Suriname Engages IMF for Successor Economic Program Ahead of Elections

Suriname is in talks with the IMF for a new economic program after a previous $688M deal expired. Finance Minister Raghoebarsing stresses the need for a program that is adaptable and has public support, especially ahead of elections. Economic growth is forecasted amid challenges, including poverty and recent debt restructuring efforts.

Suriname is currently in discussions with the International Monetary Fund (IMF) regarding the establishment of a new economic program. Following the expiration of a previous agreement worth $688 million in March, the government seeks to create a successor framework. Finance Minister Stanley Raghoebarsing stated these talks are crucial, especially given upcoming elections set for May, where the newly elected government will determine future cooperation with the IMF.

Minister Raghoebarsing underscored the importance of a successor program that is adaptable and resonates with the population’s needs. He noted, “No matter what the outcome will be of the elections over the whole political scale, politicians will be sensitized on the importance of continuation of what was done with the IMF.” These comments were made during the IMF and World Bank’s spring meetings in Washington, D.C.

Suriname is on the cusp of significant economic change, with the first oil production slated for 2028, potentially yielding as much as $26 billion for the nation. This forthcoming production raises questions about the new administration’s willingness to engage with the IMF and sustain previous reforms aimed at economic stability.

The IMF forecasts a growth rate of 3.2% for Suriname’s $4.5 billion economy in 2025, with recovery expected from the challenges faced in previous years. Last year, the government aimed for a primary budget surplus of 2.7% of GDP but only managed a modest surplus of 0.3% due to adverse conditions like droughts and reduced non-tax revenues. Recently, the government also completed a debt restructuring plan, which notably included a revenue-sharing component tied to future oil production.

The Suriname government has implemented notable reforms during the past three years, such as adopting a tighter monetary policy that resulted in single-digit inflation and reducing the debt-to-GDP ratio from 148% down to 88%. Minister Raghoebarsing also emphasized improvements in governance by restructuring state-owned enterprises and advancing an anti-money laundering agenda. Additionally, they have revised laws concerning the sovereign wealth fund to secure future oil revenues for generations to come.

Despite these advancements, the nation continues to face societal challenges, with 17.5% of its population living in poverty. Raghoebarsing stressed that supporting citizens is essential as they move forward with economic strategies, stating, “When we go for a successor program, it’ll definitely be a much more relaxed one. We will have to change the narrative so that people do not suffer from reform fatigue.” This acknowledgment reflects the delicate balance needed between economic reforms and societal impact.

Suriname’s discussions with the IMF are pivotal, especially with elections on the horizon. The government’s goal is to establish a flexible successor program that garners public support, particularly as the country prepares for significant oil production in the future. Despite past successes in governance and economic reforms, the challenges of poverty and public sentiment remain critical as officials navigate this crucial period.

Original Source: financialpost.com