IMF team praises authorities’ policies during the 2013 consultation visit

The IMF team working on Suriname has just completed the visit for its annual consultation process. The team noted the high quality and openness of the discussions and the remarkable progress that Suriname has achieved in the last 3 years to maintain strong and stable growth and modernize its public sector.

The IMF team noted that the strong economic growth that Suriname has experienced in recent years is likely to continue in 2013, but would decelerate somewhat in 2014 as the fall in oil and gold prices would reduce income and demand.

They noted that the falling gold and oil prices, the large public sector wage increase, and increases in other expenditure categories had created a fiscal problem since late-2012. The IMF team agreed that the fiscal measures being put in place by the government were necessary to maintain the stability and growth momentum of the economy. They also remarked that monetary policy is currently appropriate and welcomed the Central Bank’s cautionary policy stance, as the CBvS stands ready to tighten its policy if it becomes necessary to protect the stability of the economy.

The team praised the authorities for the planned introduction of a modern Sovereign Wealth Fund, which will help stabilize the volatile fiscal revenue, minimize the shocks that Suriname experiences from oil and gold price changes on world markets, and generate long-term savings for the country. They suggested adding additional fiscal rules that would create a long-term anchor for the budget and the economy.

The IMF team welcomed the ongoing efforts to strengthen the regulatory framework, particularly in the monetary and financial sectors. The noted the progress to put in place a comprehensive reform of the budget preparation and execution process, the reform at the Customs administration, and the comprehensive tax reform being prepared. They also welcomed the authorities’ plans to establish indirect instruments of monetary policy, and praised the progress in the authorities’ substantial agenda to upgrade the resilience of the financial sector. They also noted that authorities have already made important steps to create a more supportive business environment that would enhance growth prospects.

Click here for the full statement of the IMF team