 6 percent of GDP - Among official creditors: - China: 15 percent of GDP - Paris Club: 3 percent of GDP - India: 1 percent of GDP - Private debt composition: - two eurobonds account for 21 percent of GDP - non-ECA backed securities: 0.4 percent of GDP - External arrears amount to 14 percent of GDP as of end-2022. - Domestic debt is estimated at 29 percent of GDP as of end-2022, composed of: - debt owed to CBvS: 9 percent of GDP - debt to commercial banks: 4 percent of GDP - debt to non-banking institutions: 7 percent of GDP - Domestic arrears, including supplier arrears, as of end-2022 are estimated at 9 percent of GDP. ### Debt instruments, holders, governing law, and maturities (figure notes) - Perimeter notes: - Debt by Currency: perimeter shown is central government. - Public Debt By Holder: perimeter shown is general government. - Public Debt By Governing Law, 2022: perimeter shown is general government. - Debt By Instruments: perimeter shown is general government. - Public Debt By Maturity: perimeter shown is general government. - Residual maturity noted as: 6. years (as shown in figures). ### Medium-term risk analysis (Annex I. Figure 6) - Fanchart and GFN financeability indicators (percent of GDP unless indicated otherwise): - Fanchart width: 162.5 2.4 - Probability of debt not stabilizing (pct): 10.00.1 - Terminal debt level x institutions index: 58.51.3 - Debt fanchart index: ...3.7 - Average GFN in baseline: 5.41.8 - Bank claims on government (pct bank assets): 7.22.3 - Chg. in claims on govt. in stress (pct bank assets): 5.31.8 - GFN financeability index: ...5.9 - Probabilities (2023–2028): - Prob. of missed crisis (if stress not predicted): 54.5 pct. - Prob. of false alarm (if stress predicted): 3.4 pct. - Commentary summary: - Debt Fanchart Module indicates high risk of debt distress driven mainly by the wide width of the fanchart. - Large historical fluctuations in real exchange rate and inflation contributed to wide width; flexible exchange rate regime and program adjustments are expected to mitigate such risks. - Risk from debt non-stabilization is relatively contained due to steady decline in public debt and fiscal adjustment, though terminal debt level in 2028 remains relatively high (i.e., above 70 percent of GDP). - GFN financeability module suggests low risk of debt distress, supported by a declining GFN path in the medium term. - Risk from change in government’s claims is relatively contained because exposure to external private creditors is limited in the medium term; however, fragile domestic banks could add liquidity risks. - GFN could be larger than expected due to recapitalization needs for CBvS highlighted by stress scenarios. - Recapitalization planning should avoid excessive solvency and liquidity risks while ensuring financial health of CBvS and commercial banks. - Modalities of recapitalization impact GFN: - direct equity injections → significant increase of immediate GFN needs - use of securities → reduce immediate GFN needs and spread financing over a longer period - Risks on public debt can be mitigated by significant share of government revenues received in foreign currency and potential future oil revenues. - DSA does not incorporate impact of potential oil production because available information does not provide assurances about economic viability of oil reserves. - Overall medium-term and overall risk are considered high even under the restructuring scenario, given vulnerability to macro-fiscal shocks and potentially higher GFN needs from recapitalization. ### Long-term risk and analysis (Annex I. Figure 7) - Long-term findings: - GFN-to-GDP and public debt-to-GDP diverge quickly if government follows past 10-year path. - Historical 10-year average scenario includes macro-fiscal shocks during 2020–22 and is less informative but underscores need for sufficient primary budget surpluses to achieve declining GFN-to-GDP and public debt-to-GDP. - Staff projection aligns with "Baseline with t+5", suggesting GFN-to-GDP goes below 10 percent from 2029 to 2033 due to repayments to restructured external debts and IFIs including the Fund. - Staff projection shows baseline until 2035 and deviates from mechanical long-term module because it reflects below-the-line transactions (e.g., arrear clearances, debt restructuring). - Demographics and health: - Health cost based on demographic changes could add long-term risks but would not have material impact given declining GFN and public debt under continued fiscal efforts. - Climate risks: - Climate adaptation customized scenario assumes additional investment worth 3 percent of GDP per year. - Climate mitigation customized scenario assumes additional investment worth 5.7 percent of GDP. - Adaptation and mitigation could add fiscal costs and increase GFN-to-GDP in early 2030; continued fiscal efforts and liquidity buffers are important. - Overall conclusion: - It is essential to continue fiscal reforms and keep sufficient liquidity buffer in the medium term to sustain declining GFN and public debt trajectories. ### Restructuring scenario and assumptions (Annex I. Figure 7, A. Public Debt Under Restructuring Scenario) - Program long-term anchors: - Reduce public debt to 60 percent of GDP by 2035. - Reduce GFNs to an average of 9 percent and an upper limit of 12 percent over 2023–35. - A 60 percent debt-to-GDP target is consistent with other recent IMF-supported restructurings in the region. - Specific baseline program assumptions: - Debt restructuring covers external commercial and official bilateral debt, in total amounting to about 50 percent of GDP as of end-2021 (including arrears). - Paris Club agreements: - Agreement reached June 24, 2022; bilateral agreements with all PC creditors completed; final bilateral agreement with Italy in June 2023. - No face value reduction of official debt and ECA-backed commercial debt; amortization paused for 7 years (until 2028) and for 8 years (until 2029) respectively. - 60 percent of PC arrears under bilateral agreement were already paid and remaining 40 percent expected to be paid in 2024. - EXIM India: - Agreement on official credit lines in March 2023; 60 percent of end-2021 arrears already paid and remaining 40 percent expected to be paid in 2024. - Amortization paused for 7 years (until 2028) without face value reduction. - Agreement on loans backed by EXIM India made in May 2023. - China: - Agreement in principle at technical level reached November 2023 on both phases of debt treatment (flow and stock relief), appears in line with PC treatment and program parameters; signed by both parties in March 2024. - Agreements with Paris Club, India and EXIM China do not include a Value Recovery Instrument (VRI). - Paris Club and EXIM China agreements include contingencies for second phase of debt treatment should macro outlook improve (pertaining to oil developments). - External private creditors: - Agreement in principle (AIP) with bondholders in May 2023. - Formal debt exchange with private external bondholders finalized in November 2023, reaching a pre-CAC participation rate over 96 percent and a post-CAC participation rate of 100 percent. - New bonds issued in aggregate principal amount of USD 650 million, with additional USD 10 million to cover fees and expenses of bondholder committee. - Interest payments start from 2024 with: - coupon of 4.95 percent in cash - coupon of 3 percent capitalized until January 2026, when coupon rate increases to 7.95 percent - Bonds amortized in 14 semi-annual installments starting in 2027 equal to 1/14th of the outstanding principal amount. - Bonds include a VRI conditional on new revenue streams from a specific oil development project currently under appraisal; program baseline conservatively does not incorporate additional oil revenue nor debt services on VRI pending FID. - After a “one-off” floor of USD 100 million secured for the government, annual allocation to the VRI is limited to 30 percent of royalty revenues from the oil development project. - Aggregate amount paid under VRI capped at USD 787 million. - Baseline (without VRI) restructuring results in NPV reductions of 19 percent for official and 21 percent for external commercial creditors at a 5 percent discount rate. - Other private creditors are assumed to be treated in line with either bondholders or official bilateral creditors. - CBvS restructuring: - Legacy debts to CBvS restructured into a new loan with a grace period of 2 years and a maturity of 27 years. - All short-term advances to the CG repaid to CBvS in 2023; no outstanding arrears as of October 2023. - Losses from this restructuring will be reflected in CBvS recapitalization plan. - Other domestic restructuring: - As of November 2022, accumulated domestic debt arrears to commercial banks and NBFIs peaked at SRD 3.3 billion. - By February 2024, bilateral restructuring negotiations for all domestic debts were finalized (mainly rollovers and extending maturities), including a large USD loan to a commercial bank that accounted for 50 percent of arrears at end-2023. - Authorities implemented an action plan for clearing domestic arrears. Arrears stood at SRD 2.0 billion at end-2023. - All arrears except technical ones expected to be cleared by March 2024 (new proposed SB). - Supplier and other arrears: - Final audit of legacy supplier arrears as of end-2021 confirmed stock of SRD 4.1 billion. - Authorities cleared (net basis) SRD 1.5 billion in 2022. - Total stock of accounts payable increased to SRD 7.0 billion by end-2023; about 80 percent of this stock is more than 90 days past due and considered supplier arrears. - Authorities committed to net clearance of at least SRD 3.5 billion in 2024 and clearing all other accounts payable by 2025, with PFM reforms and TA support. - Gold loan in arrears evaluated at SRD 0.4 billion at end-2022; to be cleared in 2024 under a renewed agreement. - As of end-2023, VAT arrears more than 90 days past due amounted to SRD 0.6 billion; expected to be cleared in 2024 in line with new indicative target. - Domestic arrear repayment schedule in 2024 (net basis, IMF staff estimates): - Arrear repayments: 6,601 (SRD millions) — 3.9% of GDP - Commercial banks and NBFIs: 2,015 (SRD millions) — 1.2% of GDP - Gold loan: 512 (SRD millions) — 0.3% of GDP - Suppliers: 3,481 (SRD millions) — 2.1% of GDP - VAT refunds: 594 (SRD millions) — 0.4% of GDP ### Financing assumptions, market access, and recapitalization - Financing projections and assumptions: - Financing requirements projected to decline significantly over medium term due to external debt restructuring (face-value and coupon reductions). - Budget support from IDB assumed only until 2024 as a conservative assumption (further support possible but not assumed). - Project financing from multilateral creditors assumed to decline gradually as Suriname switches to market financing of capital expenditures. - Domestic financing expected to be limited in 2024 and 2025 due to gradual market confidence recovery. - Baseline assumes no domestic market access until 2026. - External market access assumed to resume in 2027. - Potential financing gap in 2025 (due to lack of external and domestic market access) is filled by deposit withdrawal. - Government had accumulated deposits of SRD 18.0 billion (13 percent of GDP) by end-2023, providing a large liquidity buffer to cover potential delays in market access. - Bank and CBvS recapitalization assumptions: - Recapitalization of commercial banks is a one-off operation, assumed to add 0.4 percent of GDP to public debt stock in 2024 and 0.2 percent of GDP in 2025. - Based on FY 2020 audit, recapitalization of CBvS is assumed to equal 5.0 percent of GDP in 2024. - Baseline assumes CBvS will need annual injections to ensure capital and reserves grow with GDP. - Associated financing needs for CBvS recapitalization are not incorporated in the DSA due to uncertainty regarding scale and modalities. - Modalities used in recapitalization impact financing needs (e.g., use of securities could reduce immediate GFN needs and spread financing over long horizon). - Recapitalization of the CBvS is assumed to require annual interest payments in local currency equal to 9 percent of the aggregate injection. *Source: IMF staff, Annex I. Figure 3 and accompanying figures and commentary.* ### 3. Public debt is assessed to become sustainable under the restructuring scenario and the ### 1surea2024002 - 3. Public debt is assessed to become sustainable under the restructuring scenario and the ### Public debt sustainability (baseline and program scenario) - Public debt would be placed on a steady downward trend over the medium and long term: - falling below 90 percent in 2024 - below 70 percent in 2029 - below 50 percent in 2035 - Gross financing needs (GFNs): - would decline sharply from 6.8 percent in 2023 to 2.7 percent in 2026 - would rise to 7.1 percent in the medium to long term due to debt service to the IFIs (including the IMF) and repayments of restructured external claims - would remain at sustainable levels over the long term with GFNs declining from 2033 onwards - Conditionality and risks: - If downside risks materialize, fiscal consolidation beyond the program period may be needed to generate additional buffers ### External debt outlook and vulnerabilities (External DSA) - Levels and projections: - External debt is projected to be 114 percent of GDP at end-2023, down from 148 percent at end-2022 - Total external debt is forecasted to decline below 80 percent of GDP at end-2029 - External debt is expected to track public sector external debt, which accounts for more than 50 percent of total external debt, and to decline substantially due to a large fiscal adjustment and public external debt restructuring - Shock analysis and scenarios: - Various economic shocks generally keep external debt below 150 percent of GDP - The historical scenario suggests external debt would be considerably higher than the baseline absent fiscal adjustment, public external debt restructuring, and macroeconomic stability (especially exchange rate stability) - Continued internal and external adjustment is critical to ensure external sustainability - Specific scenario elements presented in the External DSA figures (as labeled in the source): - Interest rate shock: Baseline 81; i-rate shock 90; Historical 100 - Non-Interest Current Account shock: Baseline 81; CA shock 107 - Combined shock: Baseline 81; Combined shock 104 - Real depreciation shock (one-time real depreciation of 30 percent in 2024): Baseline 81; 30% depreciation 88 - Growth shock: Baseline 81; Growth shock 101 - Notes on shocks in figures: - Individual shocks are permanent one-half standard deviation shocks (figure footnote) - Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and current account balance - One-time real depreciation of 30 percent occurs in 2024 (figure footnote) ### Fiscal and program performance highlights (from Letter of Intent and MEFP) - Fiscal