Fitch Ratings: Anti-Business Policies, Poor Conflict Resolution and Government Grievances Are Stifling Investment

The bad policies applied in Peru are affecting private investmentFitch Rating warns.

Deputy director of Fitch Ratings Hector Collantes commented to the Gestión newspaper that now the country cannot consider politics and economics separately.

” politics vs businesspoor conflict resolution and allegations of bribery by the[Pedro]Castillo government have stifled investment,” Collantes said.

A Fitch Ratings spokesperson noted that expectations in the country are not at the best level.

“Expectations are low, mining is down and labor regulations are out of balance amid rising inflation and lower metal prices,” he said.

Despite this, it is still noted that from the general Business the rating agency evaluates, 75% have a stable outlook for their rating, 12% have a negative outlook, and 13% are in positive territory.

Until last week, they indicated that companies’ risk ratings were downgraded twice and upgraded twice this year.

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Fitch Ratings indicates that it recently downgraded its GDP growth forecast for 2022. The Peruvian economy was previously expected to grow by 2.5% this year, but is now expected to grow by 2.3% due to lower mining output.

“Growth will be limited fiscal policy and tighter monetary policy, higher oil prices, falling copper prices and uncertainty about resolving social conflicts,” Collantes said.

In addition, he noted that a recovery in the labor market can be seen, but job creation remains largely informal and wage growth is unsustainable.