Suriname: Post-Financing Assessment Discussions-Press Release; and Staff Report

This paper presents Suriname’s post-financing assessment discussions. The authorities face the twin tasks of safeguarding macroeconomic stability and strengthening institutional frameworks to support the transparent and efficient management of the coming oil revenue. Reducing the fiscal deficit would help build confidence and, together with steadfast control over reserve money, would lower inflation. Fiscal consolidation would require broadening the tax base, improving revenue administration, and phasing out electricity subsidies. Spending can be more effectively allocated toward protecting the vulnerable against the effects of higher global energy prices through the social safety net while health and education investment should rise only gradually over the medium term. There is a pressing need to improve public financial management and procurement practices, strengthen governance and anticorruption frameworks, make the fiscal rule a binding institutional constraint, and operationalize the savings and stabilization fund law. For the central bank, improving the monetary policy framework and operationalizing the macroprudential toolkit would help bolster macroeconomic and financial stability.