Overview
- Moody’s on Tuesday maintained Peru’s sovereign rating at Baa1 and kept a stable outlook, saying greater political predictability since June could make policy more predictable and support private investment.
- The agency projects public debt near 30% of GDP and foresees real GDP growth around 3%–3.5% for 2026–27, while warning that weak institutions and delays in executing mining and infrastructure projects could cut those gains.
- Moody’s flagged structural fiscal risks from permanent increases in public‑sector pay and benefits approved by Congress without offsetting revenue, which could squeeze funds for investment and emergency response.
- Higher U.S. interest rates are already shifting market conditions: the Fed raised its policy rate on Sept. 16 and Peruvian economists say that raises dollar funding costs for local firms, slows the sol’s adjustment, and narrows carry advantages given the BCR reference rate at 4.25%.
- Moody’s factors in a potential El Niño shock for 2026–27 but judges Peru’s fiscal buffers and access to financing reduce the risk of a long slump, though household and company finances could face strain if project delays, higher borrowing costs, or weather damage materialize.