Peru's poverty rate increased last year for the first time since 2001, rising one percentage point to 21.7 percent, according to government data published Tuesday.
Peru had slashed its poverty rate by an average of about 4 percentage points between 2006 and 2012 on surging prices for the country's key mineral exports. But the decline slowed in recent years as the global commodities boom retreated.
A massive graft scandal and repeated clashes between the legislative and executive branches stifled investment last year and led former president Pedro Pablo Kuczynski to resign.
Also in 2017, 375,000 Peruvians joined the ranks of the poor, which state statistics agency Inei defines as an individual surviving on less than 338 soles ($105) per month.
Some 6.9 million Peruvians now live in poverty, 44 percent of whom are in rural Peru, Inei said. However, the rise in the poverty rate last year was led by a 2.3 percentage point spike in the capital Lima, home to some 10 million people.
"This is unacceptable. We have to work harder to turn this around," Peru's President Martin Vizcarra told journalists in televised comments.
Vizcarra, a former vice president, replaced Kuczynski after he resigned last month and has vowed to refocus the government's efforts on infrastructure spending to help bolster economic growth that slowed to 2.5 percent last year.
In 2017, public investments contracted 2.8 percent and private investments grew 0.3 percent, according to central bank data.