The ratings on Peru are supported by the government's commitment to economic stability and a positive investment climate that will underpin solid growth through 2012, despite the sharp slowdown in 2009. The government has maintained prudent fiscal and monetary policies over the past decade, despite political uncertainties. After running fiscal surpluses over the past three years, leading to significant declines in net general government debt, Standard&Poor's Ratings Services believes the government will run modest deficits of 1%-2% of GDP from 2009-2011. Therefore, net general government debt likely will remain close to 20% of GDP over the next three years, well below the 'BBB' median. Inflation is well contained, although the level of dollarization in the financial system remains
