00:17 | Mexico City (Mexico), Mar. 23.
Standard & Poor's Global Ratings has said the resignation announcement of President Pedro Pablo Kuczynski has no immediate implications for its sovereign credit ratings on Peru (foreign currency: BBB+/Stable/A-2; local currency: A-/Stable/A-2).
"We believe that Vizcarra's presidency is not likely to have a meaningful impact on key economic and investment policies in Peru as long as the new government is able to regain
investors' confidence," S&P stated.
"As Peru has no urgent structural reform at this point, the most likely outcome would be execution of already approved measures and continuity in Government. President Vizcarra will need to forge alliances in the Congress to avoid recurrent conflicts and move ahead with the Government's existing spending agenda," it added.
Macroeconomic management
The rating agency noted that Peru has established a track record of commitment to cautious
macroeconomic management in the past two decades.
"The succession of stable Governments has allowed for the pursuit of ongoing reforms and ensures macroeconomic stability. Our current institutional assessment is predicated on the continuation of pragmatic policy by the Peruvian Government in general —whoever is President— and by Congress," it said.
Standard & Poor's affirms that Peru's creditworthiness is also supported by a low —albeit rising— debt burden, continued GDP growth, and moderate external debt. The credible monetary policy has also sustained financial sector stability and investor confidence.
"We expect
economic growth to improve this year thanks to the combined impact of fiscal stimulus, private
investment, and higher metal prices. Nevertheless, additional delays in executing investment projects, related to institutional shortcomings and corruption scandals, pose clear risks," the agency remarked.
"We have determined that no rating actions are currently warranted, based solely on the developments described," it concluded.
(END) NDP/RMB/MVB
Published: 3/23/2018