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 government debt to GDP will reach 16% of GDP by year end, half that of the 'BBB' median. Furthermore, its economy will likely grow 7.5% in 2010, with little impact on inflation or significant deterioration in the country's external position. An expansion in investment--both public and private--is in large part propelling economic growth. Many of the investments are in areas that will support export growth. Peru was able to implement
