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Alan Garcia | Alan Garcia: Two Governments Compared to Economic Figures Economic crisis Peru | Economy Peru

The first government of Alán García Pérez (1985-1990), was marked by the worst economic crisis who suffered Peru. In 1988 the country had external debt from $ 520 million, which has deteriorated as a result of the subsequent bad economic decisions of the former president.

Although the first government started with encouraging figures: inflation ranged from 12.5% ​​in April 1985 to 3.5% in September of the same year, increased the salary (18%) of workers, etc. Things did not last long to change.

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Alan Garcia: What happened after hyperinflation?

In 1986, in the absence of sufficient income and investment reactivating the economy, Garcia made a serious decision, limit the payment of external debt up to 10% of exports. This earned him Peru to be considered an "unacceptable country" by the International Monetary Fund (IMF).

Everything started to go wrong: on devaluation the inti against the dollar a year later – before that, US $ 1 was equal to 1 inti; Later, 175,000 ints was needed to get US $ 1-, on state subsidies, control on exchange rate (known as MKC dollar), the increase in prices, at hyperinflation (in 1987 it reached 114.5%) and added a long and so on extreme poverty, – severely affected by terrorism – they brought Peru in an irreversible crisis.

After nationalize banking, the foreign investment of the country was withdrawn, and many banks were closed. Although an attempt was made to change the crisis in 1988, the country had a debt of $ 600 million in its portfolio. The IMF and $ 400 million World Bank.

In addition, between 1988 and 1989, the figure of hyperinflation reached 4497.3%. All of these events, added to the social and political crisis of the moment, led the country to the worst crisis in its brief economic history.

Second chance
In his second government (2006-2011), after 21 years, Garcia again took power in Peru. He became a champion and a defender of investments foreign and local, while boom in the price of metalscontributed economical growth.

On PBI it increased close to 8% in its first year (2006), with 2008 moving to nearly 9%. As an average figure, over the five years of his second government, PBI of the country reached 7.2%. They did things well.

Others economic indicators They also rose during this second period. On private investment, with a base value of $ 48,772 million, rose to $ 116,122 million, achieving a progress of 116.1% compared to its target. On public investment also made significant progress (91.9%), from US $ 9.557 million (base line) to US $ 27.585 million. Surprisingly, the external debt left by the Garcia government, accounted for 31.3% of GDP. With these indicators, it became clear that we are living in the phase of economic boom.

According to data from the Central Reserve Bank (BCR), in this second government he left foreign exchange reserves more than $ 47,000 million. Finally, the fact that added to the economic boom of Garcia's mandate was good times who lived the earth from his own commercial opening with export.

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