June 18, 2014
Economic package set to stimulate growth, says ratings agency
A series of economic stimulus measures, unveiled by Peru’s government last week, is set to boost GDP, Moody’s said this week.
The government approved a package of structural reforms on June 11, including tax and labor overhauls. With a turning commodities cycle pressuring GDP growth, the package also seeks to diversify the economy.
The ratings agency says the changes could raise medium to long-term potential growth and lift business confidence in the short term.
“Importantly, the draft laws contain measures to cut bureaucratic red tape for getting investment permits, an area about which the business community has been vociferously negative,” the ratings agency said, declaring the measures in aggregate “credit positive”.
Peru has a large pipeline of infrastructure projects, and the country is expected to be fertile ground for project financing transactions in the months and years ahead. Deals in the pipeline include a potential Peruvian-sol denominated bond from construction firm Graña y Montero.
Meanwhile, the sovereign took a step closer to a bond market return last week, when it filed a shelf registration with the SEC for a deal. LF