Front Matter Page

©1997 International Monetary Fund

July 1997

IMF Staff Country Report No. 97/64

Suriname—Recent Economic Developments

This report on recent economic developments in Suriname was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with this member country. As such, the views expressed in this document are those of the staff team and do not necessarily reflect the views of the Government of Suriname or the Executive Board of the IMF.

International Monetary Fund

Washington, D.C.

Front Matter Page

INTERNATIONAL MONETARY FUND

SURINAME

Recent Economic Developments and Selected Issues

Prepared by a staff team consisting of Lorenzo Pérez, Frits van Beek, Graeme Justice, Sukhdev Shah, and Rogerio Zandamela

Approved by the Western Hemisphere Department

May 20, 1997

Contents

• Basic Data

• I. Recent developments

  • A. Overview

  • B. Background

    • Developments before 1995

    • Economic turnaround in 1995

  • C. Economic developments since 1996

    • Central government finances

    • Financial sector developments

    • External sector developments

• II. Pension system reform

  • A. Old Age Pension Scheme

  • B. Civil Servant Pension Scheme

  • C. Private Sector Pension Schemes

  • D. Pension Fund Reform

• III. The Main Features of the Financial System

  • A. Structure of the Financial System

  • B. Supervision of the Financial System

  • C. Financial System Credit and Interest Rates

  • D. Monetary Policy Instruments

• IV. Impact of Caricom

• Text Boxes

• 1. Civil Service Reform

• 2. Preferential Access to the European Union

• Figures

• 1. Price and Exchange Rate Developments

• 2. Central Government Subsidies and Transfers

• 3. Central Government Employment and Wages

• Appendices

• I. The Tax Structure as of March 1, 1997

• II. The Exchange and Trade System

• III. Export Sector Developments

• Statistical Appendix Tables

• 1. Gross Domestic Product by Expenditure at Current Prices

• 2. Gross Domestic Product by Sector

• 3. Real GDP at 1980 Prices

• 4. Agriculture, Livestock and Fisheries - Production Data

• 5. Bauxite Sector - Production Data

• 6. World Production, Consumption, and Changes in Stocks of Primary Aluminum

• 7. Consumer Price Index-Paramaribo and Suburbs

• 8. Employment by Sector

• 9. Population Data

• 10. Operations of the Central Government

• 11. Government Revenues and Grants

• 12. Government Revenues and Grants

• 13. Central Government Expenditures

• 14. Central Government Subsidies, Net Transfers and Lending

• 15. Central Government Debt

• 16. Summary Accounts of the Banking System

• 17. Banking System Liabilities to the Private Sector

• 18. Distribution of Commercial Bank Credit by Destination

• 19. Loans and Deposits by Interest Rate

• 20. Summary Balance of Payments

• 21. Balance of Payments

• 22. International Reserves

• 23. Exports by Major Categories

• 24. Value, Volume, and Unit Value of Principal Exports

• 25. Imports of Hydrocarbons

• 26. Imports by Economic Use

• 27. Destinations of Exports

• 28. Origin of Imports

• 29. Trade Indices

• 30. External Grants Received

• 31. Public and Publicly Guaranteed External Debt Outstanding

• 32. Public and Publicly Guaranteed External Debt: Principal and Interest in Arrears

• 33. Average Exchange Rates

Suriname: Basic Data

Sources: Surinamese authorities; the Inter-American Development Bank; and Fund staff estimates.

^1/In terms of liabilities to the private sector at the beginning of the year.

^2/Including central bank exchange losses.

^3/In terms of U.S. dollars.

I. Social and Demographic Indicators
Area (square km)			163,820		Nutrition
					Calorie intake
Population (1995)					(daily per capital)				2,809
	Total (thousands)		412		Protein intake
	Rate of growth (percent a year)		1.2			(per capita grams/day)			66
	Density (per sq. km.)		2.5
					Health
	Population characteristics					Population per physician			1,700
	Life expectancy at birth (years)		67.6				Population per hospital bed		600
	Crude birth rate (per thousand)		20.8
	Crude death rate (per thousand)		7.1		Access to electricity (1994)
	Infant mortality (per thousand live births)		20.4				Percent of dwellings		–
	Under 5 mortality rate (per thousand)		47.0					Urban	–
								Rural	–
	Income distribution (1994)
					Access to safe water
	Highest 10 percentile		–				Percent of population (1994)		98
	Lowest 10 percentile		–
						Education (1994)
	Distribution of labor force						Enrollment rates, percent in
		Agriculture	–					Primary schools	–
		Industry	14.5					Secondary schools	–

