A deadline for an agreement between Suriname and the International Monetary Fund (IMF) regarding debt refinancing is set to expire
A deadline for an agreement between Suriname and the International Monetary Fund (IMF) regarding debt refinancing is set to expire today.
The deadline was agreed upon by the Surinamese government and its creditors last fall, which enabled the country to technically reverse the default on its external debt obligations. The cost of servicing Suriname’s external debt topped 40% of government revenues in 2020, reaching nearly $250 million in annual interest payments. Further exemptions on these payments are highly likely in the short-term considering the lack of progress in recent negotiations.
Suriname’s debt pile grew substantially under the previous president, Desi Bouterse. Bouterse, a convicted murderer and drug trafficker, negotiated a variety of debt obligations that have come under sharp scrutiny. Incumbent President Chan Santokhi could seek to have those questionable debts audited and possibly annulled if they are found to be illegal.
In order to further spur growth, the Santokhi administration is likely to prioritise addressing systemic corruption and governance issues to improve its credit rating and attract private investment. Expect the IMF to pledge additional funds through country allocations in the short-term, though broader talks of debt restructuring with international creditors will continue into the medium- and long-term.
Wake up smarter with an assessment of the stories that will make headlines in the next 24 hours. Download The Daily Brief.