Suriname: Staff Report for the 2019 Article IV Consultation—Informational Annex
Author: International Monetary Fund. Western Hemisphere Dept.
Publication Date:
23 Dec 2019
eISBN:
9781513524498
Language:
English
Keywords:
ISCR; CR; CBvS; central bank; GDP; Suriname; Surinamese economy; supervision framework; foreign exchange; Suriname's economy; electricity sector subsidy; law amendment; paternity support; fiscal policy framework; CFT regime; Monetary base; International reserves; Currencies; Anti-money laundering and combating the financing of terrorism (AML/CFT); Caribbean; central bank of Suriname; financial asset; component data; CPI basket; central bank modernization; Government finance statistics; Financial statistics; Financial soundness indicators
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November 19, 2019

Abstract

November 19, 2019

Contents

November 19, 2019

Prepared By

Western Hemisphere Department

(In consultation with other departments)

Contents

  • FUND RELATIONS

  • RELATIONS WITH OTHER INTERNATIONAL FINANCIAL INSTITUIONS

  • STATISTICAL ISSUES

Fund Relations

(As of September 30, 2019)

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Projected Payments to Fund1

(SDR Million; based on existing use of resources and present holdings of SDRs):

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Implementation of HIPC Initiative: Not Applicable.

Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable.

Implementation of Catastrophe Containment and Relief (CCR): Not Applicable.

As of February 4, 2015, the Post-Catastrophe Debt Relief Trust has been transformed to the Catastrophe Containment and Relief (CCR) Trust.

A. Nonfinancial Relations with the Authorities

Exchange rate arrangements

The national currency is the Surinamese dollar (SRD), which replaced the Surinamese guilder in January 2004 at a conversion rate of 1,000 guilders per SRD 1. The de jure exchange rate arrangement is classified as floating. Effective February 13, 2017, the de facto exchange rate arrangement has been reclassified to “stabilized” because the bilateral U.S. dollar exchange rate has remained within a narrow margin of 2 percent. Suriname maintains an exchange system that is free of multiple currency practices and restrictions on the making of payments and transfers for current international transactions.

Last Article IV consultation

The last Article IV consultation was concluded by the Executive Board on November 16, 2018 (The last published IMF Article IV country report is from December 2018: IMF Country Report No. 18/376). Suriname is on the standard 12-month consultation cycle.

Participation in the GDDS and the e-GDDS

In July 2004, the IMF officially announced Suriname’s formal participation in the General Data Dissemination System (GDDS), and e-GDDS was implemented in April 2017.

Safeguards Assessment

The first safeguards assessment of the CBvS was completed in June 2016. The assessment found significant risks, including in the areas of governance, central bank legislation, financial reporting, and the external audit of the central bank. Recommendations included: (i) amending the Bank Act to align it with leading practices for central banks; (ii) appointing an international audit firm with experience in auditing central banks to conduct the annual financial statements audit; and (iii) special audits of program monetary data submitted to the Fund. These measures were included as part of program conditionality. The authorities have made progress in implementation of some of the recommendations. Several pieces of legislation are being finalized and expected to be submitted to Parliament end of 2019 (see staff report).

B. Technical Assistance (TA) Since 2011

CARTAC

  • Improving insurance supervision (2011)

  • National accounts statistics in rebasing the Gross Domestic Products at constant prices and revising the current price estimates (2011)

  • Improving fiscal projection and budget preparation capacity (early 2012)

  • Treasury single account and chart of accounts issues (June 2012 and April 2013)

  • Seminar on central treasury management (August 2012)

  • Support during VAT implementation (October 2012)

  • Banking supervision and securities regulation (October 2012)

  • National accounts and expenditure-based GDP (July 2012, July 2013, February 2014)

  • Deposit insurance scheme (January, June and July 2013)

  • Review of existing reforms including the chart of accounts and IFMIS implementation (October through to November 2013)

  • Capital market development (November 2013)

  • Electronic auditing course (January 2014)

  • Balance of payments statistics assessment (February 2014)

  • National account statistics on expenditure-based GDP, current prices (February 2014)

  • Assistance on MTEF and the budget process also present at the ICAC conference (June 2014)

  • Improving macroeconomic projection frameworks and training staff in forecasting techniques (June 2014)

  • Developing macroprudential indicators and measures of systemic risk (April 2015)

  • National account statistics on expenditure-based GDP, current prices (April 2015)

  • Developing a stress-testing methodology for the insurance sector (May 2015)

  • Development of financial soundness indicators for insurance sector (June 2015)

  • Enhancement of financial stability analysis (July 2015)

