Suriname’s IMF Successor Program Hinges on May Election Outcome

Suriname’s economic trajectory hinges on the outcome of its May 25 legislative elections, as the government seeks to finalize a successor program with the International Monetary Fund (IMF) following the conclusion of its Extended Fund Facility (EFF) arrangement in March 2025. The IMF’s support is critical for the country’s fiscal stability, debt management, and preparations for offshore oil revenues expected to begin flowing in 2028. However, political uncertainty and the need for reforms complicate the path forward.

The Current IMF Program’s Conclusion

Suriname’s three-year EFF program, approved in December 2021, concluded with a final review on March 24, 2025. The IMF approved a final disbursement of $62 million, bringing total disbursements under the program to $572 million. Key achievements included declining inflation (to 8.7% in 2025 from 54.6% in 2022) and reduced public debt (to 92.1% of GDP in 2024 from 115.1% in 2022). However, the program faced challenges, including a missed fiscal target for end-2024 due to overspending on subsidies and drought relief. The IMF granted a waiver for this shortfall, acknowledging corrective measures such as revised budget plans.

Successor Program Terms and Challenges

Discussions for a successor program focus on maintaining fiscal discipline, strengthening governance, and preparing for oil wealth. Key terms under negotiation include:
- Fiscal Rules: Operationalizing a Savings and Stabilization Fund to manage oil revenues transparently.
- Debt Sustainability: Finalizing debt restructuring with commercial creditors and ensuring adherence to fiscal surplus targets (2.7% of GDP for 2025).
- Social Spending: Doubling social protection spending as a share of GDP while phasing out electricity subsidies.

The program’s success depends on Suriname’s ability to address governance gaps, such as anti-corruption reforms and lifting its suspension from the Extractive Industries Transparency Initiative (EITI).

The Role of the May 25 Elections

The legislative election, Suriname’s first under a new proportional representation system, is the linchpin for the IMF’s successor program. The outcome will determine the political stability and policy direction of the new government. Finance Minister Stanley Raghoebarsing has emphasized that the program must be “flexible and win the support of the people.”

The IMF projects 3% GDP growth for 2025, but this hinges on post-election reforms. A government committed to fiscal discipline could attract investor confidence, while political fragmentation could delay reforms and jeopardize IMF support.

Risks and Considerations for Investors

• Political Uncertainty: The election’s outcome could lead to shifts in fiscal priorities, affecting debt management and oil revenue plans.
• Oil Dependency: While offshore oil reserves (estimated at $26 billion) offer long-term growth, mismanagement of windfall revenues could destabilize the economy.
• Debt Vulnerabilities: Despite progress in restructuring, Suriname’s debt-to-GDP ratio remains high, requiring strict adherence to fiscal rules.

Conclusion: A Delicate Balancing Act

Suriname’s future hinges on the new government’s ability to balance IMF requirements with domestic needs. The IMF’s successor program, if approved post-election, could stabilize the economy and position Suriname to benefit from oil revenues. However, risks remain:

• Economic Data: The IMF’s March 2025 review noted that inflation has been reduced to 8.7%, but public debt remains elevated at 92.1% of GDP.
• Investor Sentiment: show a decline to historic lows, reflecting improved confidence. A stable post-election government could further lower yields.
• Oil Revenues: With FID (Final Investment Decision) secured for 2028 oil production, Suriname must establish robust fiscal frameworks to avoid the “resource curse.”

Investors should monitor the election outcome and post-vote negotiations closely. A government committed to IMF reforms and fiscal prudence could unlock Suriname’s potential, while political instability or fiscal slippage could derail progress. The path forward is clear—now the test is whether Suriname’s leaders can seize it.