Source: CMC

PARAMARIBO–Suriname says it will support Mexico’s Agustin Carstens to become the next managing director of the International Monetary Fund (IMF).  Governor of the Central Bank of Suriname (CBS) Gillmore Hoefdraad said Paramaribo has already communicated its position to the Washington-based financial institution. Foreign Affairs Minister, Winston Lackin has also sent a diplomatic note to the government of Mexico indicating its support for Carstens. “The government has also great trust and confidence in the leadership of the Mr. Carstens to handle the challenges of a dynamic, constantly changing world economy and to bring about the necessary reforms within the IMF,” said the Central Bank of Suriname.

It said that small states such as Suriname need to play a bigger role in the IMF in order to utilize financing mechanism reflecting their needs and positions as small and vulnerable economies.

Carstens, Mexico’s Central Bank Governor, and French Finance Minister, Christine Lagarde, are the the two candidates for the post that became vacant after Dominique Strauss-Kahn resigned after he was charged with sexually assaulting a hotel maid in New York last month. He has denied the charges.

The IMF Board of Governors will vote over the next two days to appoint a new managing director.

WASHINGTON/PARAMARIBO–The International Monetary Fund (IMF) sees a favorable economic outlook for Suriname, but warns that the country’s main challenge in the near term is to contain rising inflationary pressures. Following its Article IV consultation which was concluded on May 2, 2011, the Executive Board recommends that further efforts should be pursued to ensure fiscal sustainability over the medium term. The development of a wage-price inflation spiral should be avoided and current expenditure should be reined in; in addition social support programs should be implemented targeting the most vulnerable households affected by the rise in inflation.

ENCOURAGED

In its report, which is drafted following annual consultations, the institute said that Suriname’s favorable economic outlook is supported by buoyant commodity prices and strong private and public investments in the mineral and energy sectors and infrastructure. These investments should help raise the growth potential, strengthen government revenue, and improve the external position. The directors welcomed the authorities’ commitment to tighten fiscal policy and improve public finances. They commended the authorities for their efforts to improve the quality and dissemination of economic data, including in the balance of payments.

Further progress in developing a dynamic private sector and help diversify the economy was encouraged. Government’s intention to increase the public share in the exploitation of natural resources was noted and national dialogue to reach consensus on such investments and the management of the expected rise in mineral revenues was encouraged. The IMF Directors supported strengthening supervision of the banking and insurance sectors. They said an early FSAP exercise would be useful to assess the strengths and weaknesses in the banking sector. They also welcomed the authorities’ commitment to promote a gradual dedollarization of the banking system.

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An International Monetary Fund (IMF) mission has ended a two-week visit to Suriname, saying it expects the economy to grow by five per cent this year.  Head of the mission, Gamal El-Masry, notes that economic activity has picked up, even as pressures on prices have increased.

He says economic growth is estimated to have risen from three per cent in 2009 to 4.5 per cent last year driven by a rebound in prices of Suriname’s main commodity exports and elevated government spending.  He says the mission expects growth to pick up further in 2011, to about five per cent, supported by continued buoyant commodity prices, and large capital investments in the mineral and energy sectors.

The IMF noted that inflation topped 10 per cent in December 2010, up from 1.3 per cent at the end of 2009.