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The gdp growth forecasts are taken from the consensus

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Unformatted text preview: e fewer periods when the number of poor declined. During the eighties, a period of weak growth and high volatility, poverty rates fell slightly, but the number of poor increased. During the nineties, a period of stronger growth, the same pattern emerges, and, actually, the number of poor is substantially higher by the end of the decade. Thebig break in Latin America came in the period between 2002 and 2006. Extreme poverty fell 6 points and 36 million people moved out of extreme poverty. In turn, the poverty rate fell more than 10 points and 56 million people moved out of poverty. Projections for 2007 and 2008, show an additional decrease, of at least two additional points of further extreme poverty and moderate poverty rates reduction98. Hence, during the strong growth period 2002‐2008, almost 60 million people were lifted out of poverty, and 41 million left the ranks of extreme poverty. It should be noted that towards 2007 and 2008 there seems to be already a deceleration on the rate of poverty reduction. Table 2. Poverty and Extreme Poverty ‐ Rates and Number of Poor (1981‐2008) Extreme Poverty Number of Poverty Rate Number of Poor Year Rate Extreme Poor (PPP $4 a day) (millions) (PPP $2 a day) (millions) 1981 24.6 90.0 48.5 160.5 1984 28.1 109.5 52.6 205.0 1987 24.9 103.0 47.5 196.8 1990 21.9 95.8 44.7 196.0 1993 20.7 95.5 44.4 205.1 1996 22.0 106.8 46.1 223.6 1999 21.8 110.7 45.5 230.8 2002 21.5 114.0 45.4 240.6 2005 17.1 94.2 38.8 213.6 2006 14.6 78.0 35.2 188.0 2007* 13.6 75.1 33.3 183.6 2008* 13.1 73.3 32.5 181.3 * Projected The Rapidly Developing Worldwide Economic Crisis The increase in food and energy prices in 2007 and 2008 raised concerns that the continuation of the good times in Latin America might be threatened. The arrival of the worst worldwide economic crisis since the Great Depression to Latin America has made it clear that the threat is now a reality. The period of rapid per capita GDP growth that Latin America experienced between 2002 and the middle of 2008 has come to an end. The concern today is how long and how deep will the recession be and how severely will poverty be affected. The downturn during the last quarter of 2008 was particularly dramatic and each month seems to bring worse news than the month before. While the industrialized countries were the first to experience rapid downturns in projected growth, the projections of GDP growth for most developing countries 98 2007 and 2008 are still projections as not all large countries have data for 2007, and only a few have infromation for 2008. 59 (including those of Latin America) are now following the industrial countries downwards. Figure 5 indicates how the predictions for 2009 GDP growth in the US, Canada, the UK, the Euro Zone and Japan have declined every month since January 2008. There is no indication that the bottom has been reached. Figure 6 presents forecasts for Latin American countries which are covered by Consensus Forecasts. A similar downward trend in the forecasts is evident. Figure 5: Trends in Consensus Forecasts for 2009 GDP growth in...
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