Business confidence has improved consistently since 2025, compensating partially for negative external shock impacts. If positive dynamics in investment and internal demand persist, Peru’s potential growth could stabilize between 3.5% and 4.0% in coming years, surpassing the sub-3.0% trend that characterized the previous decade. The agency noted that public investment execution to mitigate El Niño impacts and response capacity to additional shocks will determine whether this pace proves sustainable.
On fiscal matters, Moody’s views favorably a recent Constitutional Tribunal ruling permitting the Ministry of Economy and Finance to challenge spending legislation deemed fiscally risky. The decision strengthens control over rigid expenditure, which Merino identified as critical for fiscal sustainability. Peru’s revised fiscal consolidation path raises the non-financial public debt ceiling from 30% to 32% of GDP, yet this still positions the country advantageously compared to Latin America’s approximately 60% average sovereign debt-to-GDP ratio.
Moody’s considers state oil company Petroperú a relevant contingent liability for fiscal accounts but notes Peru’s exposure remains manageable, with the company’s debt falling well below 10% of Mexico’s Pemex liabilities, which exceed $100 billion. The agency cautions that Petroperú’s financial and operational situation requires close monitoring, as deterioration could increase fiscal sustainability risks if state intervention becomes necessary. Moody’s is scheduled to conduct a formal review of Peru’s credit rating in September 2026, with fiscal discipline, institutional credibility, and contingency management including Petroperú identified as fundamental factors.
This article was curated and published as part of our South American energy market coverage.
