The ratings on the Republic of Suriname reflect the country's improving macroeconomic fundamentals. Its medium-term growth prospects are robust, and its debt position is solid, with net general government debt at less than 10% of GDP at year-end 2009. Most importantly, Suriname has made legislative and institutional changes aimed at preserving these accomplishments beyond the current economic and political cycles.
Counterbalancing these supporting factors is Suriname's narrow economic base, which is strongly tied to commodities; alumina, gold, and oil constituted more than 80% of current account receipts at year-end 2009. In addition, there are continued institutional capacity constraints (such as periodic delays in payment of multilateral debt) that affect debt management, public investment, and a more forceful advancement of structural reforms.
Because of a fall in average commodity prices for aluminum and oil, Standard & Poor's Ratings Services expects Suriname's current account balance to have a slight surplus of 3% of GDP in 2009, down from a surplus of nearly 12% in 2008. High gold prices also aided in a continued fiscal surplus (less than 1% of GDP). However, slower economic growth in 2009 and 2010 and a sharp increase in public-sector salaries will result in small fiscal deficits in the coming years, assuming the government contains pressure for further increases in salaries. Because of continued current account surpluses and foreign direct investment, especially in the gold sector, we expect that international reserves will grow and that general government debt will remain stable at its already low level.
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