...State Support: The issuer default ratings (IDRs) of Peru's four state banks are aligned with the sovereign's (`BBB+'/Stable). Fitch Ratings considers the propensity of sovereign support to be strong given Banco de la Nacion's (BN) importance for tax collection, public sector payments and financing of government operations, while Banco Agropecuario (Agrobanco), Corporacion Financiera de Desarrollo (COFIDE) and Fondo Mivivienda are key to developing priority sectors of the economy. Relatively Smooth Economic Adjustment: Peru entered a period of markedly slower growth in 2014, due to lower commodity prices and reduced foreign direct investment. As of December 2015, Fitch forecast that real GDP growth could recover to 2.9% for full-year 2015 and 3.8% in 2016 (from 2.4% in 2014) on the basis of rising mining production and policy stimulus in the form of infrastructure investment. Political Influence and Reputational Risks: Given their ownership and roles in supporting public policy, the government...
