The ratings on the Republic of Peru reflect our expectation that broad fiscal and monetary policy continuity under Ollanta Humala's new government will support stronger economic policy flexibility and growth. In July 2011, Mr. Humala--President-Elect at the time--signaled macroeconomic policy continuity by reappointing the respected president of the central bank, Julio Velarde, and appointing another respected technocrat, Luis Miguel Castilla, to head the finance ministry. Since taking office on July 28, the government has emphasized its goal to promote social inclusion and has laid out plans to increase social and infrastructure spending as well as boost public-sector wages. However, the government has also signaled its intent to implement these priorities gradually and within the limits of a prudent fiscal approach
