Despite progress in some areas, poverty remains a significant issue in Peru, with 27.5% of the population living below the poverty line as of 2022. The challenges have been further compounded by the COVID-19 pandemic, which has disproportionately impacted the most vulnerable, including indigenous communities and people living in rural areas. The World Bank (2023) estimates that approximately 7 out of 10 Peruvians are either poor or vulnerable.

Recent climate-related events have highlighted the significant vulnerability and limited coping capacity of vulnerable populations in Peru. By prioritizing resilience-building efforts, Peru can address multiple challenges simultaneously - helping the poor and vulnerable while also positively impacting other priority areas, such as Industry, Innovation, infrastructure (SDG 9) and productivity through education and overall economic growth (SDGs 4 and 8).

SDG 3 is a key priority in both Peru's 2021 National Agreement (Acuerdo Nacional) and national planning documents. Advancing towards SDG target 3.8, which focuses on achieving universal access to healthcare, has become increasingly crucial in the wake of the COVID-19. The pandemic emphasized the critical importance of health care access as a key driver for development, setting the foundations for implementing other SDGs, such as SDG 1, SDG 8 or SDG 10.

Investing in universal health care and ensuring access to quality and affordable health services can have far-reaching benefits. These include improved educational outcomes, higher productivity levels, reduced poverty and reduction of inequalities - all essential areas where Peru must make progress to reach the 2030 development agenda.

As one of the LAC countries with the highest level of labour informality (above 78% according to the latest data), promoting decent work and productivity could have a positive impact on several areas of development for Peru, and play a key role in advancing many SDGs.

Through investments in initiatives to propel SDG 8.5, Peru can simultaneously address employment challenges, while also making progress towards closing gaps related to poverty, health, well-being and inequality target indicators - all development priority areas for the government.

Efforts to promote formal sectors of the economy could also increase the tax base while expanding coverage of social protection systems. Policies and reforms need to consider the behavioural aspects and incentives that workers and SMEs face when making decisions between the formal and informal sectors.

Promoting inclusive and sustainable industrialization (SDG 9.2) is of significant importance for Peru, as it can increase the industry's contribution to employment and GDP, while also potentially reducing poverty (SDG 1.1 and 1.2). Similarly, supporting industries can positively benefit agricultural production, although it is important to acknowledge the possibility of a labour shortage in the sector as other industries develop.

Conversely, new industries have the potential to absorb workers, a critical aspect of structural transformation required for effecting a positive impact on society as a whole. To ensure inclusivity, efforts should be focused on sectors that provide employment and training opportunities for impoverished communities thereby ensuring that no one is left behind

Advancing industrialization and innovation is a key priority for the Government of Peru, as reflected in the National Policy for Industrial Development. Strategic infrastructure investments are planned to enhance value-chain efficiencies and leverage economies-of-scale across several sectors.

Progress towards indicator 9.4 could also have positive impacts on Clean Water and Sanitation (SDG 6) and Decent Work and Economic Growth (SDG 8). However, it is crucial to consider that investing in these areas may hinder advancements towards gender equality and the overall reduction of inequalities. These investments must take into account potential distributional effects across different segments of the population.

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Focusing on SDG 16 (peace, justice, and strong institutions), especially Target 16.6, can have a multiplier effect on various SDGs and targets in Peru, spanning key areas like decent work and economic growth.

To effectively reduce informality and ensure access to public services for vulnerable populations, investments in institutions should be accompanied by improved implementation capacity and citizens’ engagement. Strengthening institutional capacity can also contribute to achieving targets related to zero hunger (2.2), affordable and clean energy (7.1 and 7.2) and inclusive and sustainable industrialization (9.2).

Furthermore, enhancing Peru's institutional efficiency will improve expenditure quality, thereby positively impacting productivity rates. Currently, there are over 2,300 paralyzed public works projects worth approximately US$11.3 billion, with an estimated US$7 billion in pending investments.

It is important to highlight that additional investments and initiatives need to be supported by comprehensive data collection. The absence of several target indicators in Peru hinders the effectiveness of the policy cycle.