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