In a matter of a few months after the French oil company, TOTAL positive news about the company’s intention to undertake ‘near-term’ development studies for “a large oil project offshore the country”, which the company says is scheduled to commence before year end, the International Monetary Fund (IMF) has ‘chimed in’ with more encouraging news about the state of the South American country’s still fragile but seemingly improving economy. The Stabroek Business has seen a copy of a Monday December 4 media release issued by an International Monetary Fund (IMF) Staff Team that visited Paramaribo recently and which has declared that “fiscal discipline and tight monetary policy are bearing fruit in restoring macroeconomic stability. The economy is growing, inflation is coming down, and investor confidence is returning.”
The IMF assessment of the state of Suriname’s economy comes amidst studies being done by TOTAL ahead of what has been described as a “ground breaking $9 billion investment plan to process 700 million barrels of oil discovered off Suriname’s coast”. The project reportedly aims to commence producing 200,000 barrels of oil per day in 2028 and is seen as having the potential to transform the country’s economic landscape. The administration of Suriname’s President Chan Santoki could hardly have been more pleased with the IMF’s Report Card. Whereas a mere matter a of one month prior to the announcement by TOTAL of its multi-billion investment in Suriname’s oil sector, the country was beginning to show signs of public concern over the condition of the country’s economy. The IMF report indicated that the authorities in Paramaribo had already signaled its intention “to use some of the dividends from increased stability to expand social assistance programs for the poor and vulnerable, modestly increase real public sector wages for registered civil servants, and raise spending on growth-enhancing infrastructure.”
The release disclosed that the visiting IMF Team conducted both “virtual and in-person discussions with the Surinamese authorities” arising out of which the conclusion was reached that Suriname’s “Programme Performance” had been “strong,” and that “all performance criteria for this review were met.” Further, it said that the visiting IMF team “support the authorities’ request for an increase in IMF support to Suriname (of SDR 46.8 million or about US$ 63 million) and an extension of the program to March 2025. This would raise IMF support for Suriname to around US$ 650 million,” the release added. “Upon completion of this review, Suriname will have access to SDR 39.4 million (about USD 53 million), bringing total program disbursements to date to SDR 197 million (about USD 263 million),” the release added.
Asserting that the efforts of the authorities in Paramaribo to stabilize the economy are bearing fruits “growth is projected at around 2 percent in 2023, inflation is on a downward trend, and usable international reserves have reached almost 5 months of imports.” It adds that “prudent fiscal and monetary policies are expected to bring inflation to below 20 percent by end-2024,” though it cautions that the authorities face what it describes as “near-term risks, including policy implementation challenges stemming from a more challenging socio-political climate and capacity constraints,” adding that “over the medium to long term, there are significant upside risks to growth due to the development of large new oil fields.”
