Fitch Lowers Outlook on Peru to Negative From Stable

By Stephen Nakrosis

Fitch Ratings on Thursday said it lowered its outlook on Peru to negative from stable, and affirmed Peru's Long-Term Foreign Currency Issuer Default Rating at 'BBB.'

"A deterioration in political stability and government effectiveness has increased downside risks to Peru's ratings," Fitch said.

The agency said high turnover in the cabinet as well as a pair of failed impeachment attempts "have sustained political tumult." Several corruption investigations involving directly the president or close affiliates, along with frequent rotation of ministerial positions, have undermined government effectiveness, according to Fitch. "Private investment has fallen, a fiscal liability has materialized, and policy implementation has slowed as a result of the political volatility," Fitch said.

Fitch also said it has revised its 2022 real GDP growth forecast downward, to 2.3% from 2.5%. "Political instability is weighing on Peru's already subdued economic growth outlook, with social conflicts disrupting mining production and high cabinet turnover slowing public investment this year," according to Fitch.

Write to Stephen Nakrosis at [e-mail]

(END) Dow Jones Newswires

10-20-22 1408ET