THE International Monetary Fund earlier this week warned that policy slippage in Suriname could jeopardise the benefits of its coming offshore oil boom, urging the country to restore fiscal and monetary discipline before production begins later this decade.

In its annual Article IV consultation with Suriname, the International Monetary Fund (IMF) said the country stands on the cusp of a transformative shift to large-scale oil production, but recent economic missteps have weakened macroeconomic stability at a critical moment.

Suriname’s oil ambitions are anchored in offshore discoveries in the Guyana-Suriname Basin, where recoverable resources are estimated in the billions of barrels, including around 750 million barrels at the GranMorgu project in Suriname’s waters, underpinning expectations that first production in 2028 could rapidly transform the economy if fiscal discipline and governance hold.

“Fiscal and monetary slippages in 2025 have eroded earlier stabilisation gains,” the IMF said, warning that credibility must be rebuilt ahead of the start of offshore oil output.

The Fund said earlier progress under a Fund-supported programme that concluded in March 2025 had been partly reversed as rising deficits, higher inflation and a weaker currency strained policy buffers.

Gross public debt rose to an estimated 106 per cent of GDP in 2025, driven largely by a liability-management operation, while inflation climbed back into double digits, reaching 13 per cent at end-2025. Government deposits at the central bank fell sharply, limiting the country’s ability to absorb shocks ahead of the oil windfall.

Economic growth slowed to 1.5 per cent in 2025, reflecting a decline in gold production, but is projected to rebound to 3.9 per cent in 2026, supported by oil-related investment and positive sentiment. Growth is expected to average around 4 per cent through 2028, before offshore oil production is forecast to push expansion to around 30 per cent.

However, the IMF cautioned that policy missteps could undermine investor confidence just as capital-intensive oil projects approach production.

The overall fiscal deficit widened to 10 per cent of GDP in 2025, from 2.4 per cent a year earlier, while the primary balance swung from surplus into deficit. The Fund said a “significant fiscal adjustment” will be required in 2026, including reducing electricity subsidies, restraining the public-sector wage bill, broadening the tax base and strengthening tax administration through digitalisation.

On the external front, the current account deficit exceeded 30 per cent of GDP, driven by oil-related imports financed largely by foreign direct investment. While such deficits are typical in pre-production oil economies, the IMF warned they increase vulnerability to shifts in global financing conditions.

The fund also urged Suriname to strengthen institutions ahead of the oil boom, calling for full implementation of public financial management reforms and recently passed Sovereign Wealth Fund legislation to ensure transparent management of future oil revenues.

Monetary policy should remain firmly focused on price stability, the IMF said, recommending tighter control of reserve money through open-market operations and limiting foreign-exchange intervention to cases of disorderly market conditions.

The IMF said it expects continued engagement with Suriname under its post-financing assessment framework, with the next Article IV consultation scheduled in 12 months.

— Dashan Hendricks