IMF Executive Board Completes Fifth Review Under the Extended Fund Facility Arrangement for Suriname
IMF News, March 20, 2024
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Bibliographic details
- Published: March 20, 2024
Review outcome and disbursement
- The Executive Board completed the fifth review under the Extended Fund Facility (EFF) arrangement for Suriname.
- Completion of the review allows an immediate purchase equivalent to SDR 46.7 million (about USD 62 million).
- Of the immediate purchase, SDR 19.1 million or about USD 25million would be for budget support.
- Total disbursement under the arrangement now stands at SDR 243.7 million (about USD 323million).
Macroeconomic results and program status
- The authorities’ continued commitment to fiscal discipline and macroeconomic stability is "paying off."
- Observed macro outcomes:
- The economy is growing.
- Inflation is on a steady downward trend.
- Investor confidence is returning / improving.
- All quantitative performance criteria for this review were met.
- Structural reforms are proceeding, albeit with some delays.
Priorities and policy recommendations (from IMF statement)
- Near-term priority:
- Preserve fiscal discipline to put public debt on a firmly downward path and build resilience to future shocks.
- Fiscal and social policy recommendations:
- Remove unregistered and chronically absent workers from the public payroll to create fiscal space for a more meaningful wage increase for productive civil servants.
- Gradually phase out electricity subsidies to help finance higher social assistance spending and channel more resources toward growth-enhancing investment.
- Ensure efficient and effective allocation of social spending.
- Strengthen commitment controls to prevent the accumulation of supplier arrears.
- Debt and financial sector priorities:
- Promptly clear domestic debt arrears.
- Continue efforts on debt restructuring; noteworthy progress already achieved:
- Bilateral agreements with all official creditors have been completed.
- The debt exchange with private external bondholders has been finalized.
- Domestic debts to the central bank and commercial banks have been restructured.
- Finalize the central bank recapitalization plan promptly to strengthen its operational independence and financial autonomy.
- Recent approval of recapitalization plans of banks with capital shortages and the governance framework for the state-owned banks are important steps to address banking sector vulnerabilities.
- Institutional and governance recommendations:
- Persevere with the ambitious structural reform agenda to strengthen institutions, governance, and data quality.
- Continue capacity development support from the Fund and other development partners.
Program background
- Suriname’s EFF arrangement was approved by the Executive Board on December 22, 2021 (see Press Release No. 21/400).
- Since approval, Suriname has been implementing an economic reform agenda focused on:
- 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.
- Advancing the anti-corruption and governance agenda.
Source: Press Release No. 24/93, March 20, 2024, IMF Communications Department.