1887

Economic Survey of Latin America and the Caribbean 1986

image of Economic Survey of Latin America and the Caribbean 1986

In 1986 the evolution of the Latin American economy was marked by contradictory changes. While the main variables used to measure domestic economic performance showed some improvement, the situation of the external sector worsened considerably. Thus, although the rate of economic growth picked up and unemployment and inflation slackened, the terms of trade worsened, the trade surplus fell and the balance-of-payments deficit increased sharply.

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Peru

During 1986 Peru made substantial progress towards the principal objectives laid out in the July 1985 Emergency Economic Programme. Nevertheless, this progress was achieved at a certain cost. The heterodox economic policy implemented by the government did indeed reduce some imbalances —the excess of idle installed capacity, high unemployment, inflation, depressed real wages, the large-scale dollarization of the economy, and the heavy burden represented by the service on the external debt— but this was done at the expense of exacerbating the imbalances in other spheres of the economy.

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