Press Release No. 24/93

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

March 20, 2024

• The IMF Executive Board completed the fifth review under the Extended Fund Facility (EFF) arrangement for Suriname, allowing for an immediate purchase equivalent to SDR 46.7 million (about USD 62 million) of which SDR 19.1 million or about USD 25million would be for budget support.
• The authorities’ continued commitment to fiscal discipline and macroeconomic stability is paying off. The economy is growing, inflation is on a steady downward trend, and investor confidence is returning.
• The authorities’ near-term priority is to maintain fiscal discipline, while ensuring that the poor and vulnerable are protected, and persevere with the structural reforms to strengthen institutions and improve governance.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) 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 62million), bringing total disbursement to SDR 243.7 million (about USD 323million).

Suriname’s EFF arrangement was approved by the Executive Board on December 22, 2021 (see Press Release No. 21/400). Since then, Suriname has been steadily implementing an ambitious economic reform agenda aimed at restoring fiscal and debt sustainability through fiscal consolidation and debt restructuring, protecting the vulnerable by expanding social programs, upgrading the monetary and exchange rate policy framework, addressing the financial sector’s vulnerabilities, and advancing the anti-corruption and governance agenda.

Following the Executive Board discussion on Suriname, Mr. Kenji Okamura, Deputy Managing Director, and Acting Chair, issued the following statement:

``The authorities’ commitment to fiscal discipline and macroeconomic stabilization under the EFF-supported program is paying off. The economy is growing, inflation is on a steady downward trend, and investor confidence is improving. Near-term downside risks highlight the importance of maintaining the reform momentum to secure hard-won gains.

``The authorities’ determination to carry out politically challenging reforms is commendable. All quantitative performance criteria for this review were met, and structural reforms are proceeding, albeit with some delays.

``The near-term priority is to preserve fiscal discipline to put public debt on a firmly downward path and build resilience to future shocks. The authorities’ commitment to removing unregistered and chronically absent workers from the public payroll will help create fiscal space for a more meaningful wage increase for productive civil servants. Gradually phasing out electricity subsidies will help finance higher social assistance spending and channel more resources toward growth-enhancing investment. Ensuring the efficient and effective allocation of social spending remains paramount. Stronger commitment controls to prevent the accumulation of supplier arrears is also a priority.

``Noteworthy progress has been made with debt restructuring. Bilateral agreements with all official creditors have been completed and the debt exchange with private external bondholders has been finalized. Domestic debts to the central bank and commercial banks have been restructured. The priority is to promptly clear domestic debt arrears.

``Monetary policy is supporting disinflation. The authorities’ demonstrated commitment to flexible, market-determined exchange rate is helping support accumulation of international reserves. The recent approval of recapitalization plans of banks with capital shortages and the governance framework for the state-owned banks are important steps toward addressing banking sector vulnerabilities. Prompt finalization of the central bank recapitalization plan will help further strengthen its operational independence and financial autonomy.

``The authorities should persevere with their ambitious structural reform agenda to strengthen institutions, governance, and data quality, including with continued capacity development support from the Fund and other development partners.’’