Above: Paramaribo (Photo: IDB)
By the Caribbean Journal staff
Ratings firm Moody’s has upgraded the foreign currency rating of the government of Suriname to Ba3 and raised the country’s economic outlook from stable to “positive.”
The change came from several factors, Moody’s said, including the expectation of “continued prudent fiscal management and improved debt sustainability metrics,” positive short-to-medium-term growth prospects, greater anticipated resilience to shocks and access to concessional financing from multilateral creditors.
Suriname’s fiscal management has been characterized by low budget deficits relative to its ratings peers, the firm said, and “steadily declining debt ratios.”
The country has also received a boost from “robust” growth, led by gold mining, oil and construction.
The government has also built up its foreign exchange reserves in excess of 20 percent of GDP, resulting from what the firm called “robust current account surpluses and healthy capital inflows” in recent years.
That should be boosted by the establishment of a sovereign wealth and stabilization fund planned for 2013.
Moody’s said several factors could lead to a negative rating: a “deterioration” in the government’s fiscal balance, a “substantial increase” in external commercial debt to fund the acquisition of equity stakes in gold mining concessions, and a rapid build-up of debt.
Suriname’s upgrade bucks a recent trend of Caribbean countries seeing downgrades to their sovereign debt.