15:39 | New York (U.S.), Nov. 6.
The measures in the
Government's economic plan —unveiled last week by Prime Minister Vicente Zeballos— are credit positive for the Peruvian economy and will have limited fiscal impact,
Moody's Investors Service reported on Wednesday.
"Although our forecast calls for a 2% of GDP fiscal deficit for 2019, strong revenue growth and contained expenditures throughout the year are providing the authorities with ample
fiscal space to enact the new spending measures and meet, or marginally outperform, our deficit forecast," it explained.
Moody's pointed out that at a time when social protests grip Latin America, the measures include an increased minimum wage and pension effective in early 2020.
In this regard, Moody's noted that the measures would have limited fiscal impact for the sovereign. The minimum wage increase is small, and few public-sector workers make the minimum wage.
It went on to say public investment stimulus would help stabilize economic activity given lackluster growth in primary sectors this year.
Yet it warned the investment push would be constrained by longstanding execution problems related to legal issues, expropriations and corruption investigations, as well as design and project articulation flaws.
(END) MDV/JJN/RMB/MVB
Published: 11/6/2019