Short-term economic outlook is challenging in Suriname

Significance

Combined with rising food import costs, higher energy prices are reducing consumer purchasing power and increasing social frustration. The government of President Chandrikapersad Santokhi has reacted by introducing a new fuel price subsidy, which is set to conflict with the policy commitments in the country’s three-year loan agreement with the IMF.

Impacts

• A new contract agreed with Chevron in April is a positive signal for increased investment in the oil industry.
• Popular expectations around the growing oil industry will increase frustration with loss of purchasing power due to inflation.
• The government is set to introduce more local content requirements as a way of directing more foreign investment to local firms.