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Moody's Keeps Peru at Baa1 and Flags Fiscal and Project Execution Risks

Low public debt and improved post‑election stability support market access, while successful conversion of mining and infrastructure plans into real investment will determine medium‑term growth prospects.

Overview

  • Moody's on Tuesday maintained Peru's long‑term sovereign rating at Baa1 with a stable outlook, signaling continued investment‑grade access to capital markets.
  • The agency cited Peru's fiscal buffers, projecting government debt near 30% of GDP, as a key strength that helps absorb shocks including a possible El Niño event.
  • Moody's welcomed greater political calm after June's election but said that has not yet produced stronger institutions and warned that weak permitting, social conflict and illegal mining could delay projects.
  • The government dispatched Economy Minister Elmer Cuba to meetings in New York on September 23 to present reforms, reassure rating agencies and encourage private and foreign investment.
  • Analysts say the Fed's recent 25 basis‑point hike raises dollar funding costs and could slow the sol's further appreciation, which would add near‑term pressure on firms that borrow in dollars and on project financing.