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.
Following years of economic volatility, the country has transitioned into a period of stable macroeconomic growth coupled with relatively low inflation. The economy was not adversely affected by the global financial crisis, growing above 4 percent between 2007 and 2012. Preliminary estimates suggest that the recent trend in economic performance has been maintained in 2013 with economy expanding between 4 – 5 percent (among the highest in LAC). The expansion in the economy in 2013 reflect a robust growth in services (wholesale and retail trade, transport and communication and financial), extractive industries (gold and oil), agriculture and construction sectors. While the export price of gold fell by a third (from US$1800 to US$1300/oz) investment and output continued at record pace.
Growth is expected to average around 4 -5 percent over the medium-term. Major new gold and bauxite mines are to be open in 2014 providing further impetus to economic growth and government revenue. Economic diversification from the natural resource sector would mitigate commodity price volatility.
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. However, 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 remain 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. Suriname is on track to meet some of the Millennium Development Goals (MDGs), with rural areas mostly lagging behind the coastal region.
Between October 2010 and 2012, the World Bank Group (WBG) worked in partnership with the Government of Suriname to develop an Interim Strategy Note (ISN), which was discussed by the Board of the World Bank in October 2012. The ISN, the first partnership document, is a two-year strategy that guides the WBG’s engagement with Suriname in selected areas of the Government’s development agenda, as laid out in its Multi-Year Annual Development Plan (2012-2017).
Under the ISN framework, the WBG is working with the Government on a selected number of knowledge-based products. These include: 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.
Suriname became an IFC member in August 2011. 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
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