Introduction The geographical location of Peru is the South American continent. The country borders the South Pacific Ocean, the Republic of Chile and Ecuador. Peru has a population of approximately 20 million. According to the World Bank, about 12 million citizens are poor, while about three million people live in absolute poverty (The World Factbook, para 1). Despite this economic status, the country has been rated among the fastest growing economies globally. The economy of Peru has been influenced by some policies introduced by the government. These policies aimed at stabilizing the country’s economy. In this case, stringent rules were established to enhance the financial capacity of the Peruvian economy. There has been a positive growth in the Peruvian economy. Indeed, the economy has registered an average of over 6% for over a decade now (The World Factbook, para. 1). Peru’s economy depends on minerals and metal export, which are the main source of foreign exchange (Morales, 15). Therefore, the economy is subject to fluctuations when global prices change. Like most of the developing countries that rely on agriculture, Peru is affected by fluctuations in agricultural prices (Paredes & Sachs, 19). Peru’s Annual Growth rate: Statistics              2005  2006  2007  2008 Gross National Product  6.8   7.7   8.9   9.8  Gross domestic product  5.6   6.5   7.6   8.6  Investment and saving   17.9  20.0  22.9  26.6 Balance of payment      1148  2854  1220  4180  Source: The World Factbook Key problems facing the economy of Peru Peru faces economic problems like many other developing countries. These problems include high poverty levels among most of the citizens in the country, political instability, relying mostly on agriculture, and political problems. The poverty level may be attributed to poor education, few skills, and technology (Paredes & Sachs, 26). These aspects make the country lag behind in terms of economic development. Even though the government has established education institutions, not all citizens have the financial capacity to pay for the services. In addition, some citizens cannot access quality health services. This has caused the mortality rate to increase because the poor people cannot access health care services. Poor health among citizens can be solved by initiating a better policy formulation. The government should invest in a better infrastructure within the rural areas to improve on social amenities. Political steadiness is critical for development in the economy. Therefore, the country should ensure that there is political stability that facilitate economic development (Aswathappa, 19). The government can provide cheap and affordable education for the citizens. This will assist citizens to gain skills to carry out development activities within their locality (The World Factbook, para. 1). The other problem facing Peru is the lack of proper and modern transportation facilities. The government has failed to implement reliable infrastructure in rural areas. This has been witnessed through poor road network (The World Bank, para. 1). Peru’s economic policies Several policies have been adopted to protect the economy from failure. The government supports financial institutions to ensure that the economy is good. In addition, the government has so