KINGSTON, Jamaica — The International Monetary Fund (IMF) has urged Suriname to reset fiscal and monetary policy after warning that recent slippages have eroded hard-won stabilisation gains, pushing public debt above 100 per cent of GDP just as the country approaches a potentially transformative offshore oil boom.

In concluding its 2025 Article IV consultation, the IMF said fiscal and monetary lapses last year weakened the currency, drove inflation back into double digits and depleted government cash buffers, reversing progress made under a Fund-supported programme that ended in March 2025.

Gross public debt is estimated to have risen to about 106 per cent of GDP, largely reflecting a liability-management operation, while inflation climbed back into double digits and foreign-exchange pressures intensified, the Fund said.

“Suriname is approaching a pivotal transition to large-scale oil production,” the IMF noted, adding that renewed commitment to credible macroeconomic policies and stronger institutions is essential to avoid repeating past boom-bust cycles.

Economic growth has slowed as gold production declined, with real GDP expanding by an estimated 1.5 per cent in 2025. While non-resource activity remains relatively resilient — projected to grow 4.7 per cent in 2026 — macroeconomic imbalances have widened sharply.

The IMF estimates the current account deficit exceeded 30 per cent of GDP in 2025, driven by imports linked to offshore oil development. That deficit is expected to deepen further in the near term as investment ramps up, even as foreign direct investment finances much of the gap.

Growth is forecast to average around 4 per cent through 2028, supported by oil-field development and stable gold output, before offshore oil production is expected to lift growth dramatically — potentially to around 30 per cent in the first year of production.

But the Fund cautioned that those upside prospects heighten the cost of policy mistakes in the present.

IMF executive directors stressed that improving the fiscal balance is critical to contain inflation and foreign-exchange pressures and rebuild buffers. While recent debt operations have provided short-term liquidity relief, the board said significant fiscal adjustment in 2026 will be needed to restore confidence.

Recommended measures include resuming electricity subsidy reductions, restraining the public-sector wage bill, broadening the tax base and strengthening tax administration through digitalisation — while protecting priority spending on human capital.

The IMF estimates Suriname’s overall fiscal deficit widened to about 10 per cent of GDP in 2025, from 2.4 per cent the year before, reflecting higher spending and central bank recapitalisation costs.

On the monetary side, the Fund urged authorities to re-anchor policy firmly around price stability, recommending that reserve money be brought back to target through open-market operations. Directors supported plans to transition to a new monetary policy framework and encouraged efforts to strengthen the central bank’s technical capacity.

They also underscored the importance of exchange-rate flexibility, advising that foreign-exchange intervention be limited to narrowly defined episodes of disorderly market conditions.

With offshore oil production expected to reshape Suriname’s economy later this decade, the IMF placed heavy emphasis on governance and institutional reform. Directors called for full and timely implementation of recently passed public financial management and sovereign wealth fund laws to ensure transparent handling of future oil revenues.

They also urged amendments to anti-corruption legislation, operationalisation of the procurement law, stronger oversight of state-owned enterprises and further reinforcement of the country’s anti-money-laundering framework.

“The oil boom represents a major opportunity — but only if institutions are strong enough to manage it,” the IMF said.

The Fund said it expects to remain closely engaged with Suriname under its post-financing assessment framework, with the next Article IV consultation scheduled on the standard 12-month cycle.