Suriname officials are in talks with the IMF for a new economic program following a $688 million agreement that expired. Finance Minister Stanley Raghoebarsing emphasized the need for a flexible plan ahead of upcoming elections. The country is poised for economic growth with anticipated oil production expected to generate substantial revenue, but public support remains essential for the success of any new agreements.
Suriname is currently in discussions with the International Monetary Fund (IMF) regarding the framework for a successor program. This follows the expiration of a previous $688 million agreement in March, as noted by the country’s Finance Minister, Stanley Raghoebarsing. The government is seeking a new plan as they prepare for May elections, which will determine their economic pathway moving forward.
In an interview during the IMF and World Bank’s spring meetings in Washington D.C., Raghoebarsing highlighted the necessity of a customized program that resonates with the public. “We need a successor program to be flexible, tailor-made, and one that can win the support of the people,” he stated. This sentiment reflects the broader political context as various parties will soon face voters, all of whom will have to weigh the importance of a continued alliance with the IMF.
Suriname boasts a population of about 660,000 and is on the brink of a significant economic shift, with oil production expected to kick off in 2028. This development could potentially generate up to $26 billion in revenue. The current administration is keen to signal commitment to a successor program to instill investor confidence amidst the upcoming political shift.
Forecasts indicate that Suriname’s economy, valued at $4.5 billion, is set to grow by 3.2% in 2025, following a 3% growth rate projected for 2024. The government has faced recent challenges, including a narrower-than-expected budget surplus last year due to adverse weather conditions. These economic hurdles underscore the necessity for strong governance.
In 2023, Suriname undertook a debt restructuring effort that involved innovative financial instruments linked to future oil revenues. The country’s financial performance has been relatively strong, with sovereign bonds returning 3.1% in 2023 and outperforming peers in the emerging market sector, as per Bloomberg’s data.
The previous IMF agreement played a crucial role in stabilizing the economy, significantly lowering the debt-to-GDP ratio to 88% from 148%. Raghoebarsing confirmed that successful implementation of fiscal policies, including a strict monetary approach, has curbed inflation. However, despite these successes, challenges remain; a significant portion of the population continues to live in poverty, necessitating broad public support for future reforms.
Raghoebarsing concluded on a hopeful note, expressing the need to revise their communication strategies regarding reforms. “When we go for a successor program, it’ll definitely be a much more relaxed one,” he stated, emphasizing the importance of addressing reform fatigue among citizens.
The Surinamese government is actively negotiating with the IMF for a successor program following the expiration of a previous agreement. With elections on the horizon, the need for a flexible and publicly supported program is crucial. As the nation anticipates significant oil revenues, the relationship with the IMF could determine its economic trajectory amidst ongoing socio-economic challenges and public sentiment.
Original Source: financialpost.com
