Suriname Meets With IMF to Discuss Successor Program Before Vote

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(Bloomberg) — Suriname government official are meeting with the International Monetary Fund to discuss frameworks for a second program after a prior $688 million agreement expired in March, according to its finance minister. 

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The previous IMF deal not only strengthened governance and brought down debt levels, but also helped create international trust and confidence in the tiny South American country — but it wasn’t enough to put the nation on a sustainable path for growth, Minister of Finance and Planning of Suriname Stanley Raghoebarsing said Thursday in Washington DC.

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“We need a successor program to be flexible, tailor-made and one that can win the support of the people,” Raghoebarsing said in an interview on the sidelines of the IMF and World Bank’s spring meetings. “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.”

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The nation of roughly 660,000 will head to the polls in May to elect the next government, which will ultimately decide whether to pursue a new deal with the multilateral lender. 

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The comments came as Suriname is on the verge of becoming a major energy producer, with its first oil production expected in 2028 to bring in as much as $26 billion for the country. Before then, the market is closely watching for signals from the incoming administration regarding its appetite for a successor IMF program. 

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The $4.5 billion economy is forecast to grow 3.2% in 2025 year, compared to 3% in 2024, according to the IMF, and overcoming a number of challenges. The government had set a primary budget surplus target of 2.7% of GDP for last year but due to drought and low non-tax revenues the government instead recorded a narrower surplus equivalent to 0.3% of GDP.

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‘More Relaxed One’

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The government finalized a debt restructuring in 2023 that included so-called value-recovery instruments that pay investors a portion of revenue from oil after it starts flowing. 

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The country’s sovereign bonds have handed investors a return of 3.1% this year, outperforming most emerging market peers, according to data compiled by Bloomberg.

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Through the recently completed three-year program, Suriname implemented a number of fiscal and economic measures, including adopting a restrictive monetary policy, that helped deliver single-digit inflation and bring down its debt-to-GDP ratio to 88% from 148%. 

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It’s also taken steps to restructure state-owned companies and an anti-money laundering agenda, Raghoebarsing said. Meantime, the country has amended laws related to the sovereign wealth fund to ensure revenue from oil discoveries will be available for future generations.

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Despite the progress, many of the reform measures have weighed on Suriname’s citizenry, of whom 17.5% live in poverty, said Raghoebarsing, who emphasized the need to have people’s support.

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“When we go for a successor program, it’ll definitely be a much more relaxed one,” he said. “We will have to change the narrative so that people do not suffer from reform fatigue.”

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