Suriname: Fifth Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Modification of Performance Criteria, Waivers of Nonobservance of a Performance Criterion, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Suriname

SURINAME IMFCountryReportNo.24/97 April2024 FIFTHREVIEWUNDERTHEEXTENDEDARRANGEMENTUNDERTHEEXTENDEDFUNDFACILITY,REQUESTSFORMODIFICATIONOFPERFORMANCECRITERIA,WAIVERSOFNONOBSERVANCEOFAPERFORMANCECRITERION,ANDFINANCINGASSURANCESREVIEW—PRESSRELEASE;STAFFREPORT;ANDSTATEMENTBYTHEEXECUTIVEDIRECTORFORSURINAME InthecontextoftheFifthReviewUndertheExtendedArrangementUndertheExtendedFundFacility,RequestsforModificationofPerformanceCriteria,WaiversofNonobservanceofaPerformanceCriterion,andFinancingAssurancesReview,thefollowingdocumentshavebeenreleasedandareincludedinthispackage: APressReleaseincludingastatementbytheChairoftheExecutiveBoard. TheStaffReportpreparedbyastaffteamoftheIMFfortheExecutiveBoard’sconsiderationonMarch20,2024,followingdiscussionsthatendedonFebruary10,2024,withtheofficialsofSurinameoneconomicdevelopmentsandpoliciesunderpinningtheIMFarrangementundertheExtendedFundFacility.Basedoninformationavailableatthetimeofthesediscussions,thestaffreportwascompletedonMarch6,2024. AStaffSupplementupdatinginformationonrecentdevelopments. AStatementbytheExecutiveDirectorforSuriname. TheIMF’stransparencypolicyallowsforthedeletionofmarket-sensitiveinformationandprematuredisclosureoftheauthorities’policyintentionsinpublishedstaffreportsandotherdocuments. Copiesofthisreportareavailabletothepublicfrom InternationalMonetaryFundPublicationServicesPOBox92780Washington,D.C.20090Telephone:(202)623-7430Fax:(202)623-7201 E-mail:publications@imf.orgWeb:http://www.imf.orgInternationalMonetaryFundWashington,D.C. ©2024InternationalMonetaryFund PR24/93 IMFExecutiveBoardCompletesFifthReviewUndertheExtendedFundFacilityArrangementforSuriname FORIMMEDIATERELEASE TheIMFExecutiveBoardcompletedthefifthreviewundertheExtendedFundFacility(EFF)arrangementforSuriname,allowingforanimmediatepurchaseequivalenttoSDR 46.7million(aboutUSD62million)ofwhichSDR19.1millionoraboutUSD25millionwouldbeforbudgetsupport. Theauthorities’continuedcommitmenttofiscaldisciplineandmacroeconomicstabilityispayingoff.Theeconomyisgrowing,inflationisonasteadydownwardtrend,andinvestorconfidenceisreturning. Theauthorities’near-termpriorityistomaintainfiscaldiscipline,whileensuringthatthepoorandvulnerableareprotected,andperseverewiththestructuralreformstostrengtheninstitutionsandimprovegovernance. Washington,DC–March20,2024:TheExecutiveBoardoftheInternationalMonetaryFund(IMF)completedthefifthreviewundertheExtendedFundFacility(EFF)arrangementforSurinameandgrantedawaiverfornonobservanceofaperformancecriterion.ThecompletionofthereviewallowstheauthoritiestodrawtheequivalentofSDR46.7million(aboutUSD62million),bringingtotaldisbursementtoSDR243.7million(aboutUSD323million). Suriname’sEFFarrangementwasapprovedbytheExecutiveBoardonDecember22,2021(seePressReleaseNo.21/400).Sincethen,Surinamehasbeensteadilyimplementinganambitiouseconomicreformagendaaimedatrestoringfiscalanddebtsustainabilitythroughfiscalconsolidationanddebtrestructuring,protectingthevulnerablebyexpandingsocialprograms,upgradingthemonetaryandexchangeratepolicyframework,addressingthefinancialsector’svulnerabilities,andadvancingtheanti-corruptionandgovernanceagenda. FollowingtheExecutiveBoarddiscussiononSuriname,Mr.KenjiOkamura,DeputyManagingDirector,andActingChair,issuedthefollowingstatement: “Theauthorities’commitmenttofiscaldisciplineandmacroeconomicstabilizationundertheEFF-supportedprogramispayingoff.Theeconomyisgrowing,inflationisonasteadydownwardtrend,andinvestorconfidenceisimproving.Near-termdownsideriskshighlighttheimportanceofmaintainingthereformmomentumtosecurehard-wongains. “Theauthorities’determinationtocarryoutpoliticallychallengingreformsiscommendable.Allquantitativeperformancecriteriaforthisreviewweremet,andstructuralreformsareproceeding,albeitwithsomedelays. 2 “Thenear-termpriorityistopreservefiscaldisciplinetoputpublicdebtonafirmlydownwardpathandbuildresiliencetofutureshocks.Theauthorities’commitmenttoremovingunregisteredandchronicallyabsentworkersfromthepublicpayrollwillhelpcreatefiscalspaceforamoremeaningfulwageincreaseforproductivecivilservants.Graduallyphasingoutelectricitysubsidieswillhelpfinancehighersocialassistancespendingandchannelmoreresourcestowardgrowth-enhancinginvestment.Ensuringtheefficientandeffectiveallocationofsocialspendingremainsparamount.Strongercommitmentcontrolstopreventtheaccumulationofsupplierarrearsisalsoapriority. “Noteworthyprogresshasbeenmadewithdebtrestructuring.Bilateralagreementswithallofficialcreditorshavebeencompletedandthedebtexchangewithprivateexternalbondholdershasbeenfinalized.Domesticdebtstothecentralbankandcommercialbankshavebeenrestructured.Thepriorityistopromptlycleardomesticdebtarrears. “Monetarypolicyissupportingdisinflation.Theauthorities’demonstratedcommitmenttoflexible,market-determinedexchangerateishelpingsupportaccumulationofinternationalreserves.Therecentapprovalofrecapitalizationplansofbankswithcapitalshortagesandthegovernanceframeworkforthestate-ownedbanksareimportantstepstowardaddressingbankingsectorvulnerabilities.Promptfinalizationofthec