Moody’s Ratings has upgraded Suriname’s long-term local and foreign-currency issuer ratings from Caa3 to Caa1. The outlook is now positive, reflecting the anticipated economic benefits from a significant offshore oil project. This change is driven by TotalEnergies’ recent decision to proceed with the GranMorgu oil project in Block 58, which holds 750 million barrels of recoverable reserves.
The project’s production is expected to start in 2028, with output between 200,000 and 220,000 barrels per day. Moody’s anticipates substantial economic growth and government revenue, estimating that Suriname could earn between US$500 to US$700 million annually once production begins. Staatsolie, Suriname’s state-owned oil company, projects over US$20 billion in total government revenue from the oil development.
Suriname has also shown progress in reducing its debt. From a peak of 146% of GDP in 2020, government debt is expected to drop to 74% by the end of 2024, according to Moody’s predictions. Fiscal reforms under an International Monetary Fund (IMF) program have driven this improvement. These reforms included the introduction of a VAT, cuts to subsidies, and efforts to improve tax collection. A continued average primary surplus of 2.5% of GDP is anticipated, further lowering debt to 62% by 2027.
Despite the positive developments, Moody’s warns of potential risks. The report highlights concerns about managing future oil revenues, especially with pressure to increase spending before production starts. There is also a risk from Suriname’s reliance on commodity prices and the potential impact of currency depreciation on debt levels. The upcoming 2025 elections could also influence fiscal discipline.
The outlook’s positive trajectory relies on sustained reforms and careful handling of the upcoming oil windfall. The government plans to strengthen its fiscal framework, including amending existing legislation to ensure prudent use of future revenues.
