{
  "title": "IMF Executive Board Concludes 2018 Article IV Consultation with Suriname",
  "publication": "IMF News, November 16, 2018",
  "sourceUrl": "https://www.imf.org/en/news/articles/2018/11/16/pr18432-suriname-imf-executive-board-concludes-2018-article-iv-consultation",
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  "summary": "On November 16, 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Suriname.",
  "publishDate": "2018-11-16",
  "sections": [
    {
      "heading": "Overview",
      "content": "- On November 16, 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Suriname.\n- Key summary findings:\n  - Suriname’s economy has stabilized and is expected to further improve.\n  - Real GDP grew by 1.7 percent in 2017 after two consecutive years of contraction, supported by higher gold production and a pickup in commodity prices.\n  - The unemployment rate has declined.\n  - Inflation has subsided to single digits as the exchange rate has stabilized.\n  - The current account deficit fell to almost zero in 2017 from its 2015 peak.\n  - Financial soundness indicators point to an improvement in the banking system, although important vulnerabilities remain.\n  - Recent indicators point to further improvements in economic activity in 2018.\n  - Real GDP growth is projected at 2 percent in 2018, followed by a gradual acceleration to 3 percent over the medium term.\n- Consultation focus:\n  - Policies to assure fiscal sustainability.\n  - Strengthen the monetary framework.\n  - Improve the resilience of the banking system.\n  - Boost potential growth through structural reforms."
    },
    {
      "heading": "Executive Board Assessment",
      "content": "- Directors agreed with the thrust of the staff appraisal and welcomed ongoing economic recovery underpinned by increased commodity exports.\n- Main concerns identified:\n  - Weak fiscal position and rising public debt.\n  - Underdeveloped monetary policy framework.\n  - Vulnerable banking sector.\n  - Heavy dependence on the mineral sector.\n- Directors encouraged using the current environment to build policy buffers, enhance resilience, and promote diversified and sustainable growth."
    },
    {
      "heading": "Policy recommendations and priorities",
      "content": "- Fiscal policy:\n  - Priority should be given to strengthening the fiscal position and reducing public debt.\n  - Recommended adjustment measures:\n    - Reducing energy subsidies.\n    - Containing the public wage bill.\n    - Implementing a broad‑based value‑added tax.\n    - Continuing to improve tax and customs administration.\n  - Strengthen the social safety net to protect vulnerable groups.\n  - Strengthen revenue administration, improve public financial management, and strengthen the public investment system.\n  - Adopt a fiscal framework focusing on the non‑resource primary balance to help safeguard long‑term fiscal sustainability.\n- Monetary policy and central bank:\n  - Current monetary policy stance considered broadly appropriate.\n  - Need for quick absorption of excess liquidity in the banking system.\n  - Strengthen the monetary framework by:\n    - Adopting reserve money targeting.\n    - Developing open market operations and standing facilities.\n  - Strengthen institutional and financial settings of the Central Bank.\n  - Maintain a flexible exchange rate to support adjustment to external shocks.\n- Financial sector:\n  - Develop a robust contingency plan and bank resolution framework to strengthen financial stability.\n  - Further strengthen the AML/CFT framework in line with the 2012 FATF standards to mitigate risks regarding the withdrawal of correspondent banking relationships.\n- Structural reforms:\n  - Focus on boosting productivity and diversifying the economy.\n  - Enhance the business climate and improve the environment for private investment.\n  - Invest in education and increase labor market flexibility while providing a meaningful safety net for the unemployed.\n  - Strengthening governance to support investor confidence and promote growth."
