Table 5 reports the estimated impact of the economic

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Unformatted text preview: US$, Canada, Euro Zone, UK and Japan 4.0 GDP (% change) 2.0 0.0 -2.0 -4.0 Canada Euro zone Japan Mar 09, 2009 Feb 09, 2009 Jan 12, 2009 Dec 08, 2008 Nov 10, 2008 Oct 13, 2008 Sep 08, 2008 Aug 11, 2008 Jul 14, 2008 Jun 09, 2008 May 12, 2008 Apr 14, 2008 Mar 10, 2008 Feb 11, 2008 Jan 14, 2008 -6.0 UK Source: Consensus Forecast USA Figure 6: Trends in LAC Consensus Forecasts for 2009 GDP growth Source: Consensus Forecast 60 As of April 2009, Brazil, Mexico, Chile, Ecuador, Argentina and Venezuela are all forecasted to have negative GDP growth. Moreover, given the rates of population growth that prevail in LAC many more countries (15) are forecast to experience a negative rate of growth in per capita GDP. As with the industrialized countries, every month the forecasted growth rates in GDP have been revised downwards and there is no clear indication that the bottom has been reached. The dramatic reversal in growth rates is apparent in Figure 7 which plots the number of countries that have experienced negative growth in any given year between 1980 and 200799. The figures for 2009 are the projected number of countries that, as of March 2009, are expected to experience negative per capita GDP growth. It is apparent that after falling to unprecedented low levels between 2002 and 2007, the number of countries that are now projected to have negative growth in per capita GDP has shot up sharply in both LAC and the World. Figure 7: Number of countries with negative growth in per capita GDP 90 80 2009 Projected Number of countries 70 60 50 40 30 20 10 0 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 Year World LAC Note: Year 2009 projected Source: World Bank World Development Indicators Figure 8 provides additional detail on the size of the decline in per capita GDP for all Latin American countries over all past periods when per capita GDP growth was negative. The magnitude of the decline is represented by both the size of the bar and the darkness of the color. 100 Larger declines in per capita GDP are represented by larger bars and darker colors. For example, the shock in Argentina between 2001 and 2002 is represented by a large dark bar. Included in this figure are the 2009 projected growth rates in per capita GDP for those countries which are projected to have declines. One can observe that, as of March 2009, these projected declines have not yet reached some of the past levels. However, the contrast between the period 2003‐2008 when then were virtually no countries with negative per capita GDP growth and 2009 when virtually all countries are expected to suffer negative growth in per capita GDP is dramatic. 99 The figure includes those countries that were just starting in a given year, as well as those countries that were repeaters – ones that might have been in their second or more consecutive period of negative per capita GDP growth. 100 Using both the size of the bar and color to represent the magnitude is done to create a stronger visual impact and to...
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