After the victory of the candidate of the Historical Pact, Gustavo Petroin the presidential elections on Sunday in Colombiathe rating agency Moody’s He referred to the results and the challenges ahead for the new president.
Gustavo Petro’s victory in Sunday’s elections will test the ability of institutions in Colombia to ensure continuity in the prudent management of the macroeconomy,” said Renzo Merino, senior vice president at Moody’s.
The rating agency is the first to refer to Petro’s victory and said that one of the challenges for the president-elect has to do with governance for the next four years. “Given that the next president will lack legislative majorities, it will be necessary to generate political consensus to advance his government program,” Merino added.
About him Colombia credit profile, the agency says that the initiatives to solve the problems of inequality and poverty can be positive for the Colombian note. “It can be positive for the sovereign credit profile to the extent that it allows social tensions to be reduced without notoriously affecting fiscal sustainability,” explains Merino.
However, Moody’s senior vice president added that “negative shocks that undermine investor confidence would impact economic growth, weighing on the fiscal consolidation process and credit prospects.”