Suriname is an upper middle income country with a strong performing economy. It is the smallest country in South America but rich in natural resources and biodiversity. Pristine forests cover about 90 percent of the land, giving Suriname one of the highest forest cover per capita and lowest deforestation ratios in the world. The economy is reliant on a few sectors for growth and development, extractive industries being the largest: alumina, gold and oil represent more than 80 percent of total exports and 30 percent of GDP. Though agriculture and manufacturing are relatively small they remain important producing sectors.
After 15 years of high volatility, Suriname has emerged over the last decade as one of the Caribbean’s best performing economies. Economic activity has fully recovered from the severe contraction experienced during the period of political instability that characterized the first 15 years following independence. The country recorded real average annual growth of 4.4 percent during the period 2000-2012. Per capita income has moved up by 12 percentage points over the past 10 years, from 29 to 41 percent of the US per capita income, ahead of the average for Latin America and the Caribbean and regional peer, Guyana. The economy is estimated to have expanded by 4 to 5 percent in 2013, driven by robust output growth in gold (principally by small, informal miners), as well as small increases in the services, extractive, agriculture and construction sectors.
Given its concentration in mining, particularly gold, the Surinamese economy is vulnerable to commodity price volatility. Economic diversification is critical for achieving sustainable growth.
A key challenge for the economy is the containment of fiscal pressures in the face of recent increases in government spending which coincided with significant fall off earnings from commodities exports. An estimated fiscal deficit of 6 percent of GDP is recorded for 2013, representing a 100 percent increase over the preceding year. The authorities have initiated discussions regarding the introduction of a program of fiscal consolidation which includes reforms to rationalize the budget process and overhaul the tax system.
Suriname’s levels of poverty and inequality are worrisome. The country ranked 105 out of 187 countries in the UNDP’s 2012 Human Development Index. The Food and Agriculture Organization (FAO) estimates that 15-20 percent of its population is undernourished. There are also significant inequalities between coastal areas, generally more affluent, and the rural interior. Nonetheless, Suriname is on track to meet some of the Millennium Development Goals (MDGs).
Last Updated: Oct 02, 2014
The WBG recently re-engaged with the Surinamese authorities after a 30-years hiatus. In September 2011, Suriname became member of the IFC. The FY2013-2014 Interim Strategy Note was approved by the Board on October 18, 2012 with a portfolio of a selected number of knowledge-based products to provide the basis for future engagements but not lending. The Interim Strategy was successfully implemented. At the request of the Government a new strategy is currently under preparation.
Under the ISN framework, knowledge-based products included: a Reserves Advisory & Management Program (RAMP); and a Report on Standards and Observance of Code (ROSC), which provides financial institutions in Suriname with international best practices in the field of auditing and accounting. Additionally, the WBG also completed a Tariff Reform Impact Simulation Tool (TRIST) model to support trade analysis and negotiations.
IFC made its first investment in 2012, with a $1.9 million loan supporting a trade financing line for a local commercial bank De Surinaamsche Bank.
Last Updated: Oct 02, 2014
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