  • National account statistics on expenditure-based GDP, current prices (November 2015)

  • Balance of payments and IIP enhancement (July 2016)

  • Developing pension fund sector (July 2016)

  • Improved budget execution and control (October 2016)

  • National Account Statistics (February 2017)

  • Price Statistics (August 2017)

  • Macro fiscal scoping mission (July 2018)

  • External sector statistics (November 2018)

  • Macroprudential and financial interconnectedness (November 2018)

  • Public financial management (April 2019)

  • International financial reporting system (IFSR9) implementation (March 2019)

  • International financial reporting system (IFSR9) implementation, follow-up (July 2019)

FAD

  • Revenue administration assessment for a high-level implementation plan for the VAT (February 2011)

  • Joint IMF-WB mission on public financial management and related ICT capacity building (August 2012)

  • Joint IMF-WB mission on IFMIS design and implementation (May 2013)

  • Establishing a treasury and cash management unit (July 2016)

  • Tax and customs: Preparing for the Value-Added Tax (March 2017)

  • Legal and Tax Policy Frameworks: Preparing for the Value-Added Tax (April 2017)

  • Revenue Administration: Follow up on the preparation for the Value-Added Tax (October 2017)

  • Desk reviews for the PFM law and the establishment of a sovereign wealth fund (2017-18).

LEG

  • Fiscal law (August and November 2011)

MCM

  • Banking system assessment (March 2011)

  • Introduction of indirect monetary instruments (June 2011)

  • Bank resolution (January 2012)

  • TA results-based management (February 2012)

  • T-bills auction (May 2013)

  • T-bills auction (July 2013)

  • Central bank modernization (September 2013)

  • Modernizing payments system at the Central Bank of Suriname (October 2013)

  • T-bill auctions (December 2013)

  • Central bank accounting and treasury account rationalization (December 2013)

  • Establishment of a single treasury account and improving financial reporting (January 2014)

  • T-bills auction (July 2014)

  • Macroeconomic and monetary operations (September 2015)

  • TA needs assessment (September 2015)

  • Exchange rate policy (November 2015)

  • Monetary framework operations (March 2016)

  • T-bills auction (April 2016)

  • Liquidity management and monetary operations (June 2016)

  • Enhancing Central Bank financial strength and transparency (October 2016)

  • Emergency liquidity assistance, early intervention and crisis management (August and November 2016)

STA

  • Workshop on national accounts (January 2012)

  • BOP and external sector statistics (March 2014)

  • Government finance statistics (December 2015)

  • Financial soundness indicators (April 2016)

  • Government finance statistics (May 2016)

  • Enhanced General Data Dissemination System (e-GDDS) (February 2017)

  • Government finance statistics (May 2017)

  • Government finance statistics (May 2018)

Consents and acceptances: Suriname has consented to the Executive Board reform and 2010 quota increase.

Resident Representative: None.

Relations With Other International Financial Instituions

World Bank Group:

Inter-American Development Bank (IADB)

Caribbean Development Bank (CDB)

Islamic Development Bank (IsDB)

Statistical Issues

A. Assessment of Data Adequacy for Surveillance

General: Data provision is broadly adequate for surveillance purposes, but has shortcomings, reflecting capacity constraints and limited resources. Most affected are the national accounts price and labor market indicators. Annual national accounts data are available with a delay of about 9 months. CPI data, including for individual basket items are available. However, other detailed CPI component data (for example, the weights in the consumption basket of fuel and electricity) are unavailable, and no other price indexes, such as a production price index (PPI) or imports and exports price indices, are available. The authorities should implement their plan, discussed at the time of the 2014 Article IV, to publish expenditure-based GDP. Fiscal and external sector data are broadly adequate for surveillance. The authorities also need to compile social indicators for enabling social policy design to support inclusive growth. Overall, the lack of timely and complete economic data deprives policymakers and the private sector of accurate information about the economy and hampers a full diagnostic of the current conjuncture. The Central Bank of Suriname (CBvS) has developed a Monthly Economic Activity Indicator, based on survey of about 250 companies, that usefully tracks economic activity. The authorities could further develop labor market indicators to fill the labor statistics gap.

