The vice president of Moody’s Sovereign Risk Group, Jaime Reusche, warns about the impact of the vacancy of Dina Boluarte in the risk rating and in the economy would be limited.
A new presidential vacancy, what impact could it have on the risk rating?
It is something that is becoming recurrent in the Peruvian case and, once again, reflects the political instability that characterizes the country. It is an issue that we had already addressed and that motivated the negative outlook that we maintained until the end of last year.
Could the fact that there is political instability again trigger a negative outlook on the rating?
No, unless it is a transitional government that sets aside fiscal responsibility and the commitment to the macroeconomic and fiscal stability of the country, which, at this time, is highly unlikely, even if said transitional government were to come to fruition.
How might markets react?
Financial markets could register a slight negative reaction in the coming days due to the resurgence of political instability generated by the vacancy motion. However, this should not have a significant impact on the functioning of the economy.
Who should be the new Minister of Economy?
Let’s hope that a good independent technician is chosen, as has been tradition, but above all that he is allowed to work responsibly, something that we have not seen in recent years. The constant turnover in the Ministry of Economy has significantly hindered its actions, and therefore the public sector is not functioning adequately.
Could the reasons for this vacancy make the public lean towards an authoritarian candidate?
We will have to observe how the population reacts and how electoral preferences evolve, since there is always a high degree of uncertainty. The Peruvian voter typically does not define or commit to a candidate until shortly before the elections.
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