07 April 2020 by jbchevrel
Pre-covid and pre-roll, Peru 5y CDS was 42bp. post-roll post-covid it peaked at 164bp on our close-to-close monitor. It is now 122bp tonight. While lockdown measures have been toughened recently, not just in Peru but all over the world, the Peruvian government has announced that some 12 % of GDP would be invested in order to fight against the spread of the covid19. This economic plan is unprecedented in Peru and the Finance Ministry Maria Antonieta Alva argued that it was “responsible”, fiscally speaking, to be at the height of the crisis Peru is facing. Earlier last week, the chief of state Martin Vizcarra had announced an ‘ambitious plan’. In total, $26B will be unlocked in order to respond to the health emergency currency taking place. While growth projections were in the area of +3-4% for this year, it is now probable that Peru will grow +1% if not less. Like everywhere else in the world, Peru is facing difficulties with covid19, with ~3k official confirmed cases and ~100 dead, as of Sunday April 5. President Vizcarra, who declared the state of emergency very early on (March 15) while less than 100 cases were officially confirmed, has imposed a drastic lock-down, closed all borders and imposed a curfew between 6 PM and 5 AM. Measures have been officially extended until April 12, going crescendo. Interestingly, since last Thu. April 2 differentiated exit days have been implemented for people, 3day-3day. Nobody can go out on Sundays, in particular no religious gathering is tolerated. This measure was surprising but was also taken in Panama. According to the central bank of Peru, the economy is 70% paralyzed, compared to normal situation.