Fitch Ratings decided maintain the BBB rating with a negative outlook for Peru. According to the international agency, credit risks remain high amid weakening governance, political stability and growth prospects, which will be challenging for the country.
“Deep-entrenched governance challenges and growing political uncertainties will continue to impede reform and policy initiatives and undermine prospects for economic growth. Fitch believes that the economic disruption of political dysfunction and social unrest is becoming more evident and will be difficult to reverse during our forecast period to the end of 2024which could affect the macro and fiscal trajectory of the sovereign in relation to the ‘BBB’ pairs”, summarizes the international rating agency in its report.
meager growth
Fitch Rating expects the national economy to grow just 1.8% in 2023, due to weakening global and domestic demand amid tighter financial conditions. In addition, despite the increased production of copper from the mine quallaveco and a fiscal support program, estimates that private investment will fall, as a result of high political uncertainty.
“We believe that direct cash transfers to the households of With Punche Peru (0.8% of GDP) will support activity somewhat, but we expect the overall program to have limited impact on investment and growth prospects this year amid the political climate.”
Source: Larepublica
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