Estadio Nacional, Via Expresa, Ministerio de Defensa,Javier Prado, Centro Financiero, Viviendas, Construcción, Campo de Marte, Trebol de Javier Prado, Miraflores Surco
Moody's Investors Service has reaffirmed Peru's A3 rating with stable outlook, due to its long-standing track record of macroeconomic stability, market-friendly policies and prudent fiscal management, Moody's Vice President - Senior Analyst Jaime Reusche reported.
“Peru maintains solid economic fundamentals, thanks to strong economic institutions that have provided a stable environment to boost growth and an absence of major macroeconomic imbalances,” he pointed out.
He said this is shown in the low and affordable government debt, substantial fiscal savings, a strong balance sheet and solid fiscal policy credibility.
The greatest institutional challenges facing the sovereign relate to its political environment, that is, its political infighting, a weak judicial system, low levels of education and an inefficient bureaucracy at the local and regional government level.
The economist noted that authorities are moving forward towards correcting some of these disadvantages, but the progress is slow.
Moody’s does not expect Peru's credit quality to change significantly over the next year or two.
Although upward pressure on the sovereign's rating is unlikely over the medium term, a substantial increase in income levels or a significant strengthening of governance indicators, especially related to political institutions, would contribute to improving creditworthiness.
Reusche went on to add that Peru’s credit rating would be affected if political noise increases significantly.
Finally, he said perception of increased corruption generally leads to political instability, which negatively affects the economic performance.
(END) RGP/JJN/RMB
Published: 8/25/2015