targets and outcomes: - CG primary balance target for 2023 was met - Gross financing needs projected at 8.9 percent of GDP in 2024 and averaging 7.1 percent of GDP over the medium term - Public debt stood at 117 percent of GDP at end-2022 and is expected to fall below 70 percent by 2029 - Enacted 2024 budget consistent with an SRD 4,613 million (2.7 percent of GDP) primary balance target under the program - Macroeconomic indicators (selected): - Inflation at 32.6 percent year-on-year in December 2023 - Usable international reserves rose to 6 months of imports at end-December 2023 - Debt restructuring progress: - Agreements with Paris Club creditors, EXIM India and bondholders completed - Agreement-in-principle (AIP) with EXIM China on the two-stage debt treatment finalized - Negotiations with remaining private external creditors ongoing, with agreements in principle expected in the coming months - Restructuring of legacy debts to the central bank finalized - Restructuring of treasuries and loans outstanding to commercial banks completed; work ongoing to clear remaining arrears on treasuries and domestic loans - Social protection and safeguards: - Missed the indicative target on social protection spending for December 2023; corrective measures being taken - Delivered 59,000 cash cards to communities by end-February 2024; published beneficiary and spending information by program and district - Structural and institutional reforms: - New Cash Management Unit established; pilot treasury single account to be implemented; state decree to give Minister of Finance access to all government bank accounts to move toward unified cash management - Memorandum of understanding signed between CBvS, SDMO, and MoFP for external debt service payment procedures - Commitment to a flexible, market-determined exchange rate; electronic FX trading platform to be launched in March (initially for inter-bank trading) - Central bank governance reforms and timebound recapitalization plan being finalized; audits FY2021-22 to be expedited; legislative amendment to Foreign Exchange Regulation 1947 to be submitted incorporating IMF staff comments - Financial sector: Bank Resolution Bill and amendments to the Banking and Credit System Supervision Act enacted in January; governance framework for state-owned banks agreed; interim CET1 and capital adequacy ratio targets to be set for undercapitalized banks in consultation with IMF staff - Anti-corruption: Anti-Corruption Commission operationalized; legal amendments planned (with IMF assistance) to fully criminalize acts of corruption and amend asset and income declaration law; strengthening public procurement and AML/CFT implementation ### Tax, revenue, and expenditure measures - VAT and administration: - VAT amendments enacted to impose the standard 10 percent VAT rate on 60 percent of household consumption - A new 5 percent rate on water, electricity, and cooking gas to be introduced in June 2024 - Over 4,000 companies registered by end-2023 (target was 5,000 companies) - VAT filing compliance around 70 percent of returns filed - Around 60 percent of declared VAT payable has been collected - VAT refund profiling mechanism introduced; commit to monitor and clear outstanding VAT refund arrears by end-2024 (proposed new indicative target) - Deployment of remaining modules of the new IT system by mid-2024 to improve monitoring and collections - Wage bill and payroll control: - Public wage bill to be kept constant in real terms in 2024 at 6.7 percent of GDP - Removing unregistered and chronically absent workers from the public payroll; rolling out a digital personnel data information system at five ministries in February 2024 and coverage of all ministries by end-2024 - Savings to be used to modestly increase real wages of public sector workers in 2024, particularly high-skilled ones - Subsidy reforms and fuel taxation: - Fuel subsidies fully eliminated in March 2023; taxes on fuel reinstated; fuel prices determined by an automatic pricing mechanism based on international prices - Developing a documented methodology to automatically adjust fuel taxes with fuel price movements and inflation, incorporating a floor on the tax - Electricity subsidies being phased out; average electricity bills increased by around 36 percent (text cut-off at that point in source) ### Program financing request and conditionality - Financing request: - Request disbursement under the fifth review of the extended arrangement under the EFF equivalent to SDR 46.7 million (36.3 percent of quota or about USD 62.5 million) upon completion, of which SDR 19.1 million (about USD 25.7 million) would be for budget support - Request completion of the financing assurances review - Program governance: - Request adjustment of quantitative monetary targets under the arrangement and setting of new structural benchmarks - Acknowledgement of data revision that led to misreporting of end-September 2023 primary balance and request for waiver for noncompliance of that PC based on prompt corrective actions and efforts to improve fiscal statistics quality - Government authorizes IMF to publish the letter, its attachments, and the related staff report *Sources: IMF staff estimates; Letter of Intent and Memorandum of Economic and Financial Policies text as provided in the source content.* ### 2023. We have agreed on a plan of tariff hikes that is projected to bring electricity tariffs to cost- ### 1surea2024002 - 2023. We have agreed on a plan of tariff hikes that is projected to bring electricity tariffs to cost- ### Electricity tariffs and transparency - Plan of tariff hikes projected to bring electricity tariffs to cost-recovery by end-2024. - Quarterly publication on the Energie Autoriteit van Suriname external website of: - tariffs for each consumer group, - rationale for the adjustment, - the estimated cost of providing electricity, - the remaining size of the subsidy. ### Strengthening fiscal institutions (tax, treasury, debt, PFM, SOEs) - Treasury management - Implement a pilot treasury single account (TSA) for a limited set of ministries (proposed new structural benchmark for end-January 2025). - Issue a state decree to provide the Minister of Finance authority to access all bank accounts held by government entities at commercial banks (structural benchmark for end-March 2024). - Hire a project manager for TSA implementation; IMF capacity development support. - After 2024 pilot, evaluate before full rollout. - Preventing supplier arrears and cash management - Created a cash management unit within the Treasury at end-2023 to oversee the TSA, liquidity planning, accounts management, working capital management and cashflow management. - Establish verification process for supplier arrears prior to recording in FreeBalance. - Budget Department to set and enforce commitment ceilings by line ministry quarterly (proposed new continuous structural benchmark). - Mandate all line ministries to report the stock of arrears to the Ministry of Finance monthly (proposed new structural benchmark for end-June 2024). - Issue a resolution clarifying government non-responsibility for contracts agreed by line ministries without Ministry of Finance prior authorization (proposed new structural benchmark for end-April 2024). - Other accounts payable (80 percent supplier arrears due >90 days) stood at SRD 7.0 billion in December. - Commit to stop accumulation of supplier arrears and clear the entire stock: one half in 2024 and one half in 2025, by the end of 2025. - Strengthening tax administration - Mandate use of Tax Identification Number (TIN) for all tax declarations and transactions (proposed new structural benchmark for end-June 2024). - Fast-track Tax Identification Number Act by end-April 2024. - Establish dedicated VAT refund account to pay refunds by July 2024. - Develop national audit plan with audit risk selection criteria by April 2024 (with IMF capacity development). - Develop online VAT payment option by end-July 2024. - Debt management and recording - Improve SDMO back-office capacity and coordination between SDMO, MoFP, and CBvS. - MOU signed among these parties defining responsibilities for information provision and escalation procedures (structural benchmark for end-January 2024, met). - Fully staffed SDMO with five employees for back-office functions. - Concluded restructuring of legacy debts to CBvS in December; committed to clearing remaining domestic debt arrears except technical arrears (new proposed end-March SB). - Procurement and PIM - Enact new procurement law to centralize and mandate publication of all public procurement tenders and contract awards (structural benchmark for end-September 2023, not met), to be completed by end-March 2024; publish information on external government website by end-June 2024. - Incorporate procurement module in IFMIS and connect with regional system (CARICOM collaboration). - Publish a PIM manual including climate change and flood risk management considerations, and sectoral guidelines by end-September 2024 (IDB support). - SOE oversight - Collect and publish latest financial information for the largest SOEs. - Initiate quarterly financial monitoring of largest SOEs and produce a fiscal risk report identifying and quantifying risks by end-December 2024 (with IMF capacity development). ### Strengthening the social safety net - Protecting the poor amid subsidy removal and tariff adjustments - Objective: ensure fiscal consolidation burden is not borne by the poor and vulnerable. - Coordinate social beneficiary program increases with electricity tariff adjustments to protect vulnerable households. - Poverty and social spending targets - Extreme poverty: increased from 0.7 in 2016/17 to 2.6 percent of households (2022 Survey of Living Conditions). - Extreme poverty in the interior: 6.3 percent of households. - Largest increases in extreme poverty: Great Paramaribo (1.5 percentage points higher) and rest of coastal regions (3.2 percentage points higher). - Overall poverty fell from 23.4 percent to 21.7 percent. - Increase social spending from 2.2 percent of GDP in 2023 to 3 percent of GDP in 2024. - Expanded social beneficiary program (SRD 1800 per month) to include recipients of the general old age pension; program now has over 113,000 beneficiaries. - July increase in cash transfer value by around 45 percent and expanded coverage. - Issued one-off payments to eligible beneficiaries in January; digital payment cards fast-tracked in December 2023. - Social protection modernization and digitalization - Developing a home-grown strategic plan in line with Multi-Annual Development Plan 2022–26 (end-December SB, not met, expected implemented with delay in March). - Create a single digital beneficiary information system financed by the IDB, expected ready for implementation by end-2025. - Purchased 73,500 government-provided debit cards to shift beneficiaries to digital payments. - Digital rollout targeted at interior where consumption poverty is 20 percentage points above the national average. - Current adult banking access in rural areas: only 21 percent of adults have bank accounts. - Reporting transparency: published monthly report on Ministry of Social Affairs and Housing external website detailing coverage and value of cash transfers (end-January 2024 SB, met). ### Restructuring public debt and fiscal anchors - Debt sustainability targets and financing constraints - Committed to bringing down public debt to 60 percent of GDP by 2035. - Keep gross financing needs below an average of 9 percent of GDP in 2024-35 (and no higher than 12 percent of GDP in any one year). - Program ensures fiscal position fully financed in 2024 and 2025. - Sovereign debt restructuring actions - Followed best practices including inter-creditor equity and comparability of treatment of official bilateral creditors. - Agreement in principle with Paris Club creditors in June 2022; bilateral agreements signed with Paris Club creditors. - Agreement-in-principle with Bondholder’s Committee in May 2023; actual debt exchange finalized in November with pre-CAC participation >96 percent and 100 percent post-CAC participation. - Two outstanding Eurobonds exchanged for one fixed income instrument containing a value recovery instrument (VRI) linked to oil-related revenues. - Presented restructuring offers to China and India in July 2022; finalized agreements with India in 2023. - Agreement in principle with China on two-stage (flow and stock relief) treatment signed in March (AIP comparable with Paris Club). - Completed restructuring of domestic debt (including arrears) to central bank and commercial banks; legacy debts to CBvS restructured and concluded in December. - Government will not provide guarantees to debt contracted by other parties during the program, nor will it or SOEs contract new debt collateralized by natural resource revenues. - Supplier arrears and accounts payable - Other accounts payable (80 percent supplier arrears due >90 days) stood at SRD 7.0 billion in December. - Commit to stop accumulation and clear supplier arrears: one half in 2024 and one half in 2025, by end-2025. ### Reducing inflation, monetary policy, and foreign exchange - Monetary stance and tools - April increase in local currency reserve requirement by 5 percentage points (from 39 to 44 percent). - CBvS guidance to commercial banks to limit nominal credit stock increase to 20 percent over a 12-month period through end-March 2024. - CBvS overperformed its SRD reserve money target on average in recent months. - End-December net domestic assets (NDA) remained well below the ceiling agreed under the program. - Measures have supported CBvS ability to mop up excess system liquidity and put inflation on a downward trend. - Challenges and operational improvements - Transmission from OMO interest rates to market rates remains weak due to uneven liquidity distribution, limited interbank market, and banks’ holding excess reserves. - Updating banks’ reporting templates to accurately report OMOs and liquidity coverage in SRD. - CBvS considering digitalization of liquidity facility processes and exploring rolling over amounts drawn from the standby facility (SLF) twice (making funds available for 15 days). - Revised circular on emergency lending assistance (ELA) framework; ELA access subject to supervisory decision based on viability and solvency. - Foreign exchange policy and market measures - Commitment to a flexible, market-determined exchange rate and refraining from direct FX interventions. - FX market pressures eased; exchange rate slightly appreciated in December after recent stability. - Government to continue limited indirect FX sales to essential goods importers until June 2024 by allowing mineral companies to pay some government revenue obligations in SRD from corresponding FX sales. - Cumulative FX sales through end-December 2023 limited to just over USD 20 million to keep the total central government SRD mineral