A solid track record of sound macroeconomic policy, characterized by high economic growth, low inflation, and declining public debt. Strong growth prospects over the medium term, supported by a diversifying economic structure. A solid improvement in the country's external position. Still-evolving political institutions, in the context of significant economic, social, and ethnic fragmentation as well as high poverty. Monetary vulnerability, derived from a significant (albeit declining) level of financial dollarization. The rating on the Republic of Peru is supported by the steady improvement in the country's external indicators and the government's debt ratios. These improvements are a result of low fiscal deficits and high economic growth, with higher levels of investment and economic diversification. We expect that Peru's net general
