Credit ratings and country risk

This article examines country risk ratings and their implications for the Peruvian economy, focusing on the methodologies used by rating agencies, as well as the impact of these ratings on the international perception of the country’s creditworthiness. It analyzes the context of the ratings Peru received in the 1990s, highlighting the differences between the assessments by Moody’s and Standard & Poor’s, and discusses key concepts such as country risk, sovereign risk, and credit risk. Using a mixed-methods approach that combines qualitative and quantitative methods, the study examines the factors that determine ratings, such as the ability to service debt and relevant economic indicators, including the fiscal deficit and external debt. The results suggest that, despite improvements in Peru’s macroeconomic performance, the rating is constrained by political problems and internal vulnerabilities. The implications for national economic policy highlight the need to focus on fiscal consolidation and political stability to improve the country’s credit rating and attract investment flows. (Abstract and audio: Department of Economic Publications)