Staff Concluding Statement of the 2025 Article IV Mission

Paramaribo: As Suriname celebrates 50 years of independence, it finds itself at a critical juncture. In recent years, it had commendably restored macroeconomic stability and significantly improved its institutional frameworks for macroeconomic policymaking. At the eve of a significant oil boom, the authorities’ task is to act now to lay the groundwork and build the institutions needed to fully harness the country’s newly found oil wealth. Doing so successfully will ensure these precious resources are used efficiently and productively to materially improve people’s livelihoods. As these resources are being developed in the coming years, it will be essential to maintain a prudent fiscal-monetary policy mix, improve governance, and strengthen institutional capacity. The new government, which took office in July 2025, recognizes that such a reform package is necessary to improve the country’s health, education, safety, infrastructure as well as diversification (for example through tourism and agriculture), entrepreneurship, and growth potential.

Growth has been decent and is expected to continue at around 2-3 percent in the next few years. During the course of this year, gold production has been disappointing but, going forward, economic activity is expected to be increasingly supported by the development of the Block 58 oil project. The field development is, though, import intensive, and a large current account deficit is expected in 2026-28, financed by FDI inflows. Foreign exchange reserves coverage remains adequate as insurance against external shocks. Block 58 oil is expected to start in 2028 leading to a doubling of real GDP by 2030.

Macroeconomic stability is being eroded. After primary surpluses in 2022-2024, the fiscal position has worsened and is expected to record a primary deficit (on a cash basis and excluding a necessary central bank recapitalization) of about 1 percent of GDP in 2025 but with a sizable increase in suppliers’ arrears. This pre-election fiscal expansion has caused a significant reduction in the government’s cash balances and the resulting injection of liquidity has put pressure on the exchange rate. These factors and the fiscal boost to demand have increased inflation (from around 6 percent earlier in the year to over 10 percent). Furthermore, monetary aggregates have been allowed to grow faster than the central bank’s reserve money targets since late 2024 and the central bank has been intervening to moderate the currency depreciation.

The authorities conducted a successful liability management operation. The transaction was centered around the issuance of US$ 1.575 billion in 5- and 10-year Eurobonds. The proceeds financed a cash tender offer for some existing 2033 Eurobonds and the remainder are being held in an overseas escrow account to be used to buy back outstanding 2033 Eurobonds and some or all of the oil-linked value recovery instruments. These resources could also be used to prepay bilateral debt and will finance some interest payments on the new Eurobonds. The operation shores up the financing needed to service debt until after Block 58 oil revenues begin to flow in.

There is an urgent need to improve the fiscal balance in 2026-7. Staff projects a primary balance of around 0 percent of GDP in 2026. A larger and more credible consolidation, underpinned by clear policy measures, would reduce depreciation and inflationary pressures and help the central bank to meet its monetary goals. In turn, this would preserve purchasing power and help businesses operate. Such improvements would also create buffers against future downside risks (for example, a 25 percent decline in gold prices, which could reduce fiscal revenues by 2 percent of GDP).

The government’s fiscal plan should be consistent with the recently legislated fiscal frameworks. A five-year fiscal plan should be submitted to the National Assembly, alongside the 2026 budget, with both annual spending ceilings and a target for debt (net of Savings and Stabilization Fund assets), this year. While there are pressing spending needs in education, health, roads, electricity, and water and sanitation, spending limits should be raised only gradually to allow for an improvement in the government’s capacity to effectively execute such spending. Suriname should strengthen its public investment management practices and implement its Public Financial Management Priority Action Plan. The Savings and Stabilization Fund Suriname needs to be operationalized.

Electricity subsidies should be removed to provide the resources needed to fund social assistance and growth-enhancing investments. In particular, the automatic link between tariffs and the costs of electricity production established in 2024 should be restored and electricity prices should continue rising towards cost-recovery. Even though social assistance outlays have doubled over the past few years there are significant leakages. To address this, the authorities are reviewing the existing social programs to free up resources to expand coverage and raise the adequacy of benefits. Moreover, consideration could be given to using the resources freed by the debt operation to reduce the stock of supplier arrears.

Revenue administration needs strengthening and there is scope to raise excise taxes. The authorities’ plan to transition to a Semi-Autonomous Revenue Authority will help improve revenue collection. The high international price of gold may have increased smuggling and there is scope to step up enforcement to ensure small-scale gold miners fully pay their tax obligations. Excise taxes are low by international standards and should be increased and applied to a broader range of products.

There is an urgent need to strengthen transparency and anticorruption controls ahead of the surge in hydrocarbon revenues. The new procurement law should be implemented immediately. It requires the publication of all tenders, procurement contracts, names of the awarded entities and their beneficial owners, and the names of the public officials awarding the contracts. It also requires ex-post validation of the delivery of the contracted service. The amendment to the anti-corruption law—to mandate the declaration of income and assets of politically exposed persons, to require verification and publication of these declarations, and to establish dissuasive sanctions for non-compliance—should be passed by the parliament and then promptly implemented.

State-owned enterprises need to be subject to stronger safeguards. The financial operations of SOEs are not transparent and there is an urgent need to establish a timely collection of the data necessary to assess the financial performance of these enterprises. Non-performing enterprises should be either closed or sold and, for the remainder, there should be a broader roadmap to improve service delivery and safeguard public resources.

Monetary and exchange rate policy needs to refocus on reserve money targets to preserve price stability. The central bank should establish clear reserve money targets for the coming year and should endeavor to meet these goals by undertaking open market operations, regardless of the interest costs of sterilization. The central bank should eliminate interest rates ceilings to allow rates to be determined by the market to meet targets and improve monetary transmission. Transmission will also be aided by the ongoing phase out of the issuance of central bank certificates. Foreign exchange intervention should be used only in response to disorderly market conditions, which should be more narrowly defined. Foreign exchange regulations including the role played by the Foreign Exchange Commission should also be reviewed.

Efforts to improve central bank operations and institutional capacity are welcome. A monetary policy committee should be formed to institutionalize monetary policy decision making. The central bank should publish a Monetary Policy Statement following policy decisions and a quarterly Monetary Policy Report to increase public understanding of their actions. The analytical framework should work to better integrate data (including the planned extension of existing surveys of expectations of inflation and other key macroeconomic variables) and improve forecasting. There is scope to improve high-level coordination between the central bank and the Ministry of Finance and Planning. There should also be a clear strategy to transition to an interest-based framework including through the introduction of a central bank deposit facility and the development of an interbank market.

Internal risk management practices of the banks need to be strengthened. Credit growth has been fast and there is a need to more closely monitor banks’ internal risk management systems to ensure their underwriting activities are prudent, limits on net open FX positions are respected, and banks are accurately classifying loans. A comprehensive credit registry would help track the financial position of borrowers and reduce data gaps. The framework for bank resolution should be quickly operationalized and contingency plans should be developed to better react to downside scenarios. The central bank should be ready to provide liquidity to banks but undercapitalized banks that lack viable financial plans should be quickly resolved.

The authorities can help improve the business environment. Institutional reforms to manage the oil boom are a critical precursor to addressing developmental challenges. However, a key constraint identified by exporters and investors is government and regulatory inefficiency, especially bureaucratic delays. More generally, international experience suggests structural reforms, such as improvements in human and physical capital and the regulatory environment, bring larger benefits than industrial policies such as special economic zones.

The IMF team is grateful to the Surinamese authorities and other counterparts for the productive discussions and hospitality during the mission.