Peru is classified as upper middle income by the World Bank and is the 39th largest in the world by total GDP. Peru is one of the world's fastest-growing economies with a 2012 GDP growth rate of 6.3%. It currently has a high human development index of 0.741 and per capita GDP above $12,000 by PPP.Neo-classical economists would interpret Peru's sound economic performance as a combination of: Macroeconomic stability Prudent fiscal spending High international reserve accumulation External debt reduction Achievement of investment grade status Fiscal surplusesHowever, Post-Keynesian economists would argue that what neo-classical economics considers to be prudent fiscal spending is nothing more than a means to restrict government spending in order to make Peru dependent on export income and thus encourage it to open the Peruvian economy to free trade to the benefit of other western countries. Though growth has been significant, income inequality remains, and much of Peru's rain-forests have been damaged in the mining of gold and silver. All of these factors have enabled Peru to make great strides in development, with improvement in government finances, poverty reduction and progress in social sectors. Poverty has decreased dramatically in the past decade, from nearly 60% in 2004 to 25.8% in 2012.Peru is an emerging, social market economy characterized by a high level of foreign trade. The inequality of opportunities has declined: between 1991 and 2012 Peru's rating on The World Bank's Human Opportunity Index improved substantially as increased public investment in water, sanitation and electric power has sustained the downward trend in inequality of opportunities. Its economy is diversified, although commodity exports still make up a significant proportion of economic activity and thus subject the economy to the risks of price volatility in the international markets. Trade and industry are centralized in Lima but agricultural exports have led to development in all the regions. Peruvian economic performance has been tied to exports, which provide hard currency to finance imports and external debt payments. Peru's main exports are copper, gold, zinc, textiles, chemicals, pharmaceuticals, manufactures, machinery, services and fish meal; its major trade partners are the United States, China, Brazil, European Union and Chile. Although exports have provided substantial revenue, self-sustained growth and a more egalitarian distribution of income have proven elusive.Services account for 43% of Peruvian gross domestic product, followed by manufacturing , extractive industries , and taxes . Recent economic growth has been fueled by macroeconomic stability, improved terms of trade, and rising investment and consumption. China has become Peru's largest trading partner following a free trade agreement with the People´s Republic of China signed on April 28, 2009 additional free trade agreements have being signed with the United States of America free trade agreement with the United States signed on April 12, 2006, the European Union June 26, 2012.The EU and Peru Sign Trade Promotion Agreement, with Japan free trade agreement with the constitutional monarchy of Japan signed on May 31, 2011Inflation in 2012 was the lowest in Latin America at only 1.8%, but increased in 2013 as oil and commodity prices rose; as of 2014 it stands at 2.5%. The unemployment rate has fallen steadily in recent years, and as of 2012 stands at 3.6%.
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