Suriname at Historic Crossroads

• According to the International Monetary Fund (IMF), Suriname is at a historic crossroads. In its latest Article IV report, the IMF welcomed the progress achieved under its program, concluded in March 2025, while noting that recent fiscal and monetary slippages have eroded earlier stabilisation gains at a time when Suriname approaches a pivotal transition to large‑scale oil production. The development of this new resource has the potential to generate significant improvements in living standards, but to do so, action is needed to build the institutions to manage these wealth gains; improve health, education and social outcomes; invest in infrastructure; and preserve macroeconomic stability.
• According to the IMF, GDP growth is slowing in Suriname, driven by a decline in gold production, and inflation has reversed its downward path. Gold production declined by 8% in 2024 and continued to disappoint in the first half of 2025. On the other hand, the growth of the non-natural resource economy was estimated at above 4% in 2024 and is expected to maintain a robust expansion. Inflation rose to 10.9% in October, largely due to sizable depreciation triggered by fiscal and monetary slippages.
• Nevertheless, economic activity is expected to remain solid. Non-natural resource growth is estimated to reach 4.7%in 2026, supported by positive oil-related sentiment. Activity related to the development of new offshore oil fields and relatively stable gold production is expected to keep GDP growth around 4% in 2026-27, according to the IMF. Furthermore, in 2028, offshore hydrocarbon production is expected to come online, pushing growth to around 30%.
• That said, progress on fiscal consolidation has reversed. The primary balance amounted to -1.1% of GDP in August, and supplier arrears grew by 1.75%. Expenditure rose significantly before the May election, unwinding a significant portion of the fiscal adjustment that was undertaken as part of Suriname’s IMF-supported program. There has also been insufficient effort by the new government to change course.
• Under its current policy, the IMF projects a primary balance of around 0% of GDP in 2026-27 as one-off expenditures from 2025 are not expected to be repeated, though lower than the targeted primary surplus of 2.7%. Consequently, additional measures to achieve fiscal consolidation are urgently needed. Faster consolidation would help restore cash buffers, improve confidence, and help retain regular market access. Limiting spending would also help contain the ongoing injection of local currency liquidity, bring inflation down to around 5%, and help anchor expectations. Fiscal prudence would also help build buffers against downside risks.
• Suriname’s socio-economic and political landscape may also constrain reforms. Of note, social vulnerabilities persist due to significant leakages in benefit programs and difficulties in reaching rural and interior populations. The new government, which took office in July 2025. intends to build on reform progress but is facing political and social pressure to relax fiscal policy and increase spending to address social and developmental needs.
• Overall, there remain important near-term downside risks to the outlook. Policy slippages in the coming two years have the potential to adversely affect macroeconomic stability. A renewed drought would again increase the cost of electricity generation, adding to the fiscal deficit and inflation. Finally, higher global food prices could also increase import inflation, while a decline in gold prices (or further declines in gold production) would undermine exports. These would result in lower fiscal revenues and constrain overall growth.

(Source: IMF)