© Reuters. Moody’s downgrades Peru’s rating outlook to negative over protests
Lima, Jan 31 (EFE).- The Moody’s agency changed on Tuesday the perspective of Peru’s risk rating, both in local and foreign currency in the long term, from stable to negative due to the fact that social conflicts have intensified the threats against governance and its economic strength.
In a report published on Tuesday, the firm said that the change in outlook to negative reflects Moody’s position that “social and political risks have intensified the threats, for the coming years, of a deterioration in institutional cohesion, governance , effectiveness of policies and economic strength in the next governments”.
He also added that the Baa1 “rating” reflects Moody’s position that sovereign solvency remains anchored by the strength of the government’s financial statements and the expectation that Peruvian institutions and policies in general will help contain fiscal erosion and economic strength, despite the pressure of the political and social environment.
In turn, the credit impact score is moderately negative, demonstrating moderate exposure to environmental risks, highly negative exposure to social risks, and limited exposure to governance risks, as a result of strong resilience. economic.
Over the years, Moody’s said, gross regional inequalities have led to ongoing social conflict. The low quality of basic services, including health, education and health, keep the risks latent.
There are segments of the population that demand better public services, which encourages populist policies in the absence of improvements in those services, he added.
However, the agency pointed out that regional inequalities are fertile ground for social discontent, which have finally led to protests in the south of the country at the end of 2022, which have negatively affected governance and economic management in Peru.
