Economy of Peru
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Peru |
Peru’s estimated gross domestic product (GDP) in 2007 was $107.3 billion. GDP is a measure of the value of all the goods and services a country produces. Although Peru’s economy remains primarily agricultural, the mining and fishing industries have become increasingly important. Peru relies primarily on the export of raw materials—chiefly minerals and petroleum, farm products, and fish meal—to earn foreign exchange for importing machinery and manufactured goods. During the late 1980s, guerrilla violence, rampant inflation, chronic budget deficits, and drought combined to drive the country to the brink of fiscal insolvency. |
However, in 1990 the government imposed an austerity program that removed price controls and ended subsidies on many basic items and allowed the inti, the national currency at that time, to float against the United States dollar. Although some prices rose rapidly, inflation overall was brought down, and tax reforms helped reduce the national deficit. By the mid-1990s foreign investment was fueling economic growth. The economy again picked up steam after a period of stagnation around the turn of the 21st century. Few of the benefits of economic growth reached poorer Peruvians, however, and unemployment and underemployment remained high. Encarta |
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