LatinNews Daily - 19 May 2023

In brief: Suriname and IMF reach staff-level agreement

* The International Monetary Fund (IMF) has announced a staff-level agreement (SLA) with Suriname’s government, subject to approval by the IMF’s executive board, on the second review of Suriname’s economic reform programme supported by the 36-month extended fund facility (EFF). According to an IMF statement, upon completion of this review, Suriname will have access to some US$53m, bringing total programme disbursements to date to US$159m. The announcement follows a virtual and in-person mission with the Surinamese authorities which took place from 8-16 May. In its statement the IMF highlights the recent agreement-in-principle with bondholders on 4 May, a condition of which is that Suriname and the IMF reach an SLA by 15 June. In December 2021 President Chandrikapersad Santokhi had concluded negotiations on a US$688m EFF agreement with the IMF but this stalled last year. In its statement, the IMF projects that GDP growth will recover to 2.3% in 2023 and converge to the 3% potential next year, although real GDP is forecast to remain below levels registered prior to the coronavirus (Covid-19) pandemic until 2028. It also adds that fiscal consolidation and monetary tightening will facilitate a gradual decline in inflation to 36% by end-2023. The programme aims to achieve a primary surplus of 1.7% of GDP, “about half of what was envisaged in the first review, allowing the authorities to increase spending on social programmes and critical infrastructure”. In 2024, the programme targets a primary surplus of 3.5% of GDP.

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