IMF Executive Board Concludes 2019 Article IV Consultation with Suriname
IMF News, December 12, 2019
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Bibliographic details
- Published: December 12, 2019
Overview and press details
- Press Release No. 19/456
- December 12, 2019
- IMF Communications Department
- PRESS OFFICER: Randa Elnagar
- Phone: +1 202 623-7100 Email: MEDIA@IMF.org
- On December 11, 2019, the Executive Board of the International Monetary Fund (IMF) concluded the 2019 Article IV consultation with Suriname.
Economic performance and outlook
- Real GDP grew by 2.6 percent in 2018, following 1.8 percent in 2017.
- Activity growth has been broad based with expansions in wholesale and retail trade, construction, hotels, restaurants, and manufacturing, while mining has remained stable.
- Inflation has fallen below 5 percent mainly arising from exchange rate stability and control over excess liquidity.
- The unemployment rate was 7.6 percent in 2017 and is expected to have declined further in 2018.
- Real GDP is expected to expand annually by 2¼ to 2½ percent during 2019−24, while inflation is expected to remain low.
- The balance of risks to this outlook is negative, mainly due to fiscal imbalances.
- The overall fiscal deficit is expected to reach 8.6 percent of GDP in 2019 while public debt remains high at around 72 percent of GDP.
Executive Board assessment — key messages
- Directors took positive note that the Surinamese economy is growing steadily, with a falling unemployment rate, low inflation, and a stable exchange rate.
- Directors stressed that stabilization presents an opportunity to address central challenges: a weak fiscal position and rising public debt; monetary and financial supervision frameworks that need enhancement; a low degree of economic diversification; and other structural impediments to growth.
- Timely action is necessary to reduce macroeconomic vulnerabilities and downside risks.
Fiscal policy and public debt
- Directors underscored the importance of putting public debt on a sustained downward path.
- They were encouraged by the authorities’ fiscal plans and emphasized the need to:
- phase out electricity sector subsidies,
- implement the VAT,
- continue to improve revenue and expenditure administration.
- Implementing these measures, while also protecting vulnerable households, would be instrumental in creating space for public investment and supporting long-term growth.
- Directors welcomed the passage of the public financial management law.
Monetary policy, central bank, and financial sector
- Directors expressed concern about the resumption of monetary financing of the budget this year but welcomed the authorities’ plan to avoid any further such financing, including through a new Bank Act.
- They welcomed the recent introduction of new monetary tools and instruments and the preparation of several draft legislation to enhance the monetary framework.
- Directors recommended that the central bank should:
- publish explicit monetary targets,
- further expand their operational tool box to implement effectively a reserve money target,
- further strengthen coordination with the government on liquidity projections and operations.
- Directors generally agreed that a more flexible exchange rate is needed to act as a shock absorber.
- On the financial sector, Directors:
- recognized important vulnerabilities,
- urged the central bank to revamp its supervisory actions and take a more assertive approach to ensuring banks’ return to compliance with regulatory requirements over a pre-determined time horizon,
- recommended establishment of a comprehensive crisis management system to give the central bank the power to intervene in banks’ governance and operations when necessary, and to improve bank resolution.
- Directors looked forward to approval of draft legislation in these areas as soon as feasible.
- Directors were encouraged that the authorities have embarked on a national risk assessment this year to further enhance the AML/CFT framework.
Structural policies and labor market
- Directors underscored the importance of diversifying the economy and implementing structural reforms to boost potential growth.
- Key areas highlighted:
- addressing the high costs of doing business,
- reforming the investment framework,
- strengthening governance to support investor confidence.
- Investment in education and labor market reforms, combined with a meaningful safety net for the unemployed, will be important.
- Directors were encouraged by recent laws on the minimum wage and the enhancement of maternity and paternity support.
- They welcomed the authorities’ commitment to strengthen governance in the extractive sector.
