Regaining the economic path and credibility are the keys to overcoming the S&P downgrade

The downgrade of seven Peruvian entities was something that was expected after the rating of Peruvian sovereign bonds. This is certainly something worrying and serious. To understand the extent of gravity, it is an issue that affects everyone, because what will cause is an increase in the cost of credit to companies and individuals. It also occurs within a context where inflation in the country is high, an inflation that is outside the target range of the Central Reserve Bank, with which it has been struggling to control it and hoped to mitigate it by the end of the year. Now, this is coming and the increase in credit is an element that will put greater pressure on prices. On the other hand, we are experiencing a situation of high fuel prices, which will end up hitting final consumers, and especially the poorest families, whose basic basket is highly concentrated in food.

Another element to take into account is that at the moment — luckily — Peru is going through a favourable situation due to the high price of minerals, which in some way serves as an analgesic to alleviate these situations. The risk is that it may be okay today, this year and not next year. And if prices were to fall, the economic situation could become even more delicate.

It is true, high inflation is a global issue, and we are all struggling, but what S&P has pointed out is that the downgrade has to do more with a domestic position and the impact of domestic policies. The emergence of politics in the economy, then, has more to do with us.

How long will this situation last? It will be until reliability is restored, and that is harder to work, because everyone knows that trust is lost in a second and earned with hard work. The government must give clear signs that it will change, or set its way on the issue of economic management, and that it will do so in a serious way.

It is the duty of the State to correct what may have failed, regardless of any ideology or political position.

The Minister of Economy and Finance, Oscar Graham, has given indications that this is his intention, which is a good sign for the national and international financial system. Much of the pressure he put on the alleged mismanagement in Petroperú has to do with regaining confidence in some entities of the State and the State itself so that this does not happen again.

The feeling is that the MEF will be very alert and trying to figure out how to control this situation. In fact, we haven't seen such a strong MEF for several months and that gives us hope to regain serious management of the economy.

Finally, it is an act of responsibility not only towards the business sector, which obviously it is, but also because that effect is transferred to the public. It would be dramatic to see sovereign debt lose international value, hitting Peruvian companies and this moving towards citizens.

Regarding the impact of the MiVivienda Fund and Cofide, they are entities that have put their chest, and they support themselves, because they have the strength. But if there were any problems, is the State able to support it? It is probably this doubt that causes the increase in risk and therefore the lower rating in this case of these two entities. We have to work to get back on track and regain credibility.

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