Suriname

Economic recovery to continue amid renewed oil investment

After the deep recession triggered by the Covid-19 pandemic, the economy has shown a moderate recovery since 2022 and gained momentum in 2024. Gold, which has historically accounted for the bulk of exports, continues to support net export earnings as price and demand remain high. Moreover, growth was primarily driven by private consumption, as tighter monetary policy and lower commodity prices significantly reduced inflation, thereby enhancing household real incomes.

Looking at 2025, the economic recovery is expected to continue. With the final investment decision announced in October 2024, works will begin in the new GranMorgu offshore field (Block 58), with oil production expected by 2028. TotalEnergies and its partners plan to invest approximately USD 10.5 billion between 2025 and 2028, which will drive further investment, especially in infrastructure. Last, tight monetary policy, with low reserve money creation, and fiscal consolidation under the IMF's Extended Credit Facility will continue to reduce inflationary pressures. Further easing in global food and energy prices, together with a firm currency, should also help bring down inflationary pressure. However, pressure will remain high enough to affect household purchasing power and damp private consumption. Fortunately, some services linked to oil and gas development, including boosted retail activity in the capital, will provide some support to part of the population.

Debt restructuring near completion and fiscal consolidation in progress

Following a default in late 2020 amid Surinamese dollar depreciation and the economic downturn, debt negotiations ended with a rescheduling agreement with the Paris Club in June 2022, suspending repayments until 2028 and setting comparable terms for other creditors. Bilateral agreements have been reached with all Paris Club members and India, while talks with China (which holds 11.5% of public debt) have reached their final stage. Suriname signed a debt rescheduling agreement with China in November 2024, covering obligations to Exim Bank and the Industrial and Commercial Bank of China, with the first repayments made in the same month. An agreement in principle with bondholders representing 96% of the private commercial debt proposes a 25% nominal discount and a 4.95% interest rate until January 2026, when the coupon rate will increase to 7.95%. Additionally, arrears with other creditors, including domestic ones, have already been cleared. Notably, agreements contain clawback provisions relating to future oil developments that ensure potential adjustments based on Suriname’s economic performance.

The IMF has provided USD 690 million over three years (2022-2025) under an Extended Credit Facility, which is conditional on fiscal consolidation and structural reforms. Key measures included the expansion of VAT coverage to at least 60% of household consumption and the progressive phasing-out of energy subsidies, which have boosted revenues and could potentially help balance the budget in 2025, although high social spending continues to compensate vulnerable households for the phasing-out of subsidies. Additionally, a prolonged drought since 2022 has forced authorities to provide aid to rice growers and raise electricity production costs. Looking ahead, completion of debt restructuring and other reforms should improve debt sustainability and overall fiscal health. Strengthening fiscal rules will also be essential given that oil revenues are set to rise significantly in the coming years.

The current account surplus narrowed in 2024 as rising imports outpaced robust gold exports. Looking ahead to 2025, import pressures are expected to increase further, driven by the development of the offshore field. However, this will be largely offset by a corresponding increase in FDI linked to oil exploration, suggesting a current account surplus similar to that of 2024 if oil is put aside. Meanwhile, significant remittances from the country's large diaspora, mainly based in the Netherlands and accounting for around 4-5% of GDP, combined with a gradual improvement in export performance, continue to provide external support. Finally, FX reserves have been increasing (covering 7 months of imports) as the central bank has refrained from intervening in the exchange market.

Disputed elections amid austerity and social instability

The Vooruitstrevende Hervormings Partij (VHP), which historically represents the Indo-Surinamese population but has managed to eliminate its ethnic dimension, became the country's main party in the May 2020 legislative elections. The VHP leads a coalition that gave the government a majority, holding 30 seats out of 51. President Chan Santokhi (VHP), who was appointed by the ruling coalition in July 2020, is committed to rolling out unpopular structural reforms to prepare the country for the tapping of oil. Although the large-scale protests of 2023 did not recur in 2024, social instability remains the country's biggest political risk. Persistently high inflation and IMF-imposed austerity measures continue to be key triggers for potential unrest.

In this context, the upcoming general elections scheduled for May 2025 have the potential to be a contentious event. Before voting began, the Surinamese parliament successfully changed the electoral law from a district system to proportional representation, which should prevent any delays in the election. However, given the country’s existing social instability, any corruption scandals or allegations in the run-up to the election day could trigger protests and unrest. There is a lack of polling data in Suriname, making it difficult to predict the outcome of the election. The country's economic challenges and high inflation are expected to make it difficult for the ruling party to retain power, with the left-leaning National Democratic Party (NDP) possibly leading the next government. However, the NDP's association with the controversial former leader Desi Bouterse (who passed away in December 2024 and had governed for 10 years before the VHP took over) may hinder its ability to secure votes. Additionally, the ruling government announced that it will give each adult citizen a Royalty Voor Iedereen (RVI, Royalties for Everyone) payment equivalent to USD 750 once it begins collecting royalties from Block 58 oil sales, a move that could influence voter sentiment. A new coalition government is the most likely outcome of the elections.

Regarding foreign policy, Suriname and Guyana have strengthened their bilateral ties in recent years, driven primarily by their shared interests in oil and gas exploration. Both countries are collaborating on offshore energy projects, fostering economic integration and regional stability. Beyond energy, they have also expanded cooperation in infrastructure, trade, and security, aiming to improve cross-border connectivity and economic growth. However, lingering territorial disputes, such as the contested Tigri area, are sensitive topics, although diplomatic efforts have largely kept in check the tensions in their relationship.

Last updated: March 2025