Real sector statistics: The CARTAC has provided the General Bureau of Statistics (ABS) technical assistance in improving the quality and coverage of real sector statistics data. The ABS currently produces annual estimates of GDP by production at current and constant 2007 prices; as well as annual current price estimates for GDP by expenditure that are not disseminated. The ABS is working on rebasing GDP to 2015 and the process is expected to be completed in June 2020. There are plans to start producing quarterly GDP by production, with support from the Economic Commission for Latin America and the Caribbean (ECLAC), Canada’s Project for the Regional Advancement of Statistics in the Caribbean (PRASC), and the National Institute of Statistics and Geography of Mexico (INEGI), starting end-2019. The ABS has updated the CPI basket based on the results of the 2013/2014 household budget survey and published a census of enterprises. The ABS is also expected to receive TA on developing gender statistics from CARICOM and ESTAT in 2020. The ABS received support from PRASC in July 2019 to conduct trade and freight transport margin studies, produce adjustment factors and indicators, improve classification and quality of International Merchandise Trade Statistics (IMTS), and establish the Integrated Business Register (IBR). Following the publication of the Demographic Data 2015-18, the ABS plans to continue producing it every two years starting in 2020.

Government finance statistics: Public finance statistics and public debt data are limited to the central government. Given the importance and number of state-owned enterprises (SOEs), the institutional coverage of fiscal statistics should be broadened to the nonfinancial public sector to allow an improved assessment of overall public sector fiscal risks. The MoF received technical assistance from STA in recent years for the implementation of a new information technology system (IFMIS) to produce the budget according to the GFSM. There has been an improvement in the quality of fiscal data as MoF started publishing data on gross revenues subsidies (correcting for settlements). Staff encourage the MoF to publish detailed fiscal data on a timely basis.

Monetary and financial statistics: The CBvS uses standardized report forms (SRFs) to regularly report data for the central bank and other depository corporations (ODCs) on a monthly basis. There have been important improvements to quality and timeliness of monetary and financial statistics. The surveys for depository corporations are disseminated on the CBvS’s website within five weeks of the reference month. The CBvS does not yet provide SRFs for other financial corporations and the authorities have requested technical assistance in this field. Parallel market exchange rate data is not available.

Financial sector surveillance: The CBvS compiles financial soundness indicators (FSIs) for the banking system on a monthly and quarterly basis with a lag of about one quarter. However, the FSIs are currently not reported to the Statistics Department (STA) for dissemination on the IMF’s FSI website. The authorities are encouraged to adopt the IMF FSI methodology and to begin reporting Suriname’s FSIs to STA on a regular basis, as recommended by the April 2016 STA TA mission. Suriname reports data on some key series and indicators to the Financial Access Survey (FAS), including the two indicators (commercial bank branches per 100,000 adults and ATMs per 100,000 adults) adopted by the UN to monitor Target 8.10 of the Sustainable Development Goals (SDGs).

External sector statistics: The CBvS compiles and disseminates quarterly balance of payments and international investment position (IIP) statistics. The CBvS has transitioned to the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6). However, it has not yet begun to publish the BPM6-based data. The CBvS also disseminates quarterly external debt statistics on its website and reports them to the World Bank’s Quarterly External Debt Statistics (QEDS) database. The coverage of public sector external debt and private sector external debt loans is adequate. In more recent years, the CBvS has strengthened the compilation and coverage of foreign direct investment and prepared inward direct investment data by partner economy and economic sector. There is a further need to expand the coverage of deposits abroad of the nonfinancial sector, private sector external debt other than loans, and services (transport, travel, insurance and pension services, financial, and other business services), which will continue to contribute to reduce the persistent high net errors and omissions in the balance of payments statistics. The improvement of travel services estimates requires the implementation of visitor surveys in coordination with the Suriname Tourism Office and the General Bureau of Statistics (ABS). Remittances can also be improved by using the household survey of the ABS to compile remittances through informal channels. Improved interagency coordination (CBvS, ABS, Ministry of Finance, Debt Management Office, and other agencies) will also strengthen consistency and harmonization among macroeconomic statistics.

B. Data Standards and Quality

Suriname implemented e-GDDS in April 2017.

C. Reporting to STA

Suriname currently does not report fiscal statistics for inclusion in either International Financial Statistics or the Government Financial Statistics Yearbook.

Suriname: Table of Common Indicators Required for Surveillance

(As of November 12, 2019)

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Deposit and lending rates.

Foreign, domestic bank, and domestic nonbank financing.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); Weekly (W); Monthly (M); Quarterly (Q); Annually (A); Irregular (I); Not Available (NA).

1

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

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Cover IMF Staff Country Reports
Suriname: 2019 Article IV Consultation-Press Release; Staff Report; Informational Annex; and Statement by the Executive Director for Suriname
Author: International Monetary Fund. Western Hemisphere Dept.
Volume/Issue:
Volume 2019: Issue 391
Publisher:
International Monetary Fund
ISBN:
9781513524498
ISSN:
1934-7685
Pages:
85
DOI:
https://doi.org/10.5089/9781513524498.002