II. Economic Indicators
								Est.
				1992	1993	1994	1995	1996
(In percent)
Annual changes in
Real GDP				4.0	-2.2	-7.0	5.0	3.0
	Agriculture			-12.2	-4.7	-11.7	-5.6	-1.7
	MIning			5.6	9.7	16.4	5.9	2.4
	Manufacturing			0.9	-23.1	-4.2	9.3	3.6
	Construction			18.9	-15.4	-36.1	23.1	4.0
	Electricity, gas and water			7.5	-8.5	-11.6	12.8	2.9
	Services			5.9	2.7	-8.3	3.7	3.6
Prices
	Consumer prices
		Period average		43.7	143.5	368.5	235.5	-0.8
		End of period		57.5	224.8	586.5	36.9	0.5
(In percent of GDP)
Investment, consumption, and savings ratios
	Gross investment			23.3	25.3	54.4	43.4	39.4
	Private consumption			81.8	71.7	44.3	46.6	54.2
	Government consumption			24.8	16.9	13.0	12.1	14.6
	National savings			-6.6	11.4	42.7	41.3	31.2
(In millions of Surinamese guilders)
Government finances
	Total revenue and grants			1,563.7	3,442.0	21,496.7	94,096.5	115,487.5
			Revenue	1,147.3	1,312.0	12,339.9	66,599.3	82,556.0
			Grants	415.9	2,130.0	9,156.8	27,497.2	32,931.5
(In millions of Surinamese guilders)
Total expenditure and net lending				1,999.2	4,420.6	18,827.5	85,204.8	113,795.6
Overall deficit				-436.0	-978.6	2,669.2	8,891.7	1,691.9
Financing				436.0	978.6	-2,668.9	-8,891.8	-1,692.0
	Net foreign financing			2.0	97.1	-1,265.1	2,154.8	-6,067.0
	Net domestic financing			434.0	881.5	-1,403.8	-11,046.6	4,375.0
		Central bank		249.0	875.7	-593.0	-10,399.4	3,321.4
		Other		184.9	5.8	-810.8	-647.2	1,053.6
(In percent change)
Government finances
Total revenue				12.7	14.4	840.5	439.7	24.0
Total expenditure				15.6	121.0	325.9	352.6	33.6
Memorandum items:
Overall balance (percent of expenditure)				-21.8	-22.1	14.2	10.4	1.5
Central bank funning (percent of liabilities to private sector at beginning of year)				5.0	-14.6	-6.0	-33.4	3.9
Overall balance (percent of GDP)				-8.7	-9.4	5.1	4.3	0.8
Monetary accounts
		Private sector liabilities		20.1	66.3	212.6	172.3	39.9
			Money and quasi-money	19.8	66.8	202.9	181.2	38.3
		Net domestic assets 1/
			Public sector (net) 2/	8.3	34.6	16.3	-30.6	-0.9
			Private sector	12.9	11.2	35.4	43.4	30.0
Balance of payments 3/
	Exports			6.0	-21.2	-12.0	29.5	-1.3
		Of which: bauxite		-5.8	-10.5	-2.9	43.9	-1.7
	Imports			3.6	-33.6	-12.4	14.9	3.5
(In millions of U.S. dollars, unless otherwise indicated)
Trade balance				-110.8	-12.8	-9.7	38.3	18.8
		Exports, f.o.b		490.0	386.3	339.8	439.9	434.3
		Imports, f.o.b.		600.8	399.1	349.5	401.6	415.5
Services (net)				-34.4	-37.6	-18.6	-15.3	-63.7
Transfers (net)				163.2	95.6	88.2	101.3	111.3
Capital account, including errors and ommissions				-27.3	-51.5	-41.7	33.9	-87.2
Overall balance				-9.3	-6.3	18.2	158.2	-20.8
Change in net reserves (- increases)				-1.7	-15.9	-15.7	-126.4	21.2
Exceptional financing				11.0	22.2	-2.5	-31.8	-0.4
Memorandum items:
Current account balance (as percent of GDP)				3.4	9.8	16.2	26.7	12.5
External debt outstanding				204.9	206.1	208.4	211.1	216.5
External debt arrears (end of period)				194.2	54.2	51.7	19.9	19.1
Central bank gross reserves (end of period)				36.3	38.8	61.5	157.6	134.0
In months of imports				0.6	0.9	1.6	3.4	2.8

Sources: Surinamese authorities; the Inter-American Development Bank; and Fund staff estimates.

^1/In terms of liabilities to the private sector at the beginning of the year.

^2/Including central bank exchange losses.

^3/In terms of U.S. dollars.

