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Recent data shows a decrease in Peru's unemployment rate, signaling a positive economic trajectory. The link between lower unemployment and economic expansion will be investigated. The continual drop in unemployment implies that the economy is ready for prosperity, providing optimism for a better future for Peruvians as more individuals secure jobs and support overall economic progress.
Unemployment in Peru is a major economic issue that needs to be closely watched, particularly in South American countries with a distinct and vibrant culture.
Unemployment, which refers to the number of people unable to find work at a given time ("Unemployment," 2003), can be influenced by various factors like the economy, individual skills, job availability, and layoffs.
Over the last ten years, Peru's unemployment rate has been declining steadily, leading to improved economic stability for the country. Current data shows that this trend is continuing.
The unemployment rate in Peru is closely tied to the economy, particularly its connection with the Gross Domestic Product (GDP).
According to Levine (2013), a negative correlation between unemployment rate and GDP suggests elevated levels of unemployment.
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The GDP is a vital indicator of a nation's economic status, and in Peru, as the unemployment rate has declined recently, the GDP has started to increase.
In the past decade, Peru has seen a remarkable economic growth, with its GDP rising from $61.347 billion to $197 billion and the unemployment rate dropping from 10% in 2003 to 5.6% currently ("Peru GDP," n.d.; "Peru Unemployment Rate," n.d.). This indicates a general enhancement in the country's economy.
With the growing economy, there is an increase in income leading to a better standard of living.
As unemployment decreases, new job opportunities are created and existing employees may see salary increases.
In Peru, approximately 562,000 new jobs have been generated recently and this trend is expected to continue (Thompson, 2012), improving the quality of life for Peruvians. To sustain this economic growth, Peru needs to attract investments and stay updated on global developments (Thompson, 2012). Additionally, higher-paying job opportunities in fields like accounting, engineering, law, and psychology are on the rise and will further contribute to boosting the economy.
As both formal and informal job markets expand, more individuals will have the chance to launch their careers. The growth in various global sectors will enable more exports and enhance economic flow. This shift in employment will contribute to Peru's economic growth and improve living standards.
The relationship between the decreasing unemployment rate and the economy also affects inflation, with projections showing a drop to around 2.7%, nearly 2% lower than in 2011 ("Economic Outlook," 2013). Monitoring this inflation is crucial for Peru to maintain its economic stability and avoid potential damage due to price increases. Keeping inflation within the target range will help the country sustain its current economic progress.
The data trend for this economic concern and how it affects the economy suggests that economy will continue to improve. As seen below in Chart 1, the trend shows that the unemployment rate has been decreasing for a decade and should continue to decrease unless something unforeseen happens. It shows although with several spikes that the data if following the averages is decreasing slowly (“Peru Unemployment Rate,” n.d.). This means that the economy will also continue to improve for Peru. This is portrayed in correlation to the increased GDP in chart
Over the past decade, there has been a consistent rise in GDP, suggesting overall economic growth ("Peru GDP," n.d.). The correlation between GDP and unemployment is clear - a decrease in unemployment results in higher GDP as productivity improves with a larger workforce.
The two graphs show the economic progress in Peru from 2003 to 2013, suggesting a continuation of this positive trend. Chart 3 displays Year-on-year inflation by percentage (“Economic Outlook,” 2013), revealing a decrease in inflation rates within the target range for inflation over the past year. Inflation, described as a gradual price increase (Editorial Board [EB], 2011), is a crucial indicator of a country's economic well-being. A decline in inflation could potentially lead to lower wages. Despite concerns about possible wage reductions due to decreased unemployment, overall data indicates an ongoing pattern of economic improvement for the people of Peru.
Peru has experienced a remarkable economic transformation in the past decade, with a decrease in unemployment and a notable rise in Gross Domestic Product. The country has effectively controlled inflation, maintaining it within the desired range. These advancements have positioned Peru as one of the most prosperous economies, providing hope for future generations. Chart 1: (“Peru Unemployment Rate,” n.d.).
Chart 2 titled "Peru GDP" is from the source with no date available.
The chart titled "Economic Outlook" was released in 2013.
References
BBVA Research. (2013). Economic outlook peru. Retrieved from BBVA Research
Editorial Board. (2011). Macroeconomics. Schaumburg, IL: Words of Wisdom. Retrieved from Words of Wisdom
Levine, L. (2013). Economic growth and the unemployment rate. Congressional Research Service. Retrieved from Congressional Research Service
Peru GDP.(n.d.). Trading Economics.Retrieved fromTrading Economics
Peru unemployment rate.(n.d.). Trading Economics.Retrieved fromTrading Economics.
Thompson, M.A.(2012). Employment trends: Peru.GoingGlobal.Retrieved fromGoingGlobal.
Unemployment.(2003).In The Macmillan Encyclopedia.Retrieved fromThe Macmillan Encyclopedia.
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Peru's Economic Growth: Decreasing Unemployment, Increasing Prosperity. (2016, Apr 26). Retrieved from https://studymoose.com/unemployment-in-peru-an-economic-concern-essay
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