Lima, May 23, 2021.- The resilience of the Peruvian economy and fiscal strengths allowed Moody’s to ratify the A3 rating of Peru's long-term foreign currency debt, informed the Ministry of Economy and Finance (MEF).
Thus, the effort made in the last year to implement measures aimed at boosting the economy, recovering employment and facing the pandemic, which were taken in a responsible manner, without neglecting fiscal sustainability, was recognized.
According to Moody’s, the ratification of the A3 rating is due to the fact that credit fundamentals continue to be solid, reflected in a rapid recovery of the Peruvian economy for the following years.
This affirmation is in line with the projections of the Macroeconomic Projections Update Report, published last April, which estimates that the economy would reach a growth rate of 10% in 2021 and an average of 4.5% for 2022-2024. Last March, the Gross Domestic Product (GDP) grew 18.2% and leading indicators suggest that this recovery will continue in the coming months.
Likewise, the MEF stated that the rating agency highlighted the country's macro-fiscal strengths.
Peru’s fiscal soundness is reflected in the low level of government debt and its low refinancing risk with an average debt life of 13.1 years.
Moody’s also highlighted Peru's prudent fiscal policy framework, which allowed for the accumulation of substantial fiscal savings over the last decade, a factor that has been key to implementing an important economic policy response and not putting fiscal sustainability at risk.
“The political events of the last year, the spending initiatives by Congress and the effects of covid-19 could compromise our macro-fiscal strengths, one of the most important assets the country has, as a result of the work and effort of Peruvians during the last 20 years; therefore, it is necessary to safeguard it with a responsible and prudent management for the benefit of all”, explained the Minister of Economy and Finance, Waldo Mendoza.
In contrast to other countries that have received successive downgrades, especially in the context of the pandemic, Peru continues to be one of the few emerging countries that have not had their credit rating downgraded in the last seven years.