The new Castillo administration has signaled its desire for broad continuity in macroeconomic policy. However, a fragmented political environment and a difficult social legacy from the pandemic could hurt Peru's medium-term growth prospects and worsen its debt metrics. We therefore revised the rating outlook on Peru to negative from stable and affirmed our 'BBB+/A-2' foreign currency sovereign credit ratings. The negative outlook reflects the at least one-in-three chance of a downgrade over the next six to 24 months if political challenges lead to poor economic performance that worsens the sovereign's financial profile. On Oct. 14, 2021, S&P Global Ratings revised the outlook on its long-term ratings on Peru to negative from stable. We affirmed our 'BBB+' long-term foreign currency and
