Peru: Fitch Affirms Sovereign Rating (BBB) ​​and Maintains Negative Country Outlook | Peruvian Economy | Depression | Latest | economy

Appraisal Agency Fitch Ratings Affirms Sovereign Rating (BBB) ​​and Maintains Negative Outlook to PeruIn an environment The government has realized that the country’s economy is in recession.

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According to Fitch’s report, The negative outlook reflects high levels of political uncertainty and further deterioration in governanceThis affects private investment and economic growth opportunities.

“Given the administrative challenges since his inauguration, we believe. (President Tina) Polwarte will face challenges in getting the reforms approved Important in a divided Congress“, he pointed out.

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Besides, The political environment underscores the risk of damaging medium-term growth potential And it prompts an expansionary policy to support the economy and address social unrest. This may impact the financial trajectory relative to ‘BBB’ rated peers.

Fitch notes Peru’s BBB rating is based mainly on moderate public debt and strong external liquidity and achievement of macroeconomic stability of the country.

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However, The rating agency cuts its growth forecast for Peru to 0.3% (It was 1.8% in April) and expects growth of 1.9% next year.

Fitch expects Fiscal deficit widened to 2.6% of GDP, well above the target for this yearIt was 2.4% of GDP, mainly due to a sharp drop in tax revenue, which was offset by a drop in spending.

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Another thing the company emphasizes is that The financial outlook faces uncertainty due to the higher-than-expected impact of the El Niño event and/or additional financial aid.