In recent months, several major oil companies expanded their offshore drilling operations in Guyana to include neighboring Suriname. The entry into Suriname was facilitated by the country’s shifting political climate and the economic vulnerability triggered by the COVID-19 pandemic. With the sudden arrival of expatriates into the capital, Paramaribo, the housing market is already experiencing considerable strain.
A Fragile Economy
By the end of 2020, the COVID-19 pandemic left Suriname’s economy in a fragile state. The IMF reported that Suriname’s GDP contracted by 13.1% in 2020, the third-largest decrease in South America. For reference, Guyana was the only South American country to experience positive GDP growth, at a whopping 26.2%.
Expanded Trade Relations
Since the summer of 2020, newly elected President Chan Santokhi has been working towards expanding trade relations with foreign businesses to address the country’s economic perils. As more oil reserves are discovered in the Guyana-Suriname basin, oil companies are leaping on this opportunity to expand their nearby drilling operations. What makes the region even more attractive to oil companies are the low prices Suriname offers (around $30 to $40 per barrel), which are considerably cheaper than the average cost of oil production in the United States.
Over the past few months, companies have been rapidly sending employees to Paramaribo to ensure they enter the rental market early. Real estate sources say the sudden demand for living accommodations in the area has placed considerable strain on the already tight housing supply. High security demands make gated communities the most sought-after, but the lack of availability has forced many to settle for less ideal properties. At this time, anticipation remains high for new housing developments to be introduced.
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