revenue receipts under the program USD 30 million ceiling. - Transfer all other government net FX receipts at prevailing market exchange rate to CBvS only, except transfers required to meet domestic FX debt service obligations. - Electronic FX trading platform (end-September 2023 SB, not met) expected to be launched in March 2024; initial participation limited to inter-bank transactions. - Surrender requirement for exporters to offer 35 percent of export proceeds for sale to the market remains in force (CBvS Circular 2023-2, September 8, 2023). - Commitment to consult with the Fund before issuing additional FX market regulatory guidance and refrain from interventions inconsistent with the program or Article VIII, Sections 2 and 3. ### Reducing banking sector risks - System indicators and liquidity distribution - Reported level of capital adequacy ratio for the banking system: 19.1 percent as of November 2023. - Liquid assets comprise 52.8 percent of total assets. - Liquidity is unevenly distributed and skewed towards two large systemic banks. - Nonperforming loans slightly declined but remain high. - Bank recapitalization and supervision - Reviewed and approved recapitalization plans for two banks with capital shortages in December (end-October SB, not met, implemented with delay in December). - Banks pledge to reach required levels of common equity tier one (CET1) and capital adequacy ratios (CAR) by the end of 2024 and 2025. - Banks with plans are subject to enhanced supervision and restrictions on dividend payouts and bonus payments. - Proposed new structural benchmark for end-March 2024: set interim CET1 and CAR targets and outline prompt corrective actions if breached. - Any government solvency support to be designed for viable banks under strict conditionality with clear exit strategy. *International Monetary Fund — 1surea2024002 (excerpts provided)* ### 23. We are implementing structural reforms to strengthen supervision of the banking ### 23. We are implementing structural reforms to strengthen supervision of the banking ### Banking supervision and legal reforms - The CBvS and the MOF agreed on a governance framework for state-owned banks to ensure they are run on a fully commercial basis and provide a level playing field with private banks (end-December SB, not met, implemented with a delay in February). - The governance framework will guide enhancement of governance for the state-owned bank with a capital shortfall during the implementation of its recapitalization plan. - Amendments enacted in January: - Amendments to the Banking and Credit Supervision Act enhance risk-based supervision regarding banks’ business strategies, governance, risk management (including provisioning policies and AML/CFT compliance), capital planning, budget forecasting, valuation of collateral, and profit and loss projections. - New Bank Resolution Act aligns legislation with international best practices in supervision and resolution of banks and strengthens CBvS’ powers and tools for early intervention, recovery and resolution of credit institutions. - Guidance for banks on nonperforming loans was prepared and shared with the banking system. ### Other financial sector reforms and AML/CFT - Commitments to improve supervision of: - the insurance and pension sectors, - the capital market, - electronic payment systems, - establish credit reporting, - deposit insurance, - enhance electronic transactions. - CBvS is drafting acts and regulations in these areas. - Revised AML/CFT regulation issued in February 2024. - Given limited resources, a comprehensive plan will be prepared to coordinate and integrate reform initiatives, supported by technical assistance by the IMF and other parties. ### Improving monetary governance: audits, transparency, and reserves oversight - CBvS progress: - Cleared backlog of financial statements audits and continues special audits of program monetary data. - Audited FY 2020 financial statements in line with International Financial Reporting Standards (IFRS) were published in November. - Commit to publish FY 2021 and FY 2022 audited financial statements by end-June 2024 (end-June 2024 SB, proposed to be reset to end-September 2024 for 2022 financial statements). - Audits of program monetary data for each test date since program start have not raised material issues; will continue audits for each future test date. - Continue to co-source specific audits while building internal audit capacity. - Received IMF technical assistance on foreign reserves management and will implement suggestions from the TA report. ### Central Bank Act implementation and governance improvements - The Central Bank Act has: - Strengthened the mandate, autonomy, and decision-making structure of the CBvS while prohibiting monetary financing of the government. - Clarified and strengthened the mandate of the CBvS. - Brought the CBvS’ institutional, financial, and personal autonomy into line with international best practice. - Strengthened governance via collegial management and improved internal oversight. - Increased transparency, accountability, and oversight. - Defined clear requirements on accounting, profit distribution, reserves, and eventual recapitalization of the CBvS. - Implementation steps taken: - Established the Audit Committee and Risk and Compliance Committee in accordance with approved charters. - Approved the Investment Policy. - Developing a regulation for the Supervisory Board and reviewing the Governance Handbook. - Government committed to appoint members to the CBvS council in line with the new law (new proposed end-March 2024 SB). ### Foreign Exchange Regulation review and timeline - Will review the Foreign Exchange Regulation of 1947 and align it with the new Central Bank Act. - Two-pronged strategy: 1. Identified elements not aligned with the Central Bank Act (e.g., determination of exchange rate policy, setting exchange rates for FX transactions, use of different rates). A legislative amendment to the National Assembly was not submitted due to capacity constraints (structural benchmark for end-December 2023, not met). Plan to submit amendments after incorporating IMF comments by end-March 2024. In anticipation, the Foreign Exchange Commission has refrained from using the powers covered by the amendments. 2. Undertake a full review of the Foreign Exchange Regulation of 1947 in consultation with IMF staff and stakeholders; review delayed due to staffing capacity constraints, target to finalize by end of September 2024. ### CBvS recapitalization plan - Working on a plan to recapitalize the CBvS to ensure a strong balance sheet and sufficient resources to execute its mandate. - Plan features: - Based on the FY 2020 published audited financials. - Will include contingencies to inject more equity should finalized FY 2021, FY 2022, and FY 2023 financial audits and/or a realized lower market value of instruments used for recapitalization imply higher needs. - Will include a clear target level of capital with implementation through marketable instruments. - Will outline a binding timeline to complete recapitalization before the end of the program. - Will contain an agreement between the MoFP and the CBvS on procedures to ensure the equity of the CBvS will remain above the minimum level as outlined in the Central Bank Act (end-March structural benchmark proposed to be reset to end-April 2024). ### Tackling corruption, governance, and AML/CFT enhancements - Progress despite capacity constraints: - Ratified the United Nations Convention Against Corruption (UNCAC) and installed the Anti-Corruption Commission (ACC) in May 2023 for a 5-year term. - With IMF capacity development, will enact amendments to the anti-corruption legal framework to align with Chapter III of UNCAC on criminalization of acts of corruption (proposed to be reformulated and established for end-June 2024 SB). - With IMF capacity development, will create an asset and income declaration (AID) scheme aligned with international best practice in the Suriname context: - Require declarations from politically exposed persons (following the FATF definition). - Involve routine declaration verification. - Ensure declarations are made publicly available (except confidential personal/family safety data). - Establish proportionate sanctions for non-compliance (end-June SB, proposed to be reformulated and reset to end-September 2024). - Discussions with providers for an electronic management program for the AID scheme, including potential IDB involvement; will liaise with IMF on system selection. - Ratified CARICOM’s Protocol on Public Procurement in July 2022. - With IDB support, will enact a new procurement law (end-September 2023 SB, not met, expected to be implemented with delay in March) mandating publication of beneficial ownership information of awarded procurement contracts. - Enacted a new AML/CFT law in November 2022 following the November 2022 CFATF assessment. - To fully comply with CFATF requirements, will: (i) implement AML/CFT supervision for all financial institutions (credit union, insurance, and pension fund sectors); (ii) develop and implement a risk-based supervisory framework for DNFBPs; (iii) provide adequate human, financial, and technological resources to the Financial Intelligence Unit (FIU); and (iv) amend the International Sanctions Framework to update legal framework for implementation of UN Security Council Resolutions Against Terrorism and Proliferation Financing. This includes efforts to amend the Money Transfer Offices Supervision Act, Capital Markets Act, and introduce Insurance Supervision Act and Electronic Payment Systems Act. - Committed to initiate a second National Risk Assessment (2020–24); Kroll AML Division contracted to advise and assist. Ministry of Economic Affairs started sectoral assessment regarding Legal Persons including Ultimate Beneficial Ownership (UBOs) and Non-Profit Organizations (NPOs). AML Steering Council (ASC) approved the AML Strategic Plan 2022–25 in November 2022 and a list of High Prioritized Actions for 2023—Q2 2024 in March 2023. Aim to complete the second NRA by mid-2024. - Ministry of Finance and CBvS presenting new draft legislation to the National Assembly to strengthen supervision for the financial sector; Ministry of Justice and Police presented draft legislation for gaming sector supervision. - Sectoral Risk Analysis (SRA) of the banking sector began in April 2023 with OAS technical assistance; SRA report expected in February 2024. SRAs of exchange, money transfer, insurance and pension funds to follow. SRA findings will be reported to CFATF in 2024. - New AML/CFT regulation under discussion and to be issued shortly; further legislation pending in the DNA with technical assistance from IMF and UNODC/WB. ### Extractive sector governance and transparency - Suriname joined the Extractive Industry Transparency Initiative (EITI) in 2017 and published reports for fiscal years 2016 and 2017; reports for fiscal years 2018–20 were published in January 2023. - Government intends to address EITI recommendations, including: - Reforming the mining law to reduce discretion in investor incentives and strengthen the framework for mining titles. - Legally compel extractive companies to disclose their beneficial owners. - Work is underway on these measures. ### Climate considerations in macroeconomic policy - Vulnerability and risks: - Suriname is vulnerable to climate change despite a low carbon footprint and being a carbon negative country; dominant economic activity is in low-lying coastal area. - Future climate-related events could disrupt economic activity and cause substantial long-term damage. - Institutional and policy steps: - Establishing an environmental authority by transforming the National Institute for Environment and Development (NIMOS) with legislative mandate to build safeguards and assess public and private capital projects using the environmental impact assessment framework. - Created a repository, Dondru, for climate change mitigation and adaptation information for national policy and planning. - MoFP and NIMOS collaboration to incorporate climate issues into Suriname’s fiscal framework. - Will publish a public investment management manual with general guidelines for economic appraisal of investment projects including climate change and flood risk management considerations, and sectoral guidelines for key ministries by September 2024. - Climate finance options being explored: - Debt-for-nature swaps (DNS). - Selling carbon credits under the 2015 UN Paris Agreement scheme (Internationally Transferable Mitigation Outcomes—ITMO). - Seeking technical assistance from development partners to assess benefits/challenges and identify conservation projects and potential guarantors; will approach potential buyers for carbon credits (countries and private institutions). ### Statistics and data dissemination - Commitments and actions: - Improve quality and dissemination of economic data, supported by IMF technical assistance. - Increased budget for the General Bureau of Statistics to hire additional qualified staff; council of ministers approved a salary increase for their staff. - Efforts to improve data quality for the Consumer Price Index (CPI), fiscal sector statistics and public debt data. - Will publish detailed monthly CPI data including all subcomponents and data that accurately reports all domestic arrears on a monthly basis. - Will broaden institutional coverage of fiscal statistics to the public sector to better assess fiscal risks. - Will seek technical assistance from international partners to support data and statistics improvements. ### Program monitoring and quantitative targets (high-level) - Economic plan to be monitored through reviews, quantitative and continuous performance criteria, indicative targets, and structural benchmarks. - Quantitative performance criteria and indicative targets are presented in Table 1; standard non-quantitative continuous targets are in para 34 of the TMU; structural benchmarks are in Table 2. Program quantitative targets are defined in the attached TMU. - Selected numeric items from Table 1 (as presented): - Primary fiscal balance (cash basis) of central government (floor): values listed include -2,321; -719; 334; 3,007; 110; 159; 135; 221; -110; 14; 331; -3; 161. - New natural resource revenue-collateralized debt contracted by or on behalf of the central government and/or SOEs (continuous ceiling) (U.S. dollars): 0 (Met). - New central government guaranteed debt (continuous ceiling): 0 (Met). - Non-accumulation of central government external debt arrears (continuous ceiling): 0 (Met). - Gross credit to the central government by the central bank (continuous ceiling) 3/: 10,229; 0 (Met). - Net international reserves of the central bank (floor) (millions of U.S. dollar) 2/4/: -154; 348; 310; 319 (Met); 11; -2; 5 (Met); 103; 2; 16 (Met); 114; 30; 1; 9 (Not Met). - Net domestic assets of the central bank (ceiling) 2/4/: 8,777; -343; 161; 203 (Not Met); -6; 180; -6 (Met); -1,134; 272; 113 (Met); -1,137; 39; -118 (Met). - Direct purchases/sales of FX by the central bank and/or central government from/to SOEs and private sector (millions USD) (continuous ceiling): 0 (Met). - Indicative target: Social spending of central government (floor): 604; 1,070; 922 (Not Met); 371; 269 (Not Met). - Memorandum items (selected): Reserve money: 12,817; 18,294; 18,967; 18,629; 18,950; 19,061; 19,180; 19,597; 18,881. Reserve money (local currency portion only): 7,342; 9,188; 9,271; 9,341; 9,338; 9,494; 9,570; 9,647; 9,289. Reserve money (constant exchange rates): 12,817; 14,838; 15,933; 14,991; 15,893; 15,144; 16,209; 15,297; 15,847. NFA (constant exchange rates): 4,039; 6,403; 6,953; 6,563; 6,920; 7,844; 7,117; 8,000; 7,020. Gross international reserves (millions of U.S. dollar): 585; 968; 992; 979; 986; 1,071; 848; 1,139; 899. Usable international reserves (millions of U.S. dollar) 5/: 129; 501; 512; 513; 505; 604; 518; 673; 566. Program exchange rate: 14.018 (repeated). *Source: IMF staff summary of the Suriname program chapter text provided in the content unit.