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The Economist: Peru among 4 strongest emerging economies amid COVID-19 crisis

17:56 | Lima, May. 6.

The London-based publication 'The Economist' listed Peru as the fourth strongest among 66 emerging economies amid the COVID-19 crisis, Peru's Central Reserve Bank (BCR) Governor Julio Velarde reported on Wednesday.

Addressing the Congress' Economy Commission, Velarde said that —according to the UK's magazine— Peru's fiscal strength is the result of reduced external debt, low public debt, small cost of borrowing, and a high reserve cover.

"Peru's economic foundations are in an enviable situation and allow us to face this emergency in conditions much better than those of other countries," Velarde expressed.

"We have a sufficiently strong macroeconomic strength that has allowed us to put into action a series of measures that other countries cannot," he emphasized.

According to the ranking, the emerging economy with the greatest fiscal strength is Botswana, followed by Taiwan, South Korea, and Peru.

Next in line are Russia, the Philippines, Thailand, Saudi Arabia, Bangladesh, China, Guatemala, Vietnam, Poland, Nigeria, as well as Trinidad and Tobago.

The economies of Argentina, Ecuador, Venezuela, Lebanon, Bahrain, Angola, Tunisia, Sri Lanka, Tunisia, Mongolia and Oman are placed at the bottom of the list.

The Economist has ranked 66 economies using four indicators of financial strength. "Some, such as Russia, Peru and the Philippines, look relatively robust," the British publication said in the article: Which emerging markets are in most financial peril?

The ranking examines 66 economies across four potential sources of peril. These include public debt, foreign debt (both public and private) and borrowing costs (proxied where possible by the yield on a government's dollar bonds).

It also calculates their likely foreign payments this year (their current-account deficit plus their foreign-debt payments) and compares this with their stock of foreign-exchange reserves. An economy's rank on each of these indicators is then averaged to determine its overall standing.

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Published: 5/6/2020
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