The main topic should be the economical volatility in Peru during the first presidency of Alan Garcia as well as the effect of terrorism during this same time period. Despite his initial popularity among Peruvian voters, García''s term in office was marked by bouts of hyperinflation, which reached 7,649% in 1990 and had a cumulative total of 2,200,200% over the five years, thereby profoundly destabilizing the Peruvian economy. Owing to such chronic inflation, the Peruvian currency, the sol, was replaced by the Inti in mid-1985, which itself was replaced by the nuevo sol ("new sun") in July 1991, at which time the new sol had a cumulative value of one billion (1,000,000,000) old soles. During García''s administration, the per capita annual income of Peruvians fell to $720 (below the level of 1960) and Peru''s GDP dropped 20%. By the end of his term, national reserves were a negative $900 million. During the first presidency of Alan Garcia terrorism played a major factor on the worsening Peruvian economy. The economic turbulence exacerbated social tensions in Peru and contributed in part to the rise of the violent rebel movement Shining Path, which launched the internal conflict in Peru and began attacking electric towers, causing a number of blackouts in Lima. García''s presidency left the country with hyperinflation, isolated from the international financial community, with negative reserves of US$900 million, continuous subversive activities by the Shining Path, great increase in poverty levels and an electric train multi-million investment in Lima that was never finished. His critics claim the many poor decisions he took while in office created an environment that lead to the rise of an authoritarian leader like Alberto Fujimori. This research paper should be able to give an in depth analysis on the Peruvian economy during this time period. Evidence should be shown in the paper that scholarly resources were used to research this topic.