* ### 1. Primary fiscal balance (cash basis) of central government (floor) 2/ ### 1surea2024002 - 1. Primary fiscal balance (cash basis) of central government (floor) 2/ ### Quantitative performance criteria — Fiscal/debt targets (selected observations) - Periods with reported Primary fiscal balance (cash basis) of central government (floor) and outcome status: - 442; 166; -111 — Not Met - 552; 300; 8 — Not Met - 663; 707; 660 — Not Met - 773; 1,005; 311 — Not Met - 884; 946; 346 — Not Met - 994; 1,218; 345 — Not Met - 1,105; 1,788; 657 — Not Met - 1,215; 2,111; 1,174 — Not Met - 1,326; 2,625; 1,150 — Not Met - 1,147; 1,571; 2,020 — Met - 1,338; 1,693; 2,188 — Met - 1,529; 1,826; 1,862 — Met - 1,721; 1,790; 1,784 — Not Met - 1,912; 1,550; 2,172 — Met - 2,103; 1,306; 2,217 — Met - 2,294; 637; 2,148 — Met - 384; TBD; TBD - 769; 1,153 - 1,538; 1,922; 2,307 - 2,691; 3,076; 4,705 - 3,844; 4,229; 4,613 - New natural resource revenue-collateralized debt contracted by or on behalf of the central government and/or SOEs (continuous ceiling) (U.S. dollars): - Repeated entries: 0; 0 — Met (across periods) - New central government guaranteed debt (continuous ceiling): - Repeated entries: 0; 0 — Met (across periods) - Non-accumulation of central government external debt arrears (continuous ceiling): - Repeated entries: 0; 0 — Met (across many periods) - At one point shown as: 0; 4 — Not Met ### Monetary targets (selected observations) - Gross credit to the central government by the central bank (continuous ceiling): - Repeated entries: 0; 0 — Met (across many periods) - Specific reported outcomes: 0; -1,042.3 — Met; 0; -1,042 — Met; 0; -1,661.8 — Met - Net international reserves of the central bank (floor) (millions of U.S. dollar) 2/: - 118; 49; 13 — Not Met - 122; 104; 92 — Not Met - 156; 150; 156 — Met - 158; 159; 169 — Met - 160; 168; 192 — Met - 192; 169; 193 — Met - 194; 169; 204 — Met - 196; 150; 179 — Met - 226; 313; 332 — Met - -57; -38; -31 — Met - -55; -32; -26 — Met - -54; -28; -28 — Met - -53; -39; -21 — Met - -57; -39; 5 — Met - -73; -61; -7 — Met - -6; 22; 152 — Met - -7; -10; -14 — Not Met - -25; -37; -65 - -29; -15; 0 - -62; -49; -46 - -39; -21; -31 - -52; -1; -43 - Net domestic assets of the central bank (ceiling) 2/: - -1,040; -67; 134 — Not Met - -941; -691; -246 — Not Met - -1,263; -1,188; -591 — Not Met - -1,142; -1,161; -91 — Not Met - -1,016; -1,124; -77 — Not Met - -1,316; -986; -14 — Not Met - -1,193; -845; -111 — Not Met - -1,063; -425; 435 — Not Met - -1,332; -2,548; -1,080 — Not Met - 3,602; 3,334; 2,376 — Met - 4,006; 3,683; 3,843 — Not Met - 4,397; 4,030; 2,776 — Met - 3,892; 3,703; 2,448 — Met - 4,214; 3,967; 2,995 — Met - 4,722; 4,554; 3,743 — Met - 4,121; 3,733; 1,986 — Met - 454; 494; 378 — Met - 1,041; 1,495; 1,423 - 1,066; 1,023; 1,621 - 1,854; 1,816; 1,933 - 2,645; 1,711; 1,949 - 2,309; 3,730; 2,232 - Direct purchases/sales of FX by the central bank and/or central government from/to SOEs and private sector (millions USD) (continuous ceiling): - Repeated entries: 0; 0 — Met (across many periods) ### Indicative targets - Social spending of central government (floor): - 742; 832 — Met - 1,112; 1,315 — Met - 1,483; 1,717 — Met - 1,981; 1,058 — Not Met - 2,971; 1,915 — Not Met - 3,962; 3,077 — Not Met - 2,971; 1,915 — Not Met (repeat) - 3,962; 3,077 — Not Met (repeat) - 1,308; 1,308 - 2,617; 2,617 - 4,033; 3,785 - 5,122; 5,122 - Stock of VAT refunds outstanding (ceiling): - Values presented as ongoing memorandum/indicative target item (no single ceiling outcomes listed in extracted content) - Central government mineral revenue in local currency (ceiling) (millions of U.S. dollar) 2/: - 57 — Not Met - 10; 11 — Not Met - 15; 14 — Met - 20; 15 — Met - 25; 18 — Met - 30; 20 — Met - 333 — Met (single entry) ### Memorandum items (selected numeric snapshots) - Reserve money: - 21,223; 19,110; 21,856; 20,025; 22,390; 20,280 - 22,912; 21,413; 23,444; 22,654; 23,858; 23,723 - 24,277; 25,205; 24,660; 26,514; 25,047; 27,470 - 33,964; 27,590; 35,102; 29,378; 36,147; 27,225 - 29,440; 26,720; 30,049; 27,660; 30,670; 28,647 - 28,866; 29,074; 29,300; 29,699; 29,273 - Reserve money (local currency portion only): - 9,801; 9,516; 9,954; 9,860; 10,107; 10,411 - 10,260; 11,098; 10,413; 11,359; 10,566; 11,450 - 10,718; 11,507; 10,871; 11,632; 11,024; 12,263 - 14,249; 14,064; 14,642; 15,602; 14,998; 14,438 - 15,320; 14,208; 15,573; 15,111; 15,831; 15,621 - 15,978; 16,841; 16,298; 16,582; 17,059 - Reserve money (constant exchange rates): - 16,306; 16,136; 16,459; 16,676; 16,612; 16,879 - 16,765; 17,587; 16,918; 18,084; 17,071; 18,424 - 17,224; 18,583; 17,377; 18,710; 17,529; 19,414 - 21,461; 19,448; 21,896; 20,914; 22,294; 19,457 - 20,589; 19,167; 20,857; 20,001; 21,130; 20,708 - 20,761; 21,837; 21,085; 21,373; 21,962 - NFA (constant exchange rates): - 8,220; 7,022; 8,277; 7,943; 8,739; 8,490 - 8,778; 8,698; 8,811; 9,182; 9,253; 9,458 - 9,289; 9,714; 9,316; 9,296; 9,478; 11,514 - 9,959; 9,172; 9,990; 9,170; 9,997; 8,781 - 8,797; 8,819; 8,742; 9,220; 8,507; 9,227 - 9,112; 11,572; 8,849; 8,682; 10,151 - Gross international reserves (millions of U.S. dollar): - 1,000; 886; 1,004; 951; 1,094; 983 - 1,097; 991; 1,099; 1,018; 1,187; 1,029 - 1,190; 1,045; 1,192; 1,031; 1,260; 1,194 - 1,153; 1,091; 1,155; 1,096; 1,156; 1,062 - 1,132; 1,107; 1,128; 1,142; 1,112; 1,143 - 1,188; 1,328; 1,169; 1,225; 1,329 - Usable international reserves (millions of U.S. dollar) 5/: - 674; 558; 678; 620; 768; 656 - 771; 667; 773; 698; 862; 713 - 864; 716; 866; 707; 934; 865 - 835; 853; 837; 857; 838; 825 - 893; 873; 889; 908; 873; 908 - 955; 1,093; 936; 991; 1,095 - Program exchange rate: - 14.018 (repeated across reported periods) *Source: 1surea2024002 - 1. Primary fiscal balance (cash basis) of central government (floor) 2/ (IMF table extract).* ### 2. Stock of VAT refunds outstanding (ceiling) ### 1surea2024002 - 2. Stock of VAT refunds outstanding (ceiling) ### Stock of VAT refunds outstanding (ceiling) - Reported stock figures: 909; 722; 443; 163. ### Memorandum items (reported values) - Reserve money: 29,526; 29,790; 30,685; 30,067; 30,324; 30,589; 31,512; 30,824; 31,024; 31,195; 32,310; 31,348 - Reserve money (local currency portion only): 17,202; 17,356; 17,217; 17,524; 17,671; 17,826; 17,684; 17,950; 18,039; 18,100; 18,112; 18,142 - Reserve money (constant exchange rates): 22,110; 22,268; 22,018; 22,439; 22,591; 22,750; 22,495; 22,878; 22,971; 23,036; 22,933; 23,082 - NFA (constant exchange rates): 10,656; 10,857; 9,201; 10,197; 10,387; 10,428; 8,655; 10,779; 10,635; 10,339; 9,186; 10,462 - Gross international reserves (millions of U.S. dollar): 1,365; 1,380; 1,329; 1,400; 1,414; 1,417; 1,358; 1,509; 1,499; 1,478; 1,463; 1,554 - Usable international reserves (millions of U.S. dollar) 5/: 1,131; 1,146; 1,096; 1,166; 1,179; 1,183; 1,124; 1,275; 1,265; 1,244; 1,229; 1,320 - Program exchange rate: 14.018; 14.018; 14.018; 14.018; 14.018; 14.018; 14.018; 14.018; 14.018; 14.018; 14.018; 14.018 ### Notes on memorandum items and definitions - Source: Authorities and IMF staff calculations and projections. - Footnotes referenced: 1/ Targets as defined in the Technical Memorandum of Understanding. 2/ Cumulative flows from begining of the year. 3/ The 2020 figure is a stock as of end-June 2021. 4/ The 2020 figure is a stock as of end-December 2020. 5/ Official reserve assets excluding the PBOC swap and ring-fenced reserves. ### Structural benchmarks under the EFF — summary of status and objectives - Exchange rate / monetary / safeguards - Establish competitive FX auctions for the CBvS to buy/sell FX when intraday exchange rate change vs. the U.S. dollar is more than 2 percent: Target date December 2021 — Status: Met — Objective: Ensure the CBvS has a mechanism to intervene in the FX market. - Establish an electronic trading platform for inter-bank/cambio FX trading: Target date June 2022 — Status: Not met — Objective: Create a consolidated FX market. - Publish FY 2020-2021 audited IFRS financial statements on CBvS external website: Target date June 2022 — Status: Not met — Objective: Strengthen accountability and transparency, and reduce risk of misreporting. - Develop a time-bound plan for the CBvS’s recapitalization agreed between the CBvS and the government: Target date September 2022 — Status: Not met — Objective: Protect the CBvS’s financial autonomy. - Publish FY 2016 - 2018 audited financial statements on CBvS external website: Target date December 2021 — Status: Not met; implemented with a delay in February — Objective: Strengthen accountability and transparency, and reduce risk of misreporting. - National Assembly to pass amendments aligning with IMF staff recommendations (clarify/strengthen mandate, autonomy, transparency, accounting, profit distribution, reserves, recapitalization, limits on monetary financing): Target date January 2022 — Status: Not met; implemented with a delay in April 2023 — Objective: Strengthen CBvS’s mandate, autonomy, governance, and accountability and transparency. - Establish an electronic trading platform for inter-bank/cambio FX trading with expanded scope to cover bank/cambio trading with gold exporters: Target date 20September 2023 — Status: Not met; implemented with delay in [March] — Objective: Create a consolidated FX market. - Publish FY 2020-2021 audited IFRS financial statements on CBvS external website: Target date 25June 2024 — Status: (listed) — Objective: Strengthen accountability and transparency, and reduce risk of misreporting. - Publish FY 2022 audited IFRS financial statements on CBvS external website: Target date 25June 2024 — Status: Proposed to be reset to September 2024 — Objective: Strengthen accountability and transparency, and reduce risk of misreporting. - Develop time-bound CBvS recapitalization plan agreed between CBvS and government: Target date 28March 2024 — Status: Proposed to be reset to April 2024 — Objective: Protect the CBvS’s financial autonomy. - Submit legislative amendment to Foreign Exchange Regulation 1947 to National Assembly in consultation with Fund staff to rectify misalignments with amended Central Bank Act 2022: Target date 27December 2023 — Status: Not met — Objective: Enable CBvS to effectively and independently manage official reserves and conduct foreign exchange policy. - CBvS's Executive Board fully constituted in line with new CBvS act: Target date 26March 2024 — Status: New proposed SB — Objective: Strengthen governance, accountability and transparency of the Central Bank. - Financial sector / crisis preparedness - Undertake full asset quality review for the two largest banks (internationally reputable specialist firm): Target date September 2022 — Status: Met — Objective: Diagnose the largest banks and potential recapitalization needs. - Submit Credit Institutions Resolution Act to State Council to increase CBvS powers for early intervention, recovery, and resolution: Target date January 2022 — Status: Not met; 'Implemented with delay in February 2023 — Objective: Strengthen the CBvS's role in crisis management. - Submit revised Banking and Credit Supervision Act to State Council to facilitate risk-based supervision: Target date January 2022 — Status: Not met; 'Implemented with delay in February 2023 — Objective: Solidify oversight over the financial sector. - Operationalize the Financial Stability Committee (MoF and CBvS representatives): Target date January 2022 — Status: Not met; 'Implemented with a delay in April 2022 — Objective: Improve coordination on financial sector issues. - Operationalize a Bank Resolution Unit within CBvS with governance, staffing, funding, and internal guidelines: Target date February 2022 — Status: Not met; 'Implemented with a delay in April 2022 — Objective: Strengthen the CBvS's role in crisis management. - Undertake full asset quality review for remaining banks: Target date December 2022 — Status: Not met; 'Implemented with a delay in May 2023 — Objective: Diagnose the financial sector and potential recapitalization needs. - CBvS and MoF agree governance framework for state-owned banks: Target date 23December 2023 — Status: Not met; implemented with delay in [February] — Objective: Improve governance of state-owned banks. - CBvS to instruct banks to incorporate AQR results and review recapitalization plans submitted by banks: Target date 22October 2023 — Status: Not met; implemented with delay in December — Objective: Improve strength of the financial sector. - CBvS, in consultation with IMF, to set common equity tier one and capital adequacy ratio targets for banks and outline corrective measures if targets breached: Target date 22March 2024 — Status: New proposed SB — Objective: Improve strength of the financial sector. - Fiscal and Debt - Publish time-bound plan to implement IMF technical assistance recommendations to streamline treasury functions through the Treasury Single Account (TSA): Target date January 2022 — Status: Met — Objective: Improve governance and increase transparency. - Develop terms of reference for hiring specialists to audit outstanding supplier arrears (with international partners): Target date January 2022 — Status: Met — Objective: Improve governance and increase transparency; improve fiscal data reporting. - Publish financial assessment of EBS including legacy liabilities: Target date May 2022 — Status: Met — Objective: Achieve full cost recovery in the electricity sector. - Commence an audit on outstanding supplier arrears: Target date April 2022 — Status: Met: audit completed in May 2023 — Objective: Improve governance and increase transparency; improve fiscal data reporting. - Passage of laws needed to implement the VAT by the National Assembly: Target date March 2022 — Status: Not Met; implemented with a delay in August 2022 — Objective: Ensure fiscal adjustment in line with program