WASHINGTON (Reuters) - The International Monetary Fund said on Monday it reached a staff-level agreement with Suriname on the policy reforms for the first review of the South American country's $688 million loan program.
"Despite difficult social and economic conditions, which have been exacerbated by the COVID-19 pandemic, Suriname’s homegrown economic recovery program is on track, IMF mission chief Ding Ding said in a statement. "All quantitative targets assessed at end-December 2021 have been met.
The IMF approved Suriname's three-year, $688 million Extended Fund Facility program on Dec. 23, making some $55 million immediately available. The program aims to rebuild Suriname's foreign reserves and return the country to a market-determined exchange rate.
The IMF said inflation, while still high at 60.6% year-on-year in December, has fallen since August, with the fiscal deficit and external imbalances falling.
"The Surinamese economy is expected to gradually recover during the course of 2022," Ding said. "Real GDP growth is projected to reach 1.8 percent with an unwinding of fiscal and external imbalances and a stabilization of the macro economy."
He added that Suriname had shown commitment towards reducing inflation and maintaining a free floating-market determined exchange rate.
The country will soon submit a revised 2022 budget to the National Assembly that aims for a primary surplus of 1.7 percent of GDP, higher cash transfers for the country's most vulnerable and higher electricity rates.
"The government is also working to advance discussions on debt relief with private and official creditors," Ding said.
The agreement on policy reforms is subject to approval from the IMF Executive Board.