Stable to negative due to the intensification of protests and political uncertainty. Moody’s considers that this scenario may end up affecting private investment, the engine of growth of the economy. From stable to negative The intensification of protests and political uncertainty is taking its toll on Peru. Moody’s changed the country’s rating outlook from stable to negative. The rating precedes a similar assessment by both Fitch Ratings and S&P Global Ratings, which changed their outlooks for the country to negative in October and December of last year, respectively. It should be noted that Moody’s warned that it could lower the country’s rating if social and political instability persists; or by events that undermine the macroeconomic institutions of the country, such as an eventual constituent assembly.
Future Stable to negative economy
According to the rating agency, the future scenario could become even more complicated. He warns that uncertainty may end up affecting private investment, the engine of growth in the economy. Stable to negative “Persistent political and social disruptions risk further eroding investment. With negative consequences for Thailand WhatsApp Number Data economic strength,” they note. For Moody’s, although business confidence was recovering in the last part of the year, social unrest and uncertainty about the result of the next general elections and, in general, the political environment in the coming years represents a risk that can persist in a lasting way in investor confidence and economic activity.
What could reverse the rating?
According to the press release, the rating could be changed to stable if the social and political situation eases. “Political conditions that result in a government that is willing Japan Telegram Number and able to maintain policy continuity. Would support economic and investment prospects and the maintenance of conservative fiscal management,” the report notes. Likewise, Moody’s assures, a more harmonious political environment that strengthens Peru’s institutions would be key to regaining perspective. The report also refers to the impact of a constituent assembly, which would also mean a risk for the rating. “The institutional uncertainty arising from a constitutional process initiated with the intention of instigating a broad review and modification of the economic model and policy framework would weaken the structural foundations of Peru’s credit profile and could also lead to a downgrade,” he concludes.