parameters. - Publish plan to scale back tax exemptions to raise additional revenue of 0.4 percent of GDP: Target date March 2022 — Status: Not Met; Implemented in February 2023 budget — Objective: Ensure fiscal adjustment in line with program parameters. - Pass laws and issue decrees to expand legal mandate of debt management office (SDMO) to include whole nonfinancial public sector: Target date June 2022 — Status: Not Met; implemented with delay in March 2023 — Objective: Improve debt data reporting. - Create a large taxpayer unit: Target date June 2022 — Status: Not Met; implemented with a delay in July 2022 — Objective: Improve tax administration. - Review social protection public expenditure and publish time-bound strategic plan: Target date 12December 2023 — Status: Not met — Objective: Strengthen social spending. - Establish system to compile and maintain central up-to-date list of public entities (Institutional Table): Target date June 2023 — Status: Met — Objective: Improve fiscal data reporting. - Enact amended VAT Act to convert zero-rated products (except exports) to exempt and impose 10 percent VAT on sales covering at least 60 percent of household consumption: Target date 7July 2023 — Status: Not Met; implemented with a delay in September 2023 — Objective: Ensure fiscal adjustment in line with program parameters. - Publish on EAS external website quarterly updates of rationale for tariff adjustments, estimated cost of providing electricity, and remaining size of subsidy: Target date 7October 2023 — Status: Met — Objective: Improve governance and increase transparency; improve fiscal data reporting. - Operationalize enacted amendment to the Personnel Act by issuing a state decree to halt payments of salaries for unregistered workers: Target date 7October 2023 — Status: Not Met; implemented with delay in November 2023 — Objective: Strengthen PFM and ensure fiscal adjustment in line with program parameters. - Issue State Decree to provide Minister of Finance authority to access all bank accounts held by government entities at commercial banks: Target date 8March 2024 — Status: (listed) — Objective: Strengthen PFM. - Publish quarterly budget execution report starting with end June 2023 budget outturns: Target date 8September 2023 — Status: Met — Objective: Strengthen PFM. - Publish a public investment management manual with guidelines including climate change and flood risk management: Target date 8September 2024 — Status: Proposed to be removed — Objective: Climate adaptation to contain fiscal risks. - MoFP, SDMO, and CBvS to sign MoU detailing responsibilities and processes with respect to external debt payments: Target date 8January 2024 — Status: Met — Objective: Improve debt management and reporting, and avoid external debt arrears. - Publish monthly report on Ministry of Social Affairs and Housing website detailing coverage and value of cash transfers by district: Target date 14January 2024 — Status: Met — Objective: Improve governance and increase transparency. - Publish report of the largest state-owned enterprises quantifying principal fiscal risks: Target date 8June 2024 — Status: Proposed to be removed — Objective: Strengthen PFM. - Mandate all tax declarations and transactions use a Fiscal Identification Number: Target date 8June 2024 — Status: New proposed SB — Objective: Improve tax administration. - Implement a pilot Treasury Single Account for a limited set of ministries: Target date 8January 2025 — Status: New proposed SB — Objective: Strengthen PFM. - Budget Department to set commitment ceilings by line ministry quarterly and enforce them, including through FreeBalance: Target date 8Continuous — Status: New proposed SB — Objective: Strengthen PFM and avoid new expenditure arrears. - Fully repay domestic debt arrears: Target date March 2024 — Status: New proposed SB — Objective: Improve debt management and financial stability. - Issue resolution clarifying government will not be responsible for contracts agreed with line ministries without prior MoF authorization: Target date April 2024 — Status: New proposed SB — Objective: Strengthen PFM and avoid new expenditure arrears. - Mandate line ministries to report stock of arrears to MoF monthly: Target date June 2024 — Status: New proposed SB — Objective: Improve debt management and financial stability. - Governance (anti-corruption) - Ratify the United Nations Convention Against Corruption (UNCAC): Target date January 2022 — Status: Met — Objective: Reduce vulnerabilities to corruption and promote investment and growth. - Issue Implementation Act to amend Anti-Corruption framework to ensure criminalization of all corruption acts and strengthen income and asset declaration provisions: Target date June 2022 — Status: Not Met — Objective: Reduce vulnerabilities to corruption and promote investment and growth. - Operationalize the Anti-Corruption Commission and adopt operational framework in line with UNCAC: Target date March 2022 — Status: Not Met; implemented with a delay in May 2023 — Objective: Reduce vulnerabilities to corruption and promote investment and growth. - Amend Anti-Corruption legal framework per detailed requirements: Target date 29June 2024 — Status: Proposed to be reformulated and reset as two SBs — Objective: Reduce vulnerabilities to corruption and promote investment and growth. - New proposed SBs: Amend Anti-Corruption legal framework to criminalize acts of corruption (29June 2024) and to create requirements for income and asset declarations of politically exposed persons with verification, publication, and sanctions (29September 2024). - Governance (procurement) - Enact a new procurement law to centralize and mandate publication of all public procurement tenders and contract awards including beneficial owners and awarding officials: Target date 29September 2023 — Status: Not Met — Objective: Strengthen procurement efficiency. - Governance (AML/CFT) - Amend AML/CFT law and other laws to align with FATF international AML/CFT standards (including treatment of politically-exposed persons and beneficial ownership requirements): Target date 29August 2022 — Status: Not Met; implemented with a delay in November 2022 — Objective: Mitigate adverse effects of criminal economic activity and promote integrity in financial markets. ### Attachment II. Technical Memorandum of Understanding — selected program accounting rules and definitions - Program accounting exchange rates and valuation rules: - U.S. dollar denominated components of CBvS balance sheet will be valued at official exchange rate of the Surinamese dollar to the U.S. dollar of 14.0180 set by the CBvS as of December 31, 2020. - Cross-rates as of December 31, 2020: Euro = 1.2281 U.S. dollars; Pound Sterling = 1.3600 U.S. dollars; Chinese Yuan = 0.1532 U.S. dollars; SDR = 1.4403 U.S. dollars. - Official gold holdings valued at 1,892.0 U.S. dollars per fine ounce. - Definitions specified for program purposes: - Definition of central government (CG): set of institutions and government units currently covered under the state budget; newly formed public sector entities will be examined and included if they meet Government Finance Statistics Manual 2014 definition. - Definition of State-Owned Enterprises (SOE): corporations where i) the CG is a shareholder or ii) are controlled by the CG directly or indirectly through other government-controlled entities; control can be established through legislation or equity participation. - Definition of debt: debt understood as a current (not contingent) liability created under a contractual arrangement through provision of value (assets or services) requiring obligor to make future payments in assets or services to discharge principal and/or interest. Primary forms: - i. loans: advances of money including deposits, bonds, debentures, commercial loans, buyers’ credits, repurchase agreements, and official swap arrangements. - ii. suppliers’ credits: contracts where supplier permits deferred payments after delivery of goods or services. - iii. leases: arrangements where property is provided for use for specified periods; debt is the PV (at inception of the lease) of all lease payments expected during the agreement excluding payments covering operation, repair, or maintenance. *Source: Authorities and IMF staff calculations and projections.* ### 6. Under the definition of debt set out in previous paragraph, arrears, penalties, and ### 1surea2024002 - 6. Under the definition of debt set out in previous paragraph, arrears, penalties, and ### A. Definition of Debt and Contracting - Arrears, penalties, and judicially awarded damages arising from the failure to make payment under a contractual obligation that constitutes debt are debt. - Failure to make payment on an obligation that is not considered debt under this definition (e.g., payment on delivery) will not give rise to debt. - For program purposes, a debt is considered contracted when all conditions for its entrance into effect have been met, including approval by the National Assembly. - Contracting of credit lines with no predetermined disbursement schedules or with multiple disbursements will be also considered as contracting of debt. - Fiscal year: calendar year, starting on January 1 and ending on December 31. ### B. Primary Fiscal Balance (Cash Basis) of Central Government (Floor) - Definition: The primary fiscal balance (cash basis) of the CG is calculated as the cumulative CG interest payments minus total net borrowing requirements from the beginning of the year. - Net borrowing requirements (NBR) are measured at official (current) exchange rates and are defined as the sum of: - i. The change in net CBvS credit to the CG, including changes in the government deposit position at the CBvS and excludes any accrued interest; - ii. The change in net credit from depository corporations, which includes changes in CG deposits and the net issuance of treasury bills, lending, and other CG securities held by commercial banks and excludes any accrued interest; - iii. The change in net non-bank credit to the CG, which includes net issuance of Treasury bills and other CG securities to non-banks, and other CG claims and debts vis-à-vis nonbank institutions and excludes any accrued interest; - iv. New external loan disbursements net of external loan amortization including repayment of external arrears; - v. Net sale of government assets (financial including privatization receipts). - CG Interest payments: defined on a cash basis as interest paid on CG domestic and external debt obligations. - Mineral revenue: government’s tax and non-tax proceeds from state-oil company Staatsolie Suriname and from gold companies; includes corporate tax, wage tax (including old age fund contributions), dividend tax, indirect taxes, dividends, royalties and others; royalties from small scale gold mining are included. - QPC for fiscal balance calculated based on projected official exchange rate. Reporting (and adjustments) made using current official exchange rate. - Reporting: Fiscal data will be provided to the Fund with a lag of no more than six weeks after the end of the month. - Adjusters to the floor on cumulative primary cash balance of the CG: - 1. downward (upward) to the full extent that cumulative project loans are more (less) than project loans given in Table 2. - 2. upward to the extent of any rise in mineral revenue above the cumulative baseline projections given in Table 1. ### C. New Natural Resource Revenue-Collateralized Debt (Continuous Ceiling) - Definition: Ceiling applies to new natural resource revenue-collateralized debt (domestic and external) contracted on a gross basis by or on behalf of the CG and/or SOEs as a continuous performance criterion. - Natural resource revenue-collateralized debt: debt involving creating a security interest, charge or lien over any natural resource, natural resource receivables, or proceeds from sale/lease of natural resources. - Collection accounts where no charge or lien is created are excluded. - External debt contracted due to external debt restructuring (to be agreed between authorities and creditors) is excluded. - Ceiling also applies to prefinancing arrangements (debt contracted against future sales of natural resources). - Official exchange rate applies to all non-SRD denominated debt. - Reporting: Data provided to the IMF on a continuous basis, including any new debt contracts to verify absence of security interest, charge, or lien over natural resources. ### D. New Central Government Guaranteed Debt (Continuous Ceiling) - Definition: Ceiling applies to amount of guarantees issued by the CG for debt contracted by any agency or entity outside the CG. - Guarantee defined as any explicit legal or contractual obligation of CG to service a debt owed by a debtor outside the CG (payments in cash or in kind). - Official exchange rate applies to all non-SRD denominated debt. - Reporting: Data provided to the IMF on a continuous basis. ### E. Non-Accumulation of Central Government External Debt Arrears (Continuous Ceiling) - Definition: Non-accumulation of arrears by the CG on contractual debt obligations owed to non-resident creditors is a continuous performance criterion. - External payments arrears: external debt obligations of the CG not paid within 30 days after the contractual due date, or within the contractual grace period, whichever is longer. - Exclusion: Arrears resulting from nonpayment of debt service for which a rescheduling or restructuring agreement is being sought, based on good faith negotiations. - Stock of external arrears calculated based on schedule of external payment obligations reported by the Ministry of Finance and Planning (MoFP); data reconciled with relevant creditors and adjustments incorporated as they occur. - Reporting: Data provided to the IMF on a continuous basis. ### F. Gross Credit to Central Government by the CBvS (Continuous Ceiling) - Definition: Ceiling on the change in gross credit provided to the CG by CBvS (including any provision of overdrafts) is a continuous performance criterion and will be measured from end-June 2021 for 2021 and from beginning of the year for 2022. - Exclusions: Coins and notes issued by the MoFP and claims on IMF related to the valuation of IMF account no 1 and 2. - Stock of gross credit valued at fair value and at program exchange rates. - Changes in stock of the COVID-19 Fund approved by Parliament in 2020 constitute gross credit from the CBvS to the CG. - Rolling over CG principal and interest payments due to the CBvS does not constitute gross credit. - Reporting: Data provided to the IMF on a continuous basis. ### G. Net International Reserves (NIR) of the CBvS (Floor) - Definitions: - Floor applies to cumulative flows from the beginning of the year (end-December level of NIR of the previous year). - NIR defined as U.S. dollar value of the difference between reserve assets and reserve liabilities. - Reserve assets include: (i) foreign exchange (foreign currency cash, deposits with foreign correspondents, holdings of foreign securities), (ii) monetary gold, (iii) IMF reserve position, and (iv) SDR holdings. - Exclusions from reserve assets: assets pledged, collateralized, or otherwise encumbered; CBvS claims on resident banks and nonbanks; claims in foreign exchange arising from derivatives in foreign currencies vis-à-vis domestic currency; precious metals other than monetary gold; assets in nonconvertible currencies; illiquid swaps; any reserve assets not readily available for intervention in the foreign exchange market. - Reserve liabilities defined as: - (i) all short-term foreign liabilities of the CBvS vis-à-vis nonresidents denominated in convertible foreign currencies with an original maturity of one year or less; - (ii) all outstanding credit from the IMF resulting from purchases; - (iii) the nominal value of all derivative positions (including swaps, options, forwards, and futures) of the CBvS, implying the sale of foreign currency or other reserve assets; - (iv) all foreign exchange liabilities of the CBvS to resident entities excluding foreign exchange liabilities to the CG (examples include claims in foreign exchange of domestic banks, non-ring-fenced reserve requirements of domestic banks on their foreign currency deposits, reserve requirements of domestic banks on their foreign currency deposits that are ring-fenced in Suriname’s sovereign bond in the amount of USD 10.283 million, and CBvS credits in foreign exchange from the domestic market). - Reporting: - CBvS provides data on foreign reserves and foreign exchange cash flow to the Fund once a week. - Data indicated in Table 3 provided monthly in both official and program exchange rates with lag no more than two weeks after month end. - At each program test date, quarterly NIR data submitted by CBvS to IMF will be audited by CBvS external auditors per International Standards on Auditing; auditor reports submitted to CBvS with a copy to the IMF no later than 60 days after each test date. - Data on total foreign exchange mineral revenue provided weekly by the government to the IMF. - Inflows of government’s foreign exchange mineral revenue to the CBvS monitored as part of weekly reporting of CBvS purchases and sales of foreign currency. - Adjusters to NIR targets: - 1. upward (downward) by the full amount of the cumulative surplus (shortfall) in program loan disbursements from IFIs relative to baseline projections reported in Table 2. - Program loan disbursements defined as external loan disbursements from official creditors usable for financing of the CG. - 2. upward (downward) by the full amount of the cumulative surplus (shortfall) in loans from official bilateral and private creditors (including international capital markets) relative to baseline projections reported in Table 2. - 3. Upward (downward) by the full amount of the cumulative surplus (shortfall) in the sum of the government’s total mineral and other revenues received in foreign exchange that are transferred to the CG account at the CBvS, with exemption of pending transfers to the foreign bank account of the CBvS, relative to baseline projections reported in Table 4. - Mineral revenue in FX: government’s FX tax and non-tax proceeds from Staatsolie Suriname and from gold companies; includes corporate tax, wage tax (including old age fund contributions), dividend tax, indirect taxes, dividends, royalties and others; royalties from small scale gold mining included. - Other FX revenues of the CG: any revenues in foreign exchange other than mineral revenue as defined above. - 4. downward (upward) by the full amount of the cumulative surplus (shortfall) in the sum of the government’s total mineral and other revenues received in foreign exchange that are transferred to the CG account at the CBvS, relative to baseline projections reported in Table 4. [Note: repeated in text as adjustment mechanism elements] - 5. downward by the amount of FX sales by the CBvS insofar as these sales occur via competitive auctions in response to the intraday depreciation in the exchange rate versus the U.S. dollar that is more than 2 percent and are less than USD 2 million per day. This adjustor is capped at USD 20 million per quarter. ### H. Net Domestic Assets (NDA) of the CBvS - Definitions: - Ceiling applies to cumulative flows from the beginning of the year. - NDA = reserve money (defined below) minus net foreign assets (NFA). - Items in foreign currencies valued at fair value and at program exchange rates. - As defined, stock of NDA amounted to SRD 8,777.1 million as of December 31, 2020 (Table 6). - Reserve money at program exchange rates defined as: - currency in circulation, commercial banks’ deposits in correspondent accounts at the CBvS, statutory cash reserve requirements against prescribed liabilities in SRDs and foreign currency held by commercial banks at the CBvS, other commercial banks’ deposits at the CBvS in national and foreign currency, other demand deposits in national and foreign currency, and gold certificates. - Exclusions: Central bank certificates issued to retail investors as part of open market operations to absorb liquidity; reserve money excludes balances in deposit auctions and commercial banks’ term deposits at the CBvS. - Reserve money amounted to SRD 12,816.6 million as of December 31, 2020. - Value of NFA at program exchange rates calculated as difference between foreign assets and foreign liabilities: - Foreign assets include foreign exchange (foreign currency cash, deposits with foreign correspondents, holdings of foreign securities), monetary gold, IMF reserve position, and SDR holdings. - Foreign liabilities include liabilities of the CBvS vis-à-vis nonresidents denominated in foreign currencies; all outstanding credit from the IMF resulting from purchases under arrangements and SDR allocation; nominal value of derivative positions (including swaps, options, forwards, and futures). - As defined, NFA amounted to SRD 4,039.5 million as of December 31, 2020 (Table 6). - Reporting: Data provided to the IMF with a lag of no more than two weeks after the end of the month. Quarterly NDA data reviewed by CBvS external auditors; reports submitted to CBvS with a copy to IMF no later than 60 days after each test date. - Adjusters: NDA targets will be adjusted consistent with NIR target adjustment mechanism (see section F) as follows: - 1. downward (upward) by the full amount of the cumulative surplus (shortfall) in program loan disbursements from IFIs relative to the baseline projections reported in Table 2. - 3. downward (upward) by the full amount of the cumulative surplus (shortfall) in loans from official bilateral and private creditors (including international capital markets) relative to the baseline projections reported in Table 2. - 4. downward (upward) by the full amount of the cumulative surplus (shortfall) in the sum of the government’s total mineral and other revenues received in foreign exchange that are transferred to the CG account at the CBvS, with exemption of pending transfers to the foreign bank account of the CBvS, relative to baseline projections reported in Table 4. ### I. Key Baseline Projection Figures (Cumulative flows from the beginning of the fiscal year) - Table 2. Suriname: Budget and Project Financing in FX (Baseline Projection) - External loans from IFIs for budget financing 1/: - End-June 2023 0 - End-July 2023 0 - End-August 2023 0 - End-September 2023 0 - End-October 2023 0 - End-November 2023 0 - End-December 2023 150 - End-January 2024 0 - End-February 2024 0 - End-March 2024 0 - End-April 2024 0 - End-May 2024 0 - End-June 2024 0 - End-July 2024 0 - End-August 2024 0 - End-September 2024 0 - End-October 2024 0 - End-November 2024 0 - End-December 2024 175 - External debt from bilateral and private creditors for budget financing 2/: - End-June 2023 0 - End-July 2023 0 - End-August 2023 0 - End-September 2023 0 - End-October 2023 0 - End-November 2023 0 - End-December 2023 0 - End-January 2024 0 - End-February 2024 0 - End-March 2024 0 - End-April 2024 0 - End-May 2024 0 - End-June 2024 0 - End-July 2024 0 - End-August 2024 0 - End-September 2024 0 - End-October 2024 0 - End-November 2024 0 - End-December 2024 0 - External loans for project financing: - End-June 2023 36 - End-July 2023 42 - End-August 2023 48 - End-September 2023 54 - End-October 2023 59 - End-November 2023 65 - End-December 2023 71 - End-January 2024 4 - End-February 2024 9 - End-March 2024 13 - End-April 2024 18 - End-May 2024 22 - End-June 2024 27 - End-July 2024 31 - End-August 2024 37 - End-September 2024 43 - End-October 2024 64 - End-November 2024 81 - End-December 2024 108 - 1/ Excluding IMF disbursements. - 2/ Including international capital markets. - Table 4. Suriname: Total FX Mineral Revenue received by the Government and Other FX Revenues of CG Transferred to CBvS (Baseline Projection) — cumulative flows (In USD millions) - End-June 2023 46 - End-July 2023 67 - End-August 2023 89 - End-September 2023 117 - End-October 2023 135 - End-November 2023 153 - End-December 2023 170 - End-January 2024 19 - End-February 2024 38 - End-March 2024 68 - End-April 2024 99 - End-May 2024 122 - End-June 2024 134 - End-July 2024 168 - End-August 2024 188 - End-September 2024 216 - End-October 2024 234 - End-November 2024 253 - End-December 2024 265 - Table 5. Suriname: FX Debt Service Payments by the Central Government and CBvS (Baseline Projection) — cumulative flows (In USD millions) - End-June 2023 76 - End-July 2023 92 - End-August 2023 112 - End-September 2023 121 - End-October 2023 136 - End-November 2023 163 - End-December 2023 204 - End-January 2024 21 - End-February 2024 54 - End-March 2024 112 - End-April 2024 125 - End-May 2024 152 - End-June 2024 210 - End-July 2024 237 - End-August 2024 257 - End-September 2024 265 - End-October 2024 281 - End-November 2024 310 - End-December 2024 333 ### J. Key Stock Figures as of December 31, 2020 (Table 6; In SRD millions) - Net foreign assets 4,039.5 - Foreign assets 8,243.5 - Foreign liabilities -4,204.0 - Net domestic assets 8,777.1 - Net claims on the government 8,234.0 - Claims on the government in local currency 9,833.7 - Liabilities to the government in local currency -446.8 - Claims on the government in foreign currency 144.1 - Liabilities to government in foreign currency -1,297.0 - Net claims on commercial banks -2,495.6 - Claims on commercial banks in local currency 2.2 - Liabilities to commercial banks in local currency -200.0 - Claims on commercial banks in foreign currency 187.0 - Liabilities to commercial banks in foreign currency -2,484.7 - Other items net 3,038.7 - Reserve money 12,816.6 - Reserve money in local currency 7,342.2 - Reserve money in foreign currency 5,474.4 - Memorandum item: Program exchange rate 14.018 *Source: IMF staff text as provided in the content unit.* ### 5. upward (downward) by the full amount of the cumulative surplus (shortfall) in CG and CBvS’s ### 5. upward (downward) by the full amount of the cumulative surplus (shortfall) in CG and CBvS’s debt service payments in foreign exchange relative to baseline projections reported in Table 5. ### FX purchases/sales adjusters and valuation - Adjusters: - Upward (downward) by the full amount of the cumulative surplus (shortfall) in CG and CBvS’s debt service payments in foreign exchange relative to baseline projections reported in Table 5. - Downward by the full amount of the CBvS’ cumulative purchases of foreign exchange from the market relative to the baseline projections reported in Table 7. - Valuation rule: - For the purposes of calculating adjusters, these flows will be valued at program exchange rates. ### Cumulative flows reporting (in USD millions) - Cumulative flows from the beginning of the fiscal year (In USD millions): - End-June 20230 - End-July 20230 - End-August 20230 - End-September 20230 - End-October 20230 - End-November 20230 - End-December 20230 - End-January 20240 - End-February 20240 - End-March 20240 - End-April 20240 - End-May 20240 - End-June 20240 - End-July 20240 - End-August 20240 - End-September 20240 - End-October 20240 - End-November 20240 - End-December 20240 ### Table reference - Table 7. Suriname: FX Purchases by CBvS (Baseline Projection) ### Ceiling on direct purchases/sales of FX by the CBvS and/or Central Government (continuous performance criterion) - Definition: - The ceiling on direct purchases/sales of FX by the CBvS and/or central government from/to SOEs and private sector will be a continuous performance criterion throughout the program period. - Excluded purchases/sales of FX by the CBvS from/to the FX market: - Purchases/sales of FX with banks and cambios undertaken through fixed allotment/variable price auctions. - Sales of FX to (former) CBvS employees for children’s overseas study and livelihood purposes, overseas pension transfers, overseas salary transfers and overseas travel expenses up to a maximum amount of USD 100,000 per quarter or an equivalent thereof in another convertible currency. - Purchases of EUR banknotes from banks and cambios in exchange for USD banknotes. - Sales of FX by mineral companies associated with these companies’ tax or non-tax obligations to the central government. - Reporting: - Data on direct purchases/sales of FX by the CBvS and/or central government from/to SOEs and private sector will be provided by the CBvS to the Fund daily. ### Central Government Mineral Revenue in Local Currency (Ceiling) - Definition: - The ceiling on central government mineral revenue in local currency will be assessed on cumulative basis and specified in U.S. dollars (converted at the weighted average SRD/U.S. dollar exchange rate published by the CBvS at the end of the previous working day). - For purposes of this performance criterion, central government mineral revenue is defined as the government’s tax and non-tax cash revenue from the state-oil company Staatsolie Suriname and from large- and small-scale gold companies. This revenue includes corporate tax, indirect taxes, dividends, royalties and other mineral revenue. - Excluded mineral revenue: - (i) wage taxes (including old age fund contributions); - (ii) consent right fees; - (iii) dividend tax; and - (iv) Staatsolie Suriname’s tax and non-tax obligations to the government netted out against accounts receivable from other state-owned enterprises. - Reporting: - Data on central government foreign and local currency tax and non-tax mineral revenue as defined above will be submitted on a weekly basis by revenue item, type of commodity and source counterparty (aggregated for small-scale gold companies). - Where the local currency mineral revenue is from a prior sale of mineral companies’ FX-denominated tax or non-tax obligations to the central government, the data will additionally include the sale transactions by date and counterparty, including the exchange rate and any margins or fees applied. - Data will be provided to the