IMF and Suriname Reach Agreement on Final Economic Review under EFF

The IMF has reached a staff-level agreement on the final review of Suriname’s economic recovery program supported by the EFF, potentially granting access to USD 61.3 million. The program’s objectives have largely been achieved, though fiscal discipline remains a priority as elections approach. Key reforms are needed for governance and fiscal frameworks to manage oil revenues sustainably.

The International Monetary Fund (IMF) staff and Surinamese authorities have reached a staff-level agreement regarding the ninth and final review of the country’s economic recovery program, which is supported by the Extended Fund Facility (EFF). This agreement is contingent upon approval from the IMF’s Executive Board and would allow Suriname to access approximately USD 61.3 million (SDR 46.8 million).

Key successes of the reform program include positive economic growth, decreasing inflation, reducing public debt, enhanced central bank governance, and renewed investor confidence. Suriname’s immediate policy focus is on maintaining fiscal discipline as the elections approach, while also safeguarding vulnerable populations amid these changes.

Over the medium term, it is critical for Suriname to bolster governance and fiscal frameworks. This includes implementing new fiscal regulations to effectively manage oil revenues, ensuring sustainable and transparent practices that align with economic goals.

Discussions took place between the IMF and Surinamese authorities from February 5-14, led by Ms. Anastasia Guscina. At the conclusion, she reported that although all but one quantitative target was met, the government is actively pursuing measures to achieve a 2.7 percent primary surplus by 2025. Total disbursements after this review would reach SDR 430.7 million (about USD 565.4 million).

Ms. Guscina noted that, “Overall, spending on social protection has more than doubled…” addressing growing needs among the vulnerable. Additionally, structural reforms are necessary to ensure efficiency and transparency, especially as the energy sector evolves with incoming oil revenues.

Debt restructuring efforts have substantially progressed, enhancing investor confidence. An umbrella agreement with the Paris Club was signed for the next phase, and negotiations for remaining debts are ongoing. Suriname’s enhanced ratings by credit agencies and the reduction in international bond spreads signify the positive trajectory of its fiscal management.

The Central Bank of Suriname has maintained a stringent monetary policy, with successful monitoring of inflation targets and the enhancement of the foreign exchange market’s operations. A completed recapitalization of the Central Bank aligns with statutory requirements to ensure stability in financial systems.

The staff-level agreement between the IMF and Suriname marks an important milestone in the nation’s economic recovery, reflecting significant progress in various sectors. While Suriname’s growth and fiscal conditions are improving, continued vigilance is essential, particularly in governance and social support systems. The collaborative efforts between the IMF and Surinamese authorities illustrate a committed partnership aimed at sustainable and effective economic stewardship as Suriname navigates through the complexities of its recovery.

Original Source: www.miragenews.com