Suriname will strengthen its fiscal sustainability and foster economic growth with the budget support of $150 million from the Inter-American Development Bank (IDB). The funds will help the government to overhaul the tax collection system, boost public spending oversight and efficiency, improve fiscal planning and management, and strengthen the oversight of state-owned enterprises.

This is the first operation in a scheduled series of three single-tranche operations, which will help finance key reforms and strengthen fiscal management. The measures financed by the series are technically related but independently financed as scheduled policy-based budget support.

The program supports the government's plan to improve revenue collection through the adoption of the Value Added Tax, and the adoption of regulations to strengthen tax management in all major sectors of the economy. It will also support the modernization of the revenue agency by establishing a Semi-Autonomous Revenue Agency (SARA) and the preparation of an action plan for reviewing and updating expenditure budget classifications in line with international best practices.

In addition, the government is expected to launch an electronic procurement platform to streamline public spending and have at least eight ministries using this platform to manage their bidding processes by 2025. Also, at least five ministries should adopt guidelines to enhance public infrastructure's resilience to climate change by 2025.

By the end of the program, it is expected that the government will achieve a reduction of its debt from the current 132 percent of gross domestic product to 105 percent in 2025, a stronger economic growth from 1.8 to 3.0 percent, and higher tax revenues coming from indirect taxes (from 8.1 percent to 9.5 percent of GDP). Other objectives include helping the government reduce poverty and promote gender equality.

The IDB's $150 million budget support loan has a 20-year term, with a 5.5-year grace period, and interest based on Secured Overnight Financing Rate (SOFR). This is the first Policy-Based Loan (PBL) approved for Suriname since 2016.