IMF within 3 working days of the end of each week. ### Other continuous performance criteria (program restrictions) - During the period of the Arrangement under the EFF, Suriname will not: - (i) impose or intensify restrictions on the making of payments and transfers for current international transactions; - (ii) introduce or modify multiple currency practices; - (iii) conclude bilateral payments agreements that are inconsistent with Article VIII; and - (iv) impose or intensify import restrictions for balance of payments reasons. ### Indicative target definitions — social spending and VAT refunds - Social Spending of Central Government (Floor): - Definition: - Social spending of central government includes all the spending of the Ministry of Social Affairs and Public Housing (Ministerie van Sociale Zaken en Volkshuisvesting) on social protection programs. - The floor on CG social spending is cumulative from the beginning of the year and is defined as the sum of spending on the following cash transfer programs: - General old-age pension. - General child benefit. - Financial assistance for persons with disabilities. - Financial assistance for weak households. - Social beneficiary program. - Reporting: - Data will be provided to the IMF with a lag of no more than six weeks after the end of the quarter. - Stock of Value Added Tax Refunds Outstanding (Ceiling): - Definition: - The stock of value added tax (VAT) refunds outstanding will be assessed as total cumulative VAT refund claims which have not yet been paid or declined by the Tax Authority of Suriname (Belastingdienst Suriname). - The stock is cumulative from the beginning of 2023. - A claim for a refund will be assessed as existing once a credit return is filed. - The stock of VAT refunds outstanding will exclude interest payable on approved delayed refunds and refunds due to non-VAT registrants. - A VAT refund claim is deemed to be paid if settled against outstanding payable VAT returns or if settled against non-VAT revenue arrears. - Reporting: - Data will be provided to the IMF with a lag of no more than six weeks after the end of the quarter. ### Information requirements — debt definition and program reporting - Debt definition (GFSM 2014 and Public Sector Debt Guide): - Total gross debt covers all liabilities that are debt instruments. A debt instrument is defined as a financial claim that requires payment(s) of interest and/or principal by the debtor to the creditor at a date, or dates, in the future. - Instruments considered debt instruments: - Special drawing rights (SDRs); - Currency and deposits; - Debt securities; - Loans; - Insurance, pension, and standardized guarantee schemes; and - Other accounts payable. - Exclusions from debt: - Equity and investment fund shares are not debt instruments. - Financial derivatives are not considered debt liabilities. - Budgetary Central Government (BCG) debt composition for the program: - BCG debt includes: - Debt Securities including short term liquidity instruments; - Loans (including overdraft in bank accounts); - Other Accounts Payables. - Netting: - Any liabilities issued by the BCG, held as an asset by other entity of the BCG should be netted out. - Since the consolidation is done at the level of BCG, central bank lending to the government is included in the stock of BCG debt. ### Routine data provision to support monitoring (frequency and items) - Daily/Semi-weekly: - Official nominal exchange rates. - Volumes and nominal exchange rates (inclusive of any fees, commission, or other types of charge) of foreign exchange transactions (purchases and sales) by banks and cambios. - Volumes and nominal exchange rates of direct purchases/sales of foreign exchange by the CBvS and/or central government from/to SOEs and private sector. - Monitoring Template IMF (no. 25) - Deposits including largest 5 depositors in accordance with the Enhanced Supervision framework, within one week after the reporting period. - Monitoring Template IMF (no. 26) – Liquid assets held by banks in accordance with the Enhanced Supervision framework, within one week after the reporting period. - Liquidity Coverage SRD template (no. 30) in accordance with the Enhanced Supervision framework, within one week after the reporting period. - Net Foreign Currency Position (Net Open Position) template (no. 27) for banks in accordance with the Enhanced Supervision framework. For cambios this ratio will also be reported, in both cases within one week after the reporting period. - Weekly/bi-weekly: - CBvS liquidity assistance to financial institutions, by institution. - Reports on large exposures by bank that are equal or exceed 10 percent of Tier 1 Capital (template no. 28) in accordance with the Enhanced Supervision framework, within two weeks after the reporting period. - Large deposits that are equal or exceed 10 percent of Tier 1 Capital (template no. 29) in accordance with the Enhanced Supervision framework, within two weeks after the reporting period. - Liquidity forecast and realization (templates no. 15, 17 and 19) in accordance with the Enhanced Supervision framework, within two weeks after the reporting period. - Liquidity stress testing (templates no. 10-13) in accordance with the Enhanced Supervision framework, within two weeks after the reporting period. - Lending availability in SRD and USD (templates no. 21 and 22) in accordance with the Enhanced Supervision framework, within two weeks after the reporting period. - Table on monitoring of banking sector benchmarks in accordance with the Enhanced Supervision framework on a bi-weekly basis, within two weeks after the reporting period. - CBvS purchases and sales of foreign currency (FX cash flow table). FX auction amounts, auction bids, highest and lowest prices, cut-off and weighted average prices, FX rate before the auction. - Information on auction results for open market operations no later than two days after the auctions, including on: instrument type, total open market operations auction volume, settlement date, expiration date, the number of total bids, total amount of bids, the number of total allocated bids, total amount of allocated bids, the minimum bid rate, the cut-off interest rate, the highest bid rate, and the weighted average allotted interest rate. - Weekly submission of daily transactions and rates for the following: interest rates on domestic debt securities by maturity; required and excess reserves of the banking sector in local and foreign currency; total liquidity assistance to banks through normal lending operations, standing facilities, and ELA. Interest rates on OMOs, standing facilities, and ELA by maturity. - Weekly submission of daily mineral tax and non-tax revenue of major commodity companies and small gold miners, by revenue item and type of commodity (and separately for large-scale gold companies and small-scale gold miners). Data is to be provided within 3 working days of the end of each week. - Monthly: - CG operations (revenues and expenditure) data in GFS format within six weeks of the end of the month. - CG detailed revenues data from the tax office by revenue category, including: (i) direct tax by item, (ii) indirect tax by item, and (iii) non-tax revenues by item within six weeks of the end of the month. - Number of public civil servants and total wage bill by Ministry within six weeks of the end of the month. - CG authorized spending data by Ministry within four weeks of the end of the month. - CG subsidies data by Ministry and programs within six weeks of the end of the month. - CG balance from the financing side by sources and by currency, with a lag of no more than six weeks after the end of the month. - CG domestic and external debt stock, including by: (i) creditor, (ii) currency, (iii) instrument; (iv) collateralized by natural resources revenue; and (v) guaranteed. The reporting lag should not exceed four weeks after the end of the month. - Amortization payments of CG and government guaranteed debt by creditor, instrument, and currency. In the case of issuance of government guaranteed debt, the name of the guaranteed individual/institution should be provided. The reporting lag should not exceed four weeks after the end of the month. - Interest payments and fees on CG and government guaranteed debt by creditor, instrument, and currency. The reporting lag should not exceed four weeks after the end of the month. - Stock of CG expenditure arrears, separately including payment of existing arrears and creation of new domestic arrears including the currency of the arrears. The reporting lag should not exceed four weeks after the end of the month. - Stock of CG domestic and external debt arrears, including the currency of arrears. The reporting lag should not exceed two weeks after the end of the month. - New debt contracts (official or private) entered into by the CG and/or SOEs. The reporting lag should not exceed two weeks after the end of the month. - Holdings of domestic T-notes and T-bills (SRD-denominated and foreign currency-denominated) by investor, maturity, and currency. The reporting lag should not exceed four weeks after the end of the month. - Legal measures that affect the revenue of the CG, such as tax rates, import tariffs, and exemptions. The reporting lag should not exceed six weeks after the end of the month. - Balance sheet of the CBvS within two weeks of end of the month. - A summary of the monetary survey of the banking system (including CBvS and deposit-taking institutions). This information should be received with a lag of no more than six weeks after the end of the month. - Income statement of the CBvS on a cash and accrual basis, with a lag of no more than three weeks from the end of the month. - Projections of CBvS purchases and sales of foreign currency (FX cash flow table, 12 months ahead). - Information on interconnectedness of the financial sector and related party lending (templates no. 6 and 37) in accordance with the Enhanced Supervision framework, within four weeks after the end of the month. - The deposit funding structure of the banks (template no.8) in accordance with the Enhanced Supervision framework, within four weeks after the end of the month. - Information on measures taken by the banks in the context of the COVID-19 pandemic (templates no.33-35), within four weeks after the end of the month. - Banks’ claims on the government and State-owned Entities with breakdown by type (debt types, loan types including the gross amount of overdrafts) within four weeks after the end of the month. - The Monthly Returns as reported to the CBvS, within four weeks of the end of the month. - A written update on the progress of the Asset Quality Review (until the review has been concluded) that includes any issues encountered by CBvS and/or their advisor and any remedial actions taken. - Data on foreign reserve assets and foreign reserve liabilities for NIR target purposes (Table 2) evaluated at both official and program exchange rates, within two weeks of the end of the month. - Data on NDA, NFA, and reserve money (Table 4) evaluated at both official and program exchange rates, within two weeks of the end of the months. - Data on foreign reserve assets split into ring-fenced and non-ring-fenced assets evaluation at official exchange rates, within two weeks of the end of the months. - Consumer price index, including by sub-components of the CPI index within four weeks after the end of the month. - Cash flow of EBS showing government transfers to cover the gap between the average electricity tariff and EBS recovery cost within eight weeks after the end of the month. - Electricity average tariff, total electricity consumption volume, total billing and amount collected (in SRD) to be provided by consumption categories (household, commercial, and industrial) and by consumption volume. This information should be received with a lag of no more than eight weeks after the end of the month. - Electricity costs including: (i) production costs: fuel costs, Staatsolie electricity costs, hydropower costs, separately, (ii) other operational costs: personnel costs and financing costs, and (iii) investment costs. This information should be received with a lag of no more than eight weeks after the end of the month. - EBS committed and executed payments to Staatsolie for purchases of fuel and electricity. This information should be received with a lag of no more than eight weeks after the end of the month. - Quarterly: - Detailed balance of payments data within 60 days after the end of the quarter. - Detailed International Investment Position data within two months after the end of the quarter. - Projections regarding banks’ balance sheets and profit and loss statement (template no. 2 and 3) in accordance with the Enhanced Supervision framework, within four4 weeks after the end of the quarter. - Liquidity forecast and realization (templates no. 14, 16 and 18) in accordance with the Enhanced Supervision framework, within four weeks after the end of the quarter. - Progress reports of the banks on inspection items identified by CBvS, within six weeks after the end of the quarter. - A full set of quarterly Financial Soundness Indicators (FSI) calculated by the CBvS within 60 days after the end of the quarter. - CG spending on social protection programs, by program, as defined for the indicative target on social spending. The reporting lag should not exceed six weeks after the end of the quarter. - The stock of VAT refunds outstanding calculated by the Tax Authority of Suriname within six weeks after the end of the quarter. *Source: 1surea2024002 - 5. upward (downward) by the full amount of the cumulative surplus (shortfall) in CG and CBvS’s* ### 48. Annual ### 1surea2024002 - 48. Annual ### Supplementary information and procedural update - Staff is no longer proposing a structural benchmark (SB) on fully constituting the Executive Board of the Central Bank of Suriname (CBvS) because the government issued a decree appointing the final member of the Executive Board on March 11. - The supplement reflects information that became available after the staff report was finalized and "does not alter the thrust of staff appraisal." - Approved by Nigel Chalk (WHD) and Bergljot Barkbu (SPR) March 15, 2024. - Statement by Suriname Executive Director and delegation dated March 20, 2024. ### Structural benchmarks: selected measures, target dates, and status - Establish competitive FX auctions for the CBvS to undertake buying/selling of FX during periods of disorderly market conditions (defined as when the intraday change in the exchange rate versus the U.S. dollar is more than 2 percent) under the agreed rule. — Target: December 2021 — Status: Met. Objective: Ensure the CBvS has a mechanism to intervene in the FX market. - Establish an electronic trading platform for inter-bank/cambio FX trading. — Target: June 2022 — Status: Not met. Objective: Create a consolidated FX market. - Publish on the CBvS's external