S&P Positive on Suriname

S&P has raised the outlook on Suriname’s BB minus rating to positive on an expectation of improved growth. The agency highlights improving macroeconomic fundamentals, robust medium-term growth prospects, a low debt position, and solid external indicators. These are offset somewhat by a narrow economic base and institutional capacity constraints. “Large investments in Suriname’s mining and oil sectors could lead to higher growth prospects as well as higher levels of exports and government revenues. Additionally, tax reform and the creation of a sovereign wealth fund could lead to improved fiscal flexibility,” S&P says. Average GDP growth for the past 10 years has been 5%, and the agency estimates growth potential of 4%-5% during the next three years. Suriname’s central bank has indicated that the government intends to issue its first-ever sovereign bond for more than $500m to to finance its equity share in planned joint ventures with two North American mining companies and to fund state-owned oil company Staatsolie, S&P says. Suriname is rated Ba3/BB minus by Moody’s and Fitch.