Chapter 11: Peru’s GDP Growth From 1992 to 2021: The Role of Investment, Net Exports and the Fiscal Deficit

With the objective of analyzing the development model in Peru that has yielded the best results: a closed economy with internal growth from 1992 to 2021 or an economic model of promotion and trade opening with external growth (pro-export) from 1992 to 2021. This study seeks to analyse the effects of investment, net exports and the fiscal deficit on the economic growth of Peru between 1992 and 2021. Since the objective is to compare and contrast theories, the deductive technique will be used. There is a 95% confidence interval around the conclusion that investment, net exports and the fiscal deficit positively affect the Banco Central de Reserva del Peru (BCRP) reference rate. Our hypothesis that exogenous variables affect the BCRP reference rate has been confirmed by the recent decline in poverty in Peru, which is a direct result of the country’s booming economy and its progressive social programmes. As a long-term factor in reducing household vulnerability, infrastructure development has played a crucial role in this process. It was determined how foreign direct investment, net exports and the fiscal deficit affected the growth of Peru’s GDP from 1992 to 2021.