The economic recession in Peru, where inflation is currently running at 130 per cent, is causing concern to the authorities, and hardship to most people.
TV Street in Lima.
GV Government House.
GV EXT & SVs INT Bank; Exchange rates on wall, and customers paying-in money. (4 SHOTS)
GV Hundreds of pedestrian in main street.
GVs Market trader, and trays of vegetables showing price labels. (3 SHOTS)
SVs Shop windows with clothes - price slashes in closing-down sale. (2 SHOTS)
TVs Market. (2 SHOTS)
GVs & SV Street traders. (3 SHOTS)
SV & GV People filling car tank with petrol at station. (2 SHOTS)
GVs, SVs & CUs Soup kitchen, with soup being served. (5 SHOTS)
GVs Factories on industrial estate. (5 SHOTS)
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Background: The economic recession in Peru, where inflation is currently running at 130 per cent, is causing concern to the authorities, and hardship to most people. The crisis has been aggravated by the worst floods and drought recorded in the country this century. President Terry Belaunde's efforts towards stability are being undermined by the Maoist Sendero Luminoso (Shining Path) guerrilla movement, which is bent on destroying his elected government. Trade has been hard hit by inflation, and many small businesses in Lima have had to close down. Street traders are also finding customers hard to come by. Even fruit and vegetables, reasonably priced by tradition, have been effected by recent increases in petrol prices, which have pushed up the cost of transport. With more than half of all workers now unemployed, the number of totally destitute people is growing at an alarming rate. The recession has undermined the popularity of the three-year-old civilian government, which has been forced to impose drastic measures to reduce soaring budget deficit. The deficit problems stem from a drop to income from taxes, following a 13 per cent contraction in the economy during the first half of the year. In order to remedy the situation, the government has announced a modification in economic targets, to meet requirements set by the International Monetary Fund (IMF). The IMF, plays a crucial role in Peru's financial situation, because major international lending institutions have made their credit conditional on compliance with its targets. According to economic experts, the government must meet the targets in order to draw more than 60 million dollars from the 200 million from commercial banks, and the same amount from the World Bank before the end of the year.