The risk rating agency Moody’s Investors Service issued a report in which it considers that the President Pedro Castillo he would not finish his mandate, in the midst of a context where two vacancy motions have been debated and in which a high political polarization, uncertainty and contraction of investment remain.
“We believe that Castillo is unlikely to finish his term, which runs until 2026, and that he will either be removed from office or resign. We also anticipate that Peru’s orthodox macroeconomic policy framework will continue to support the country’s solvency. Moody’s.
The agency also noted the constant change of ministers during the Castillo administration.
“The multiple change of cabinets reflects the inexperience of the Government, its unpopularity and the supposed fight against corruption,” the document reads.
Despite this, Moody’s highlighted the work of the officials of the Central Reserve Bank (BCR) and the Ministry of Economy and Finance (MEF).
“Despite the political paralysis and the inability to push through reforms to improve productivity, the creators of public policies from the Central Bank and the Ministry of Economy have maintained credibility with investors throughout the Castillo administration and have navigated the political turbulence with minimal consequences for the economy”, the rating agency remarked in its report.
