IMF Executive Board Completes Third Review Under the Extended Fund Facility for Suriname

IMF News, September 25, 2023

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Published: September 25, 2023

Review outcome and disbursement

The Executive Board completed the third review under the Extended Fund Facility (EFF) arrangement for Suriname.
Completion allows the authorities to draw the equivalent of SDR 39.4 million (about US$52 million), bringing total purchase to SDR 118.2 (about US$156 million).
The Board approved the authorities’ request for a waiver for non-observance of continuous performance criteria based on the corrective measures already taken.
Of the immediate disbursement of SDR 39.4 million (about US$ 52 million), SDR 25.6 million would be for budget support.

Program context and objectives

Suriname’s 36-month EFF arrangement was approved by the Executive Board on December 22, 2021, in an amount equivalent to SDR 472.8 million (366.8 percent of quota).
During the second review, the total access under the arrangement was reduced to an amount equivalent to SDR 383.9 million (297.8 percent of quota).
Program objective: support the authorities’ economic recovery plan to restore fiscal and debt sustainability through fiscal consolidation and debt restructuring, protect the vulnerable by expanding social protection, upgrade the monetary and exchange rate policy framework, address the financial sector’s vulnerabilities, and advance the anti-corruption and governance agenda.

Fund assessment and authorities’ measures (statements by Mr. Kenji Okamura, Deputy Managing Director and Acting Chair)

“The authorities’ commitment to fiscal discipline and macroeconomic stabilization under the EFF-supported program is starting to bear fruit. The economy is stabilizing. Pressures on the exchange rate have eased and inflation, while still high, is on a downward trend.”
“The authorities’ implementation of difficult reforms in a challenging socio-economic environment is commendable. Elimination of fuel subsidies, gradual phasing out electricity subsidies, curtailing wage payments to unregistered public servants, and broadening the VAT base will help create the fiscal space for expanded social protection spending and growth-enhancing investment.”
“The authorities have made concerted efforts to advance debt restructuring negotiations, with the agreements in line with program parameters reached with all creditors except China. Both sides expressed commitment to work towards an agreement on comparable terms with other creditors by the next review.”
“While the recent disinflationary measures are gaining traction, maintaining a tight monetary stance remains necessary to tackle the still-elevated inflation. At the same time, continued commitment to flexible, market-determined exchange rate remains critical to sustainably address Suriname’s external imbalances and support accumulation of international reserves. Swift implementation of the recently enacted new Central Bank Act and finalization of the central bank recapitalization plan upon completion of its financial audits will strengthen its operational independence and financial autonomy. Steadfast progress is also necessary to address banking system vulnerabilities, including through the ongoing assessment of banks’ recapitalization and restructuring plans under the authorities’ recently finalized framework.”
“Continued policy discipline and structural reform momentum are critical for achieving success in the authorities’ economic recovery program. Structural reforms to strengthen institutions, governance, and data quality remain key priorities with continued capacity building support by the Fund and other development partners. The authorities should also continue pursuing measures to strengthen the anti-corruption and AML/CFT frameworks and ensure their alignment with international standards.”

Key economic indicators (Est. / Proj.)

Real GDP growth: 2022 — 1.0; 2023 — 2.1; 2024 — 3.0 (Annual percentage change, unless otherwise indicated)
Nominal GDP growth: 2022 — 47.1; 2023 — 56.7; 2024 — 32.3
Consumer prices (end of period): 2022 — 54.6; 2023 — 40.0; 2024 — 20.0
Consumer prices (period average): 2022 — 52.4; 2023 — 53.3; 2024 — 30.9
Broad money: 2022 — 45.1; 2023 — 32.8; 2024 — 16.7
Private sector credit: 2022 — 65.7; 2023 — 31.2; 2024 — (not provided)
Central government revenue and grants (percent of GDP): 2022 — 27.8; 2023 — 26.1; 2024 — 25.3
Of which: Mineral revenue (percent of GDP): 2022 — 14.8; 2023 — 11.9; 2024 — 10.3
Central government total expenditure (percent of GDP): 2022 — 27.1; 2023 — 25.6; 2024 — (not provided)
Overall Balance (Net lending/borrowing) (percent of GDP): 2022 — -3.1; 2023 — -0.9; 2024 — -0.4
Primary Balance (percent of GDP): 2022 — 1.1; 2023 — 1.7; 2024 — 3.5
Central government debt (percent of GDP): 2022 — 120.1; 2023 — 107.0; 2024 — 93.9
- Domestic (percent of GDP): 2022 — 29.3; 2023 — 19.9; 2024 — (not provided)
- External (percent of GDP): 2022 — 90.8; 2023 — 79.8; 2024 — 74.0
External sector:
- Current account balance (percent of GDP): 2022 — 2.2; 2023 — 1.5; 2024 — (not provided)
- Capital and financial account (percent of GDP): 2022 — 11.2; 2023 — 7.7; 2024 — 3.6

Memorandum items

Gross international reserves (US$ millions): 2022 — 1,195; 2023 — 1,234; 2024 — 1,480
In months of imports: 2022 — 6.5; 2023 — 6.7; 2024 — 8.0
Usable gross international reserves (US$ millions) 1/: 2022 — 865; 2023 — 995; 2024 — 1,241
Usable reserves (in months of imports): 2022 — 4.7; 2023 — 5.4; 2024 — (not provided)
Official exchange rate (SRD per US$, average): 2022 — 24.6; 2023 — …; 2024 — (not provided)

1/ Excluding the PBOC swap and ring-fenced banks' FX required reserves.

Press Release No. 23/324, IMF

References

Press Release No. 21/400](https://www.imf.org/en/News/Articles/2021/12/22/pr21400-imf-executive-board-approves-extended-arrangement-under-the-extended-fund-facility-suriname)

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