Moody’s Sweetens Peru Outlook

Moody’s has changed the outlook on Peru’s Baa3 rating to positive from stable. It cites favorable growth prospects sustained by continued improvement of Peru’s fiscal and debt metrics, expected policy continuity and receding political risk. “The positive outlook recognizes that the threat that an anti-system candidate could derail Peru’s current economic path – a longtime constraint of the country’s credit rating – has diminished significantly,” Moody’s notes. Local opinion polls show former president Alejandro Toledo in first place, with nationalist Ollanta Humala practically tied with Keiko Fujimori for second place, former Lima mayor Luis Castaneda in third place and former prime minister Pedro Pablo Kuczynski in last place. First-round elections will take place April 10. “Any of the five leading candidates has a chance to make it to the run-off,” says Goldman Sachs. “Voters are not seeking a radical change in policies, but improvements that could reduce income inequality and poverty levels,” it adds.