Country Report Suriname July 2009

Outlook for 2009-10

The Nieuw Front Plus (NF Plus) coalition government of the president, Ronald Venetiaan, will finish its term, which ends in 2010. The selection process for presidential candidates in all the main parties could damage party unity ahead of the 2010 elections. The fiscal position is set to worsen as falling commodity prices constrain revenue collection, but relations with donor agencies and strong inflows of multilateral and bilateral project funds will provide some support. After expanding by 6% in 2008, economic growth will contract in 2009 before recovering gradually in 2010, owing to a weaker global economy, lower commodity prices and a decline in foreign direct investment (FDI).

The political scene

Small disputes among the members of the governing Nieuw Front (NF) coalition have continued. The trial of former military dictator and leader of the opposition Nationale Democratische Partij (NDP), Desi Bouterse, over the murder of 15 political opponents in December 1982 is ongoing, with a verdict expected this year. A former justice and police minister, Siegfried Gilds, was in May sentenced to one year in prison for money laundering and for attempting to bribe a witness, although he has appealed against the verdict.

Economic policy

The public finances moved into surplus in 2008 thanks to exceptionally high prices for Suriname's main export commodities early in the year. However, trends in the fourth quarter support our expectation of a fiscal deficit in 2009. Demanding better wages and conditions, some public employees went on strike for part of April and May, but the president has agreed to mediation.

The domestic economy

Wage demands should subside as a result of recent disinflation. From 18.2% in August 2008, 12-month inflation fell to just 0.8% in April 2009. Mining sector indicators were mixed in the fourth quarter of 2008 (the latest period for which data are available), with bauxite, alumina and crude oil production all down in year on year terms, but gold output up by a solid 8%. Agriculture indicators for 2008 were positive, boosted in the case of rice by high prices and in the case of bananas by restructuring. However, prospects for 2009 are less positive.

Foreign trade and payments

According to recently-published figures, the current-account surplus narrowed in 2008 on account of a smaller trade surplus (reflecting strong import growth) and a larger services deficit (reflecting higher transport costs).

This report covers the following industry codes:
SIC Code: 37;60;48;49;2834;80;47;1;15;10;70
NAICS Code: 336;52;517;22;3254;62;48;11;23;212;72