    },
    {
      "heading": "Economic projections and key statistics (Table 1: Suriname: Selected Economic Indicators)",
      "content": "- Real sector (Period average percentage change, unless otherwise indicated)\n  - Real GDP: 2016: -5.6; 2017: 1.7; 2018: 2.0 (Proj.); 2019: 2.2; 2020: 2.5; 2021: 2.1\n  - Nominal GDP: 2016: 20.6; 2017: 16.5; 2018: 11.6; 2019: 9.0; 2020: 8.7; 2021: 12.0\n  - GDP deflator: 2016: 27.7; 2017: 14.6; 2018: 9.4; 2019: 6.6; 2020: 6.1; 2021: 9.7\n  - Consumer prices: 2016: 55.5; 2017: 22.0; 2018: 7.5; 2019: 6.5; 2020: 5.7\n  - Consumer prices (end of period): 2016: 52.4; 2017: 9.3; 2018: 7.2; 2019: 6.7\n- Money and credit (End of period percentage change, unless otherwise indicated)\n  - Broad money (constant exchange rate): 2016: 5.9; 2017: 8.6; 2018: 7.6; 2019: 8.2\n  - Reserve money (constant exchange rate): 2016: 8.1; 2017: 22.2; 2018: 24.7; 2019: 12.7; 2020: 10.8; 2021: 14.1\n  - Reserve money (percent of GDP): 2016: 15.2; 2017: 16.0; 2018: 17.9; 2019: 18.5; 2020: 18.9; 2021: 19.3\n  - Private sector credit (constant exchange rate): 2016: -5.7; 2017: 0.9; 2018: -3.9; 2019: 2.9; 2020: 5.0\n  - Private sector credit (percent of GDP): 2016: 38.1; 2017: 33.1; 2018: 28.6; 2019: 27.4; 2020: 26.8; 2021: 26.2\n- Central government (Percent of GDP, unless otherwise indicated)\n  - Revenues and Grants: 2016: 17.6; 2017: 23.0; 2018: 22.7; 2019: 22.9; 2020: 25.0\n  - Expenditures: 2016: 23.9; 2017: 29.7; 2018: 30.2; 2019: 31.9; 2020: 32.0; 2021: 31.8\n  - Of which: Primary expenditures: 2016: 22.1; 2017: 25.9; 2018: 26.5; 2019: 28.0; 2020: 27.3\n  - Statistical discrepancy: 2016: -1.8; 2017: -1.3; 2018: 0.0\n  - Overall balance (net lending/borrowing) 1/: 2016: -8.1; 2017: -8.0; 2018: -7.5; 2019: -9.2; 2020: -9.0; 2021: -6.8\n  - Primary balance: 2016: -6.2; 2017: -5.0; 2018: -4.1; 2019: -5.2; 2020: -4.8; 2021: -2.3\n  - Non-resource primary balance: 2016: -9.4; 2017: -11.8; 2018: -12.3; 2019: -12.9; 2020: -12.5; 2021: -10.1\n  - Net acquisition of financial assets 2/: 2016: 13.1; 2017: 0.3; 2018: -9.8\n  - Net incurrence of liabilities: 2016: 21.2; 2017: 8.3; 2018: -2.4; 2019: 9.2; 2020: 6.8\n  - Net domestic financing: 2016: -2.7; 2017: 5.2; 2018: -1.5; 2019: 4.3; 2020: 2.6; 2021: 1.6\n  - Net external financing: 2016: 3.1; 2017: -0.9; 2018: 4.9; 2019: 6.4\n  - Public (central government) debt 3/: 2016: 78.5; 2017: 77.2; 2018: 69.8; 2019: 72.7; 2020: 77.3; 2021: 78.0\n    - Domestic: 2016: 21.1; 2017: 21.8; 2018: 22.6; 2019: 23.6; 2020: 23.1\n    - External: 2016: 57.4; 2017: 54.2; 2018: 48.0; 2019: 50.1; 2020: 53.7; 2021: 55.0\n- External sector\n  - Current account balance: 2016: -5.3; 2017: -0.1; 2018: -3.4; 2019: -2.5; 2020: -1.6\n  - Capital and financial account: 2016: 16.2; 2017: 5.8; 2018: 3.5; 2019: 3.7; 2020: 3.8\n  - Overall balance: 2016: 1.4; 2017: 0.1; 2018: 1.3\n  - Change in reserves (- = increase) 4/: 2016: -1.4; 2017: -3.7; 2018: -2.2\n- Memorandum items\n  - GDP at current prices (SRD billions): 2016: 19.7; 2017: 25.6; 2018: 27.9; 2019: 30.4; 2020: 34.0\n  - Terms of trade (percent change): 2016: 9.5; 2017: -3.2\n  - Gross international reserves (USD millions): 2016: 381; 2017: 424; 2018: 552; 2019: 555; 2020: 606; 2021: 700\n  - In months of imports: 2016: 2.3; 2017: 3.0\n  - Real effective exchange rate (percent change, + = appreciation): 2016: -12.6; 2017: -3.8\n  - Exchange rate (SRD per USD, period average): 2016: 6.2\n  - Exchange rate (SRD per USD, eop): 2016: 7.4\n  - Gold price (USD per troy ounce): 2016: 1,248; 2017: 1,257; 2018: 1,261; 2019: 1,218; 2020: 1,255; 2021: 1,304\n  - Oil price (USD per barrel): 2016: 42.8; 2017: 52.8; 2018: 69.4; 2019: 68.8; 2020: 65.7; 2021: 63.1\n- Notes from the table:\n  - Sources: Surinamese authorities; and IMF staff calculations and projections.