“Surinamese economy shrinks with 4 percent this year”

Suriname’s sovereign credit rating has once again been downgraded. Moody’s Investors Service downgraded Suriname’s sovereign credit rating to Caa3. This is the lowest rating in more than 15 years. Moody’s gives a bleak picture on Suriname’s economy for this year as it predicts that Suriname’s real GDP will contract by 4 percent and its fiscal deficit will reach 10 percent of GDP in 2020. Moody’s said it reduced the rating due to increasing spending pressures related to the coronavirus that has raised financing needs and led to a severe tightening of financial conditions. The rating remains on a negative outlook, the firm said in a statement.

There is, however, still confidence on the international capital market. The value of the 2026 state bonds of USD 550 million keeps rising on the Luxembourg Stock Exchange. On July 7 it reached 49 percent. Suriname reached an agreement with holders of roughly 83 percent of Suriname’s 9.875 percent 2023 bonds to defer payments until December so that several drastic measures can be taken to boost the earning capacity of the state. Suriname had a stable position of B1 at Moody’s until 2013. The downward spiral started in 2016 when the government took big loans. There was also the foreign currency crisis and the pressure on the state income.