Moody's Investors Service Vice-President Jaime Reusche on Tuesday highlighted the
"The markets have seen the
swearing-in of Francisco Sagasti very calmly and await the appointment of the cabinet, but they remain somewhat cautious due to the recent socio-political instability," he said.
The Moody's officer noted that institutional damage from the frequency of political incidents hinders the economy's performance.
Fiscal soundness
On the other hand, Reusche affirmed that —despite the strong political noise registered in recent weeks— Peru and Chile remain the strongest countries in the region and —in relative terms—
maintain a fiscal strength greater than others.
"But that fiscal strength is not unlimited and when we add the
impact of political or social instability to the impacts of the (COVID-19) pandemic, this can weigh on the credit profile of both countries," he indicated.
"But we will continue to observe very closely what will happen in the political, fiscal, and economic fields in the coming weeks," he emphasized.
"That is why, in the coming weeks, we will continue to observe and adjust our scenarios, evaluating how much the institutional deterioration has weighed on Peru's rating and outlook," Reusche concluded.