\n  - 1/ The overall balance is computed using net financial transactions, and therefore, includes statistical discrepancy.\n  - 2/ Includes acquisition of stake in gold mine and loans to state-owned enterprises.\n  - 3/ The debt-to-GDP ratios are based on IMF's 2014 Government Financial Statistics Manual. They would be different if computed using the definition in the Government Debt Act of Suriname.\n  - 4/ Includes valuation changes."
    },
    {
      "heading": "Risks and vulnerabilities",
      "content": "- Fiscal risks:\n  - Large fiscal deficits and a projected rise in public debt unless strong fiscal consolidation is implemented.\n  - Slow pace of reforms and a recent step-up in current public expenditures could worsen the fiscal situation in 2019-2020.\n  - Public financial management framework remains weak, though authorities are taking steps to strengthen it.\n- Monetary and financial sector risks:\n  - Monetary framework lacks standard instruments.\n  - Pockets of vulnerability remain in the banking sector despite improvements since 2016.\n  - Need to guard against risks to correspondent banking relationships by strengthening AML/CFT in line with the 2012 FATF standards.\n- Structural concentration risk:\n  - Heavy dependence on the mineral sector, underscoring the need for diversification.\n\nIMF Executive Board Concludes 2018 Article IV Consultation with Suriname (Press Release No. 18/432, November 16, 2018).\n\n---\n\n\n References\n\n- Suriname and the IMF\n- IMF Policy Advice -- A Factsheet\n- Gold in the IMF -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2018/11/16/pr18432-suriname-imf-executive-board-concludes-2018-article-iv-consultation"
    }
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    "Published: November 16, 2018",
    "On November 16, 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Suriname.",
    "Key summary findings:",
    "Consultation focus:",
    "Directors agreed with the thrust of the staff appraisal and welcomed ongoing economic recovery underpinned by increased commodity exports.",
    "Main concerns identified:",
    "Directors encouraged using the current environment to build policy buffers, enhance resilience, and promote diversified and sustainable growth.",
    "Fiscal policy:",
    "Monetary policy and central bank:",
    "Financial sector:",
    "Structural reforms:",
    "Real sector (Period average percentage change, unless otherwise indicated)",
    "Money and credit (End of period percentage change, unless otherwise indicated)",
    "Central government (Percent of GDP, unless otherwise indicated)",
    "External sector",
    "Memorandum items",
    "Notes from the table:",
    "Fiscal risks:",
    "Monetary and financial sector risks:",
    "Structural concentration risk:",
    "[Suriname and the IMF](http://www.imf.org/external/country/SUR/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Gold in the IMF -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2022/gold-in-the-imf)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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