Paper Sample on Peru Economy in 2020: GDP Declines

Introduction

The article discusses the state of the economy for the first half of the year, where the author notes that there has been a sharp drop in GDP in Peru where the economy is growing at a rate of 3.8%, which is a 40.49% decline (Aquino, 2020). The decline in economic growth is attributed to unforeseen challenges that the Peru economy is facing. The challenges include the national lockdown that implemented by the state to help in the fight against coronavirus disease where people were denied the freedom to work. The author argues that the performance of the economy relies on the output of the employees; hence the lockdown slowed the output, and as a result, the growth of the economy declined.

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The author states the most affected sectors of the economy include construction, fishing, and manufacturing that accommodated many employees. The employees from the affected sectors are unable to continue with their lives with the companies them while working for having closed down (Aquino, 2020). The author states that there will be a slow economic recovery because coronavirus continues to spread with more people being affected. The economy of Peru will also be affected by the economic closure of other countries that are also struggling to recover from the effects of coronavirus to the economies. Peru relies on copper export as major economic factors that contribute to the growth of the economy. Other countries are unable to buy the copper because of the reduced market in the world.

Generating More Jobs

The article addresses the issue of unemployment in Peru, which is 13.1 percent of the total population. The Peruvian government has been making efforts to solve the issue by generating more than a million jobs. "Start Peru" program is an investment that requires approximately S / 6,436 million (Pighi, 2020). The program will yield results from the second half of this year. The four sectors of the investment in this program are housing, agriculture, communications, and transport. These are key sectors of the economy whose focus will not only create employment but also boost Peru’s economy.

In the transport and communications sector, the government will require an additional; S/ 3,897 million, which will be used in maintaining the road network (Pighi, 2020). To achieve this, approximately 500,000 people will be employed. The government also plans to improve the cities by constructing dams and improving public spaces. Investments in these projects will cost approximately S/ 937 million, but 57,000 jobs will be created.

In the housing sector, the government plans on building approximately 60,000 homes, but additional 20,000 homes will be built with an authorized budget of S/ 694million (Pighi, 2020). This sector alone with creating 80,000jobs. The agriculture sector is another area that the government plans on investing in, especially on drains maintenance. The agricultural sector will receive S/ 373 million, and in return 76, 555 jobs will be generated. The country already has a "Work Peru" program in the labor sector, and what is needed is to reinforce it with S/ 694 million to create at least. 226,000 jobs.

References

Aquino, M. (2020). Peru posts worst-ever drop in GDP as mine output falls sharply. Reuters. Retrieved 6 July 2020, from https://www.reuters.com/article/peru-economy-gdp/update-1-peru-posts-worst-ever-drop-in-gdp-as-mine-output-falls-sharply-idUSL1N2DS1IG

Pighi, P. (2020). The government announces "Peru starts," a program that will generate more than a million jobs. www.peru.com. Retrieved 6 July 2020, from https://peru.com/actualidad/economia-y-finanzas/gobierno-anuncia-arranca-peru-programa-que-generara-mas-millon-empleos-noticia-61410