Peru | Equity and growth

Summary

The "Report on Global Inequality" suggests that the distribution of income in Peru has improved, but it must be taken with caution because it is volatile and does not yet fully reflect the impacts of the pandemic on families.

Key points

• Key points:
• The "Report on Global Inequality" published last week highlights the great disparity in income and wealth that exists in the world: the richest 10% of the population account for 52% of income and 76% of wealth. In contrast, the poorest 50% receive only 8.5% of income and own only 2% of total wealth.
• In Peru, the evidence suggests that inequality has decreased in the past two decades, but, as in the rest of the region, it remains high.
• The view that less inequality contributes to higher economic growth has gained space in recent years. But we must be careful with government intervention to reduce inequality because if they distort the incentives to produce it reduces growth, which hurts the most vulnerable. Highly targeted subsidies, greater access to quality education and employment promotion policies are alternatives that could induce positive impacts.

Geographies

Topics

Tags