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Fitch Ratings: Market waits for signal of political change to consider future investment in Peru

According to Fitch, Peru’s GDP will grow by 2% this year. | Fountain: Andean

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Peru will have only one height by 2% during 2023 and 2024, according to the forecasts of the rating agency Fitch Ratings.

Growth forecast is lower than the average for countries with a rating of “BBB”, the same as that of the Peruvian debt. What is now expected from Peru?

A recent report published by Bloomberg indicates that Fitch Ratings believes that political instability creates a significant risk of reducing foreign investment and economic growth.

“Many investors and markets are waiting for any sign of political change to consider future investment,” Fitch notes.

At the moment, it is expected that activity in the international market for corporate debt in 2023 and warns of risks that the country’s macro-fiscal trajectory could face in the medium term if adverse conditions persist.

“The weakening investment and economic outlook, if sustained in 2023 and 2024, as Fitch predicts, could undermine the sovereign’s macroeconomic and fiscal trajectory relative to its ‘BBB’ peers. More restrictive monetary and fiscal policies have slowed down domestic demand.” says in the report.

The deputy director of the agency, Hector Collantes, points out that the reasons social instability In Peru, which has been faced in recent months since Dina Boluarte came to power, there are several, but he emphasized that the main trigger is political, “and the problems are concentrated geographically”, for this reason the consequences are unevenly distributed.

“While active checkpoints were reduced to six on February 27, 2023 from a peak of 127 on January 19, 2023, and the pro-business principles of the Peruvian legal framework remain, there is no clear way out of the crisis,” he said. Bloomberg.

Source: RPP

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