September 25, 2021. Lima, Peru.- Fitch Ratings rating agency highlights that the country is working to implement a credible tax consolidation strategy.
The clarity and credibility of Peru's tax consolidation plan, as well as the specific stabilization of debt over gross domestic product (GDP) in the medium term will be important for the trajectory of the country's credit rating, according to the rating agency Fitch Ratings.
The entity reported that our nation's debt in relation to GDP increased to 34.8% in 2020 (still below the median of the BBB rating), compared to 26.8% registered in 2019.
“Peru's stabilization fund ran out last year to combat the pandemic. The participation of the country's foreign currency debt is in line with the median of the BBB rating, but it is expected to rise in the next two years, as external sources finance subsequent deficits,” he said.
However, according to the international agency, on the economic level there is confidence in the sustained macroeconomic stability of the country, as well as favorable prospects for economic growth after the pandemic.
Regarding public finances, the rating agency said that Peru is working to implement a credible tax consolidation strategy that can stabilize public debt over GDP.
There is an improvement in governance standards and strengthening of institutional capacity, he said.
“Policy coherence and the government's ability to boost investments, which are already underway, and also to implement microeconomic reforms, including support for labor market flexibility and newer challenges, such as the sustainability of the pension system, will be essential for Peru's economic prospects,” Fitch Ratings stated.
Last Monday (September 20), before a group of businessmen in the United States, the President of the Republic, Pedro Castillo Terrones, said that they have open doors and called on them to invest in the country with confidence and without doubts, but also with clear rules and respecting the rights of Peruvians. He commented that Peru's external finances remain solid, with an international liquidity ratio of over 200%.
Source: El Peruano