The International Monetary Fund (IMF) says it will provide Suriname with US$55 million after the Dutch-speaking Caribbean country had completed the first review of the extended arrangement under the Extended Fund Facility (EFF).
Suriname’s 36-month EFF arrangement was approved by the IMF last December totaling US$688 million.
The Washington-based financial institution said the program aims to support Suriname’s authorities’ home-grown recovery plan to restore fiscal sustainability through a discretionary fiscal consolidation of ten percent of gross domestic product (GDP) during 2021-24, as well as to protect the vulnerable by expanding social safety net programs.
It is also intended to reduce public debt to sustainable levels, upgrade the monetary and exchange rate policy framework, stabilize the financial system, strengthen institutional capacity to tackle corruption and money laundering and improve governance.
“The authorities’ recovery program is on track despite difficult social and economic conditions. The economy is showing signs of a nascent recovery, on the back of comprehensive reforms to address systemic fiscal and external imbalances,” said Kenji Okamura, the IMF’s Deputy Managing Director, and Acting Chair.
He said the authorities remain committed to fiscal consolidation while further strengthening the social safety net.
“Planned revenue and expenditure measures, including on social spending programs, will be crucial to strengthen public finances while protecting the most vulnerable.”
Okamura said the authorities are also advancing debt restructuring negotiations with private and official bilateral creditors and the envisaged debt relief, together with fiscal consolidation, are important for Suriname to restore debt sustainability.
“The Central Bank of Suriname is committed to achieving a downward path for inflation and maintaining a market-determined exchange rate. Together with the program’s catalytic effect on external financing, this will help address external imbalances and build up foreign reserves.”
He said proactive steps have also been taken to address vulnerabilities in the banking system and structural reforms to strengthen capacity, governance, and data quality are key priorities.
“The authorities are taking important measures to strengthen central bank governance and the anti-corruption and AML/CFT frameworks. Technical assistance provided by the IMF and other development partners plays a critical role in developing institutional capacity.
“The IMF-supported program continues to face considerable risks, both domestic and external. Strong ownership and steadfast implementation of the economic program, together with continued support from the international community, will be essential for its success,” Okamura added.
CMC/
