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International Monetary Fund. Statistics Dept.
At the request of the Suriname authorities, a remote technical assistance (TA) mission took place during December 6–17, 2021. The mission was conducted in coordination with the IMF’s Western Hemisphere Department. The main objective of the mission was to assist the Ministry of Finance and Planning (MFP) and the Central Bank of Suriname (CBS) to improve the quality of the Government Finance Statistics (GFS) in view of the IMF program. The main tasks were to (i) conduct a diagnostic assessment of the current GFS and public debt compilation process,(ii) explain and reduce statistical discrepancies, (iii) analyze data on arrears and reassess their treatment in GFS, (iv) review the integration of stocks and flows of the gross debt; and (v) update the public sector institutional table, and (vi) deliver a workshop on GFSM 2014 framework and (PSDS).
International Monetary Fund. Statistics Dept.
A technical assistance (TA) mission on external sector statistics (ESS) was conducted in Paramaribo, Suriname, during March 2‒13, 2020. The mission was part of the Caribbean Regional Technical Assistance Centre (CARTAC) work program on ESS and was carried out in response to a request from the Central Bank of Suriname (CBvS). The mission reviewed estimates and coverage of the balance of payments and international investment position (IIP), which have been prepared in the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) format. In particular, the mission’s work mainly aimed at enhancing the coverage and the classification of (i) currency and deposits assets held abroad by the nonfinancial sector; (ii) insurance services, transport, travel account and trade credit and advances; (iii) offshore petroleum exploration companies; (iv) government external debt; and (iv) the use of business survey. Improvements in these key areas will facilitate a more robust assessment of external sector developments. Reliable ESS is essential for informed economic policy-making by the authorities and for IMF’s surveillance.
International Monetary Fund. Western Hemisphere Dept.
On December 22, 2021, the IMF Executive Board approved a 36-month arrangement under the Extended Fund Facility (EFF) with access of 366.8 percent of quota (SDR 472.8 million or USD 673 million). The Surinamese authorities’ homegrown economic recovery plan aims to address systemic fiscal and external imbalances and chart a course toward debt sustainability, declining inflation, and economic recovery while maintaining social stability. In the first few months of the program, the authorities have made good progress but important risks remain.
International Monetary Fund. Western Hemisphere Dept.
Suriname faces systemic fiscal and external imbalances as a result of many years of economic mismanagement. Usable foreign reserves were depleted and, in the absence of other sources of budget financing, fiscal deficits were monetized. Inflation has, as a result, surged and there has been a significant depreciation of the exchange rate. Public debt, at 148 percent of GDP at end-2020, is unsustainable. In addition, there are important solvency problems embedded in the domestic banking system.
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper on Suriname analyzes exchange rate pass through in Suriname. While the previous studies exclusively focused on the bilateral exchange rate against the US dollar, this study, in addition, estimates exchange rate passthrough using the nominal effective exchange rate. This is crucial given the strong presence of euros in the economy due to its historic connections with the Netherlands and French Guyana being one of its neighbors. The study is the first to investigate how various subcomponents of consumer price index respond to exchange rate variations differently for Suriname. The results suggest a cumulative exchange rate passthrough of around 0.4 (0.6) over six months and 0.6 (0.7) over one year for the entire sample of 1980-2019 (2000-19). A more systemic analysis suggests that the exchange rate passthrough has been declining and becoming more short-lived in recent years.
International Monetary Fund. Western Hemisphere Dept.
This 2019 Article IV Consultation with Suriname discusses that Suriname continues to grow steadily with low inflation. However, there has been little progress in implementing urgently needed fiscal reforms, and the fiscal position is likely to continue to weaken in the coming year. The consultation focused on policies to bolster the economy in the medium term. These include fiscal measures to enhance revenues and efficiency and lower expenditures, policies to improve the monetary and financial sector supervision frameworks, and structural policies to boost potential growth. Advances have been made in developing the central bank’s monetary tools and facilities; however, more is needed to strengthen the credibility of the monetary framework. The banking sector faces important downside risks and there are gaps in the central bank’s supervisory and resolution framework. It is advised to put the public debt on a sustainable path. A significant reduction in the fiscal deficit could be achieved by implementing a value-added tax, curtailing electricity subsidies except to the poor, and improving public financial management.
International Monetary Fund. Western Hemisphere Dept.
Suriname is recovering from the deep recession of 2015-16. Growth has turned positive, inflation has reduced to single digits, real interest rates have turned positive, and the external position has on balance strengthened. Nonetheless, the economy remains heavily dependent on the mineral sector, and faces fiscal, monetary, and banking sector vulnerabilities.
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues explores ways for strengthening the current fiscal framework in Suriname and considers options for a new fiscal anchor. The paper provides an overview of mineral natural resources and their importance for the budget. It also lays out the current framework for fiscal planning and budget execution in Suriname and discusses the analytical underpinnings of modernizing it to make it more robust. The paper also presents estimates of long-term sustainability benchmarks based on the IMF’s policy toolkit for resource-rich developing countries. Suriname’s fiscal framework can be strengthened through a fiscal anchor rooted in the non-resource primary balance. Given the size of fiscal adjustment required to bring the non-resource primary balance in line with the long-term sustainability benchmark, a substantial transition period is needed to implement it. The IMF Staff’s adjustment scenario—designed to put public debt on the downward path—closes the current gap by less than half, implying that adjustment would need to continue beyond the 5-year horizon.
International Monetary Fund. Statistics Dept.
This Technical Assistance Report on Suriname constitutes technical advice provided by the staff of the IMF to the authorities of Suriname in response to their request for technical assistance. The mission discussed issues concerning the consumer price index (CPI), the producer price index (PPI) and export price index (XPI). On the CPI, the mission reviewed current practices and provided some recommendations. The main recommendations are to switch from a Dutot to a Jevons index on the elementary aggregate level and to start publishing the CPI according to the Classification of Individual Consumption according to Purpose on a class level provided the number of items permits. On the planned PPI and XPI, the discussion focused on available data sources and next steps for developing a PPI for Suriname. Reliable price statistics are essential for informed economic policymaking by the authorities. They also provide the private sector, foreign investors, rating agencies, and the public in general with important inputs in their decision-making, while informing both domestic economic policy and IMF surveillance.