Bridging the gap: Peru’s path towards achieving the SDGs

Abstract

This paper analyzes the potential impact of policy interventions on the achievement of the Sustainable Development Goals (SDGs) in Peru. A macro-micro modeling approach, linking a dynamic recursive Computable General Equilibrium (CGE) model, an econometric micro-simulation model and a human capital model, is used to assess the effects of increased public investment in infrastructure, education, and health, along with improvements in public sector efficiency. The results show that maintaining past public spending trends would lead to limited progress in achieving several SDGs. However, strategically increasing public investment can significantly improve educational outcomes, reduce poverty, and enhance economic growth and productivity. The study also highlights the importance of public sector efficiency and external financing to maximize the impact of SDG-focused investments.