website the FY 2020-2021 audited IFRS financial statements. — Target: June 2022 — Status: Not met. Objective: Strengthen accountability and transparency, and reduce risk of misreporting. - Develop a time-bound plan for the CBvS’s recapitalization agreed between the CBvS and the government. — Target: September 2022 — Status: Not met. Objective: Protect the CBvS’s financial autonomy. - Publish on the CBvS's external website the FY 2016 - 2018 audited financial statements. — Target: December 2021 — Status: Not met; implemented with a delay in February 2022. Objective: Strengthen accountability and transparency, and reduce risk of misreporting. - National Assembly to pass amendments to the Central Bank Act in line with IMF staff recommendations (clarify mandate, autonomy, transparency, accounting, profit distribution, reserves, recapitalization, limits on monetary financing). — Target: January 2022 — Status: Not met; implemented with a delay in April 2023. Objective: Strengthen CBvS’s mandate, autonomy, governance, and accountability and transparency. - Undertake full asset quality review for the two largest banks (internationally reputable specialist firm). — Target: September 2022 — Status: Met. Objective: Diagnose the largest banks and potential recapitalization needs. - Publish a time-bound plan to implement IMF technical assistance recommendations to streamline treasury functions through the Treasury Single Account (TSA). — Target: January 2022 — Status: Met. Objective: Improve governance and increase transparency. - Publish the financial assessment of EBS that includes its legacy liabilities. — Target: May 2022 — Status: Met. Objective: Achieve full cost recovery in the electricity sector. - Publish quarterly budget execution report starting with the end June 2023 budget outturns. — Target: 11September 2023 — Status: Met. Objective: Strengthen PFM. - MoFP, SDMO, and CBvS to sign a Memorandum of Understanding detailing respective responsibilities and processes with respect to external debt payments. — Target: 11January 2024 — Status: Met. Objective: Improve debt management and reporting, and avoid external debt arrears. - Selected new and proposed SBs (examples): - CBvS, in consultation with IMF, to set common equity tier one and capital adequacy ratio targets for banks and outline corrective measures if CET1/CAR targets are breached. — Target: 20March 2024 — Status: New proposed SB. Objective: Improve strength of the financial sector. - Publish on the CBvS's external website the FY 2020-2021 audited IFRS financial statements. — Target: 22June 2024 — Objective: Strengthen accountability and transparency, and reduce risk of misreporting. - Publish on the CBvS's external website the FY 2022 audited IFRS financial statements. — Target: 22June 2024 — Status: Proposed to be reset to September 2024. Objective: Strengthen accountability and transparency, and reduce risk of misreporting. - Develop a time-bound plan for the CBvS’s recapitalization agreed between the CBvS and the government. — Target: 22March 2024 — Status: Proposed to be reset to April 2024. Objective: Protect the CBvS’s financial autonomy. - Mandate that all tax declarations and transactions use a Fiscal Identification Number. — Target: 9June 2024 — Status: New proposed SB. Objective: Improve tax administration. - Implement a pilot Treasury Single Account for a limited set of ministries. — Target: 11January 2025 — Status: New proposed SB. Objective: Strengthen PFM. - Fully repay domestic debt arrears. — Target: 12March 2024 — Status: New proposed SB. Objective: Improve debt management and financial stability. - Governance, procurement, AML/CFT, and anti-corruption benchmarks include ratification and legislative amendments, with mixed implementation and several proposed resets or reformulations. ### Recent economic developments and outlook - Growth: - 2023 economic growth decelerated to 2.1 percent, from 2.4 percent in 2022. - Growth is expected to rebound to 3.0 percent in 2024. - Primary contributors to 2023 growth: heightened spending in the non-mining sector (especially services) and public sector investments; a decrease in gold mining output restrained expansion. - 2024 outlook anticipates sustained increases in both public and private sector investments. - Inflation: - Inflation declined through late 2023, "dropping beyond expectations, to 32.6 percent by the end of the year." - Drivers of the decline: demand management via fiscal discipline and tighter monetary policies, exchange rate stabilization, and unwinding of international price shocks. - High 2023 inflation also reflects realignment of relative prices due to phasing-out of subsidies on utilities (electricity, water, and gas). - For 2024, inflation is forecast to continue moderating, "potentially falling significantly below 20 percent," despite continued adjustments in utility tariffs, including implementation of cost-recovery tariffs for electricity throughout the year. ### Fiscal, social, and tax policy actions and targets - Fiscal consolidation commitment: authorities aim to meet a primary surplus target of 2.7 percent of GDP in 2024. - Measures implemented or in place to support consolidation and social mitigation: - Tripling the prices of cooking gas as of September 1st, 2023, with quarterly adjustments thereafter to reach cost recovery tariff levels; concurrently reducing subsidies of the energy company EBS to the cooking gas company Ogane. - Increased enforcement of tax compliance resulting in a rise of tax revenues recently. - Minister of Finance ensured that the budget of line ministries will not increase by new hirings; current wage bill limits cannot be exceeded by adding new civil servants. - To mitigate real income losses for civil servants given high inflation and a stringent nominal wage policy, the government extended a nominal monthly bonus to civil servants through end-2023 and will review the measure quarterly. - Adjustment in the income brackets for tax purposes, including an increase in the tax-free income floor, was agreed for 2024. - Further measures to raise revenues and rationalize expenditures are being considered to meet the fiscal target. - Electricity subsidy reform (Government decision on March 7): - Transition from untargeted to targeted subsidies. - First step: adjustment in the exchange rate from 30 to 36 Surinamese dollars (SRDs) for USD for costs calculations. - A 40 percent reduction of subsidies to households in March 2024, followed by four subsequent bi-monthly reductions of 7 percent each. - For non-household entities, the initial 40 percent reduction in subsidies applies through May [2024]. *Source: IMF staff.* ### 2024. It implies, reaching cost-recovery for this category by the end of 2024. ### 1surea2024002 - 2024. It implies, reaching cost-recovery for this category by the end of 2024. ### Social protection, subsidies, and electricity tariffs - The government will reach cost-recovery for the specified category by end-2024. - A comprehensive package of social support and other purchasing power enhancing measures will be introduced to support especially vulnerable households. - The Ministry of Social Affairs will register and incorporate vulnerable households in the Social Beneficiary Program. - The Government will enforce EBS adherence to recommendations from several studies to enhance efficiency and improve invoicing, revenue collection, and financial administration. - Starting March 1, 2024, the national electricity company will introduce an automatic quarterly tariff adjustment mechanism based on exchange rates and fuel prices. - Ongoing efforts to expand the energy portfolio with cleaner sources will continue. - Authorities will further increase cash transfers using traditional instruments, compensating for the phasing out of electricity and other subsidies and inflation in general. - The Ministry of Social Affairs is improving administration and distribution mechanisms to ensure that the indicative floor for social spending is continuously met. - Authorities emphasize improvement of coverage, efficiency and effectiveness of social benefits as a high priority; they will design a time-bound plan based on ILO and IDB reports to improve efficiency and effectiveness. ### Treasury, cash management, and suppliers' arrears - The recently established Treasury Department at the Ministry of Finance and Planning (MoFP) focuses on management of government’s banking, payment systems, cash flow, liquidity management and suppliers’ arrears. - Despite closer monitoring and adoption of controls, suppliers’ arrears increased significantly in the past couple of months and warrant an immediate and coordinated approach to reduce them to more sustainable levels. - A suppliers’ arrears management strategy is being developed, whereby the Treasury and Budget Department coordinate with the Tax Office to align suppliers’ arrears from line ministries with tax revenues. - High-frequency monitoring and cash management operations will prevent line ministries’ monthly expenditure from exceeding the monthly tax revenues envelope. - The authorities are committed to promptly clearing all remaining domestic debt arrears, except technical arrears, by end-March 2024. ### VAT evaluation and tax administration - Evaluation of VAT implementation reveals ample space for improvement and enhanced effectiveness. - The VAT Evaluation Commission presented a report with a comprehensive set of recommendations to improve implementation, effectiveness, coverage, and neutrality of the law. - A Cartac/IMF mission carried out a comprehensive evaluation of VAT implementation; draft report with recommendations has been sent to the tax authorities. - Technical assistance to improve the refund process is in the pipeline. ### Debt restructuring and sustainability - Important strides on debt restructuring have been undertaken; the Government is highly committed to finalize the whole process by end-2024. - June 2022: government of Suriname signed an agreement in principle (AIP) with the Paris Club creditors; by 2023, all bilateral agreements with the Paris Club creditors were signed. - July 2022: first restructuring proposals submitted to India and China; in 2023, restructuring with India was finalized. - With China, the minutes of a technical level understanding on the two-stage debt treatment (flow and stock relief) were signed by both parties by March 1st. - The debt treatment with China is comparable with that of the Paris Club (PC) creditors and is consistent with debt sustainability. - December 6, 2023: the two outstanding Eurobonds were exchanged for one fixed income instrument with a value recovery provision to ensure that the Republic and its population will continue to benefit from oil-related revenues. - Remaining private external creditors hold 1 percent of total pre-restructured debt; negotiation proceeds in good faith with sharing of relevant, non-confidential information. - The restructuring of domestic debt (including arrears) to the central bank and commercial banks was finalized in 2023. - To ensure timely payments of debt obligations, a memorandum of understanding (MoU) between SDMO, the MoFP, and the CBvS was signed, defining responsibilities for timely information provision and processing of payments; the MoU specifies an escalation process within each agency and procedures for inter-agency monitoring. ### Monetary and financial sector policies and supervision - The Central Bank of Suriname (CBvS) met the end-December 2023 monetary QPCs, with a slight deviation in one indicative monetary target related to reserve money. - Policy measures included open market operations, increased reserve requirements in local currency, and the imposition of a cap on private sector credit growth, alongside close policy coordination between the CBvS and the Ministry of Finance and Planning. - Monetary policy tightening measures resulted in a reduction in local currency private sector credit expansion and contributed to reining in the growth of reserve money, leading to a notable reduction in inflation rates. - The CBvS assessed and approved time-bound recapitalization and restructuring plans of commercial banks with capital shortages and is monitoring implementation on a monthly basis. - The monetary authorities are designing a new governance framework for state-owned banks, with a key element to establish greater supervisory autonomy and structural enhancements to ensure full operational independence for functions such as Internal Audit, Compliance, Risk and Treasury. - The National Assembly enacted the Bank Resolution and the revised Banking and Credit System Supervision legislations on December 5, 2023; promulgation of these Acts occurred in January 2024, empowering the CBvS to address financial distress and amplifying risk-based supervisory capabilities. ### Exchange rate and FX market developments - Recent foreign exchange market developments show ample availability of foreign currency combined with a decreasing demand, leading to instances of accelerated currency appreciation. - Technical challenges delayed the launch of the electronic FX Trading Platform, but the CBvS operationalized electronic foreign currency transactions among banks in March 2024. - Upon gaining proficiency in intra-bank FX trading, the CBvS will progressively open the platform to other market participants to nurture healthy and equitable competition on a non-distorted FX market. ### Program implementation, data quality, and risks - Corrective measures were taken to improve data collection and program performance monitoring. - There was a case of use of inaccurate data leading to a de minimis misreporting on the primary fiscal balance (cash basis) for the fourth review, resulting in a missed criterion by USD 0.16 million, or 0.005 percent of GDP. - MOFP staff failed to apply the correct exchange rate to payments denominated in USD and EUR; the error was promptly notified to Fund staff and authorities have requested IMF technical assistance to improve government finance statistics. - Program performance has been largely successful, demonstrated by significant improvement in the macroeconomic environment, but risks remain significant. - Upside and downside risks include the final investment decision (FID) of major oil companies, which must be managed within a disciplined fiscal framework to avoid complacency regarding further fiscal consolidation. - The 2025 general elections could raise political obstacles for further adjustments and reforms. - Authorities remain committed to consolidating achievements, securing macroeconomic stability and restoring fiscal sustainability, and strengthening institutional framework to increase capacity to absorb the upcoming oil and gas boom. *From: 1surea2024002 - 2024. It implies, reaching cost-recovery for this category by the end of 2024.* --- _Source: https://www.imf.org/-/media/files/publications/cr/2024/english/1surea2024002.pdf_