Economy and Finance Minister Jose Arista highlighted that Peru's country risk is the second lowest in Latin America, even though the international rating agency Standard & Poor's downgraded Peru's rating from BBB to BBB- (long term rating for foreign currency).
"At the Latin American level, Peru has the second lowest country risk, after Chile and by a small margin. Actually, it (the lowering of the country’s rating by Standard & Poor's) has not affected much and I do not think it will affect us," he said in remarks to TV Peru last Monday.
Arista explained that Peru has a contract with the three most important rating agencies in the world (Standard & Poor's, Fitch, and Moody's), which have two rating levels: investment grade and speculative grade.
"Peru has fought hard to move from the speculative grade to the investment grade and I think we have achieved that in 2007," he pointed out.
"Today Peru has been upgraded to a BB+ rating, very good. Then, Standard & Poor's lowered its rating to BBB- and not for economic reasons, but for institutional ones, which is an aspect that we must all work on," the minister added.
"So, only one out of three (rating agencies) has downgraded our rating, but I don't want to discredit it. I would rather look at the positive side, I am very grateful to the analysts at Standard & Poor's for having shown us in black and white what the big problems of Peru are," he stated.
Institutional problems
The Cabinet member acknowledged that Peru has problems ranging from the
National Elections Board (JNE) —when they fail to register many political parties to participate in the elections— to the Judiciary and Congress because of the scandals.
"All of this adds up, and what they (rating agencies) say is that there is a lack of institutionality and space to make major economic reforms. They also indicate that there are great investment opportunities, but these are making slow progress because they do not have sufficient institutional support in Peru," he stated.
"So, if Peru becomes a speculative grade country, it could affect us; we have to gain consensus in Peru in order to organize ourselves and for the entire public administration to work better," the government official said.
(END) CNA/JJN/RMB/MVB
Publicado: 1/5/2024