View Table

I. Social and Demographic Indicators
Area (square km)			163,820		Nutrition
					Calorie intake
Population (1995)					(daily per capital)				2,809
	Total (thousands)		412		Protein intake
	Rate of growth (percent a year)		1.2			(per capita grams/day)			66
	Density (per sq. km.)		2.5
					Health
	Population characteristics					Population per physician			1,700
	Life expectancy at birth (years)		67.6				Population per hospital bed		600
	Crude birth rate (per thousand)		20.8
	Crude death rate (per thousand)		7.1		Access to electricity (1994)
	Infant mortality (per thousand live births)		20.4				Percent of dwellings		–
	Under 5 mortality rate (per thousand)		47.0					Urban	–
								Rural	–
	Income distribution (1994)
					Access to safe water
	Highest 10 percentile		–				Percent of population (1994)		98
	Lowest 10 percentile		–
						Education (1994)
	Distribution of labor force						Enrollment rates, percent in
		Agriculture	–					Primary schools	–
		Industry	14.5					Secondary schools	–

II. Economic Indicators
								Est.
				1992	1993	1994	1995	1996
(In percent)
Annual changes in
Real GDP				4.0	-2.2	-7.0	5.0	3.0
	Agriculture			-12.2	-4.7	-11.7	-5.6	-1.7
	MIning			5.6	9.7	16.4	5.9	2.4
	Manufacturing			0.9	-23.1	-4.2	9.3	3.6
	Construction			18.9	-15.4	-36.1	23.1	4.0
	Electricity, gas and water			7.5	-8.5	-11.6	12.8	2.9
	Services			5.9	2.7	-8.3	3.7	3.6
Prices
	Consumer prices
		Period average		43.7	143.5	368.5	235.5	-0.8
		End of period		57.5	224.8	586.5	36.9	0.5
(In percent of GDP)
Investment, consumption, and savings ratios
	Gross investment			23.3	25.3	54.4	43.4	39.4
	Private consumption			81.8	71.7	44.3	46.6	54.2
	Government consumption			24.8	16.9	13.0	12.1	14.6
	National savings			-6.6	11.4	42.7	41.3	31.2
(In millions of Surinamese guilders)
Government finances
	Total revenue and grants			1,563.7	3,442.0	21,496.7	94,096.5	115,487.5
			Revenue	1,147.3	1,312.0	12,339.9	66,599.3	82,556.0
			Grants	415.9	2,130.0	9,156.8	27,497.2	32,931.5
(In millions of Surinamese guilders)
Total expenditure and net lending				1,999.2	4,420.6	18,827.5	85,204.8	113,795.6
Overall deficit				-436.0	-978.6	2,669.2	8,891.7	1,691.9
Financing				436.0	978.6	-2,668.9	-8,891.8	-1,692.0
	Net foreign financing			2.0	97.1	-1,265.1	2,154.8	-6,067.0
	Net domestic financing			434.0	881.5	-1,403.8	-11,046.6	4,375.0
		Central bank		249.0	875.7	-593.0	-10,399.4	3,321.4
		Other		184.9	5.8	-810.8	-647.2	1,053.6
(In percent change)
Government finances
Total revenue				12.7	14.4	840.5	439.7	24.0
Total expenditure				15.6	121.0	325.9	352.6	33.6
Memorandum items:
Overall balance (percent of expenditure)				-21.8	-22.1	14.2	10.4	1.5
Central bank funning (percent of liabilities to private sector at beginning of year)				5.0	-14.6	-6.0	-33.4	3.9
Overall balance (percent of GDP)				-8.7	-9.4	5.1	4.3	0.8
Monetary accounts
		Private sector liabilities		20.1	66.3	212.6	172.3	39.9
			Money and quasi-money	19.8	66.8	202.9	181.2	38.3
		Net domestic assets 1/
			Public sector (net) 2/	8.3	34.6	16.3	-30.6	-0.9
			Private sector	12.9	11.2	35.4	43.4	30.0
Balance of payments 3/
	Exports			6.0	-21.2	-12.0	29.5	-1.3
		Of which: bauxite		-5.8	-10.5	-2.9	43.9	-1.7
	Imports			3.6	-33.6	-12.4	14.9	3.5
(In millions of U.S. dollars, unless otherwise indicated)
Trade balance				-110.8	-12.8	-9.7	38.3	18.8
		Exports, f.o.b		490.0	386.3	339.8	439.9	434.3
		Imports, f.o.b.		600.8	399.1	349.5	401.6	415.5
Services (net)				-34.4	-37.6	-18.6	-15.3	-63.7
Transfers (net)				163.2	95.6	88.2	101.3	111.3
Capital account, including errors and ommissions				-27.3	-51.5	-41.7	33.9	-87.2
Overall balance				-9.3	-6.3	18.2	158.2	-20.8
Change in net reserves (- increases)				-1.7	-15.9	-15.7	-126.4	21.2
Exceptional financing				11.0	22.2	-2.5	-31.8	-0.4
Memorandum items:
Current account balance (as percent of GDP)				3.4	9.8	16.2	26.7	12.5
External debt outstanding				204.9	206.1	208.4	211.1	216.5
External debt arrears (end of period)				194.2	54.2	51.7	19.9	19.1
Central bank gross reserves (end of period)				36.3	38.8	61.5	157.6	134.0
In months of imports				0.6	0.9	1.6	3.4	2.8

Sources: Surinamese authorities; the Inter-American Development Bank; and Fund staff estimates.

^1/In terms of liabilities to the private sector at the beginning of the year.

^2/Including central bank exchange losses.

^3/In terms of U.S. dollars.