Selected economic indicators (as presented)
- Real GDP (percent change): -5.6 (2016); 1.8 (2017); 2.6 (2018); 2.3 (2019); 2.5 (2020); 2.4 (2021); 2.0 (2022); [no value shown for 2023]; [no value shown for 2024]
- Nominal GDP: 19.1 (2016); 23.3 (2017); 7.4 (2018); 11.8 (2019); 12.6 (2020); 8.0 (2021); 10.7 (2022); 6.0 (2023); 6.7 (2024)
- GDP deflator: 26.2 (2016); 21.2 (2017); 4.6 (2018); 9.3 (2019); 9.9 (2020); 5.5 (2021); 8.5 (2022); 3.6 (2023); 4.1 (2024)
- Consumer prices (period average): 55.5 (2016); 22.0 (2017); 6.9 (2018); 4.5 (2019); 5.8 (2020); 4.7 (2021); 10.2 (2022); 5.1 (2023); 4.8 (2024)
- Consumer prices (end of period): 52.4 (2016); 5.4 (2017); 5.7 (2018); 8.3 (2019); 5.2 (2020); 4.4 (2021)
- Unemployment rate: 9.7 (2016); 7.6 (2017); 7.1 (2018); 6.3 (2019); 5.9 (2020)
- Labor force participation rate: 59.6 (2016); 59.9 (2017); 60.2 (2018); 60.6 (2019); 60.9 (2020); 61.2 (2021); 61.5 (2022); 61.8 (2023); 62.2 (2024)
- Broad money (constant exchange rate, percent change): 8.6 (2016); 8.1 (2017); 9.5 (2018); 9.4 (2019); 7.5 (2020); 7.0 (2021)
- Broad money (local currency; percent of GDP): 27.7 (2016); 25.3 (2017); 28.0 (2018); 28.8 (2019); 29.3 (2020); 29.7 (2021); 29.4 (2022); 30.2 (2023); 30.7 (2024)
- Reserve money (constant exchange rate, percent change): 22.2 (2016); 35.4 (2017); 14.8 (2018)
- Reserve money (percent of GDP): 15.4 (2016); 15.3 (2017); 19.3 (2018); 19.9 (2019); 20.1 (2020); 19.7 (2021); 20.2 (2022); 20.4 (2023)
- Private sector credit (constant exchange rate, percent change): -5.7 (2016); 0.9 (2017); -4.5 (2018); -4.7 (2019); 12.8 (2020); 10.6 (2021); 14.5 (2022)
- Private sector credit (percent of GDP): 38.6 (2016); 31.7 (2017); 28.2 (2018); 24.3 (2019); 23.4 (2020); 24.8 (2021); 25.0 (2022); 27.1 (2023); 28.9 (2024)
- Central government revenue and grants (percent of GDP): 18.9 (2016); 23.9 (2017); 25.4 (2018); 24.9 (2019); 26.3 (2020); 26.0 (2021)
- Central government total expenditure (percent of GDP): 30.9 (2016); 31.0 (2017); 34.0 (2018); 33.8 (2019); 33.2 (2020); 32.7 (2021); 33.5 (2022)
- Central government primary expenditure (percent of GDP): 26.6 (2016); 29.9 (2017); 29.1 (2018); 28.7 (2019)
- Overall balance (net lending/borrowing) 1/ (percent of GDP): -9.1 (2016); -8.8 (2017); -7.1 (2018); -8.6 (2019); -8.9 (2020); -8.2 (2021); -6.4 (2022); -7.6 (2023); -7.5 (2024)
- Primary balance (percent of GDP): -6.5 (2016); -5.3 (2017); -3.5 (2018); -4.8 (2019); -5.0 (2020); -4.1 (2021); -2.7 (2022); -2.6 (2023)
- Net acquisition of financial assets 2/: 13.2 (2016); 0.3 (2017); -11.9 (2018)
- Net incurrence of liabilities: 22.3 (2016); 9.1 (2017); 8.9 (2018); 8.2 (2019); 6.4 (2020)
- Net domestic financing: -11.1 (2016); 2.8 (2017); 2.7 (2018)
- Net external financing: 1.4 (2016); 6.1 (2017); 4.2 (2018); 5.0 (2019); 4.9 (2020)
- Central government debt (percent of GDP) 3/: 76.1 (2016); 74.6 (2017); 72.1 (2018); 72.3 (2019); 79.5 (2020); 83.8 (2021); 87.4 (2022)
- Domestic: 21.4 (2016); 22.4 (2017); 22.5 (2018); 21.0 (2019); 21.8 (2020); 23.8 (2021); 25.6 (2022); 27.2 (2023)
- External: 54.7 (2016); 52.2 (2017); 49.6 (2018); 51.3 (2019); 52.8 (2020); 56.3 (2021); 55.7 (2022); 58.2 (2023); 60.1 (2024)
- Current account balance (percent of GDP): -5.1 (2016); 1.9 (2017); -3.4 (2018); -6.1 (2019); -5.9 (2020); -3.3 (2021); -4.3 (2022)
- Capital and financial account: 16.1 (2016); 3.5 (2017)
- Overall balance: 1.6 (2016); 1.3 (2017); 3.4 (2018); -0.1 (2019); -0.2 (2020); -0.6 (2021)
- Change in reserves (- = increase): -1.6 (2016); -1.3 (2017); 0.1 (2018); -0.9 (2019); 0.2 (2020); 0.6 (2021)
- GDP at current prices (SRD billions): 19.5 (2016); 24.0 (2017); 25.8 (2018); 32.5 (2019); 35.1 (2020); 38.8 (2021); 41.2 (2022); 43.9 (2023)
- Terms of trade (percent change): -2.8 (2016); -3.7 (2017); 7.7 (2018); 1.0 (2019); -0.5 (2020)
- Gross international reserves (USD millions): 381 (2016); 424 (2017); 581 (2018); 710 (2019); 819 (2020); 814 (2021); 857 (2022); 847 (2023); 813 (2024)
- In months of imports: 2.9 (2016); 3.7 (2017); 3.3 (2018)
- Gold price (USD per troy ounce): 1,248 (2016); 1,257 (2017); 1,269 (2018); 1,400 (2019); 1,531 (2020); 1,558 (2021); 1,580 (2022); 1,599 (2023); 1,619 (2024)
- Oil price (USD per barrel): 42.8 (2016); 68.3 (2017); 57.9 (2018); 55.3 (2019); 54.6 (2020)
Notes and data sources
- Sources: Surinamese authorities and Fund staff calculations and projections.
- 1/ The overall balance is computed using net financial transactions, and therefore, includes statistical discrepancy.
- 2/ Includes acquisition of stake in gold mine and loans to state-owned enterprises.
- 3/ The debt-to-GDP ratio is different when computed using the definition in the Government Debt Act of Suriname.
IMF Executive Board Concludes 2019 Article IV Consultation with Suriname — Press Release No. 19/456, December 12, 2019.
