(de Ware Tijd) PARAMARIBO — The Central Bank of Suriname (CBvS) takes warnings by the International Monetary Fund (IMF) seriously especially since the government’s revenues have dwindled while the expenditures are soaring.
In response to the recently issued IMF report the bank states that it will continue to encourage the government to curb its expenditures as part of the macro stability aimed at. The government should impose better planning and fiscal financial accountability. The subsidy regime should be subject to drastic analysis and government enterprises should be made profitable allowing them to operate without financial support from the State.
The government should also prioritize investment projects, but only carry out these projects when there is certainty about the finances and the manner in which they will be realized. The bank understands the importance of revenue-increasing measures, but it warns to prevent making the average man a victim of this. The government needs long term fiscal consolidation and institutional strengthening. It is imperative that the government gradually becomes less dependent of the export revenues from the mining industry and instead introduce more diversification.
Extra revenues from the mining industry should not be consumed but saved to create buffers for extra vulnerable groups in society. The government should also refrain from spending the savings, because it will be the only way for future generations to enjoy the current wealth, the bank warns. The bank official is happy the Ministry of Finances has taken steps towards automation of the financial management process.
Recently the bank has tightened its monetary policy because credits from private banks were soaring. The growth of bank credits to the private sector was far more than the economic growth and also too one-sided. Most loans went to trade and housing. The bank says it will not hesitate to take additional measures if the fiscal situation and growth in credits do not stabilize to acceptable levels. Monetary officials feared the economy was heading towards overheating through unbearable debts and high exchange rates. The bank aims at boosting confidence in the Surinamese currency and to keep the exchange rate stable.