S&P Affirms Peru Rating

S&P has affirmed Peru’s BBB minus ratings and kept the outlook on the sovereign stable. “The ratings on Peru are supported by the government’s commitment to economic stability and a positive investment climate that will underpin solid growth through 2012, despite the sharp slowdown in 2009,” says S&P credit analyst Richard Francis. He says he expects Peru’s external indicators to remain robust, despite the fact that the current account balance swung to a deficit of 3.3% of GDP in 2008 and likely will remain in a deficit of 2%-3% of GDP through 2011. External debt net of liquid assets is expected to remain at less than 10% of current account receipts, compared with the BBB median ratio of 34%. “We expect gross external financing needs to current account receipts plus usable reserves to remain at less than 80%, well below the BBB median ratio of about 115%,” he adds.