The graphs show that there is more variation across

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Unformatted text preview: ers, who have used per capita GDP as one the regressors. 106 The specification is of first difference on the LOG, in order to take into account for country specific fixed effects, and also includes the Gini coefficient and a time trend. 66 data from several sources and report the mean, minimum and maximum expected growth rate for the period.107 The baseline values for poverty rates and numbers are calculated by taking the 2006 and 2007 poverty rates in SEDLAC and projecting them forward to 2008, using the estimated elasticities and the preliminary estimates of 2008 growth rates. Table 5 reports the estimated impact of the economic crisis on moderate poverty and extreme poverty, using poverty defined by national poverty lines and reported in SEDLAC.108 Using the mean consensus forecast, aggregate poverty rates for LAC are estimated to rise 1.14 points. That would result in 8.3 million more poor people than in 2008. About half of those people that will fall into poverty are in Mexico, about a fifth in Brasil, and the rest are distributed in Argentina, Colombia, Ecuador, Guatemala and Venezuela. The aggregate extreme poverty rate for LAC is estimated to rise 0.53 points to, which would generate an increase of approximately 3.6 million in the number of extreme poor. As today’s pessimistic forecast seems to be turning rapidly into tomorrow’s mean forecast, it is worth noting the estimated poverty rates and numbers associated with the pessimistic forecast. In this case, aggregate poverty rates are estimated to rise by 2.05 points generating 13.5 million additional poor people in 2009. Aggregate extreme poverty rates, under the pessimistic forecast, are estimated to increase almost one point, generating an increase of 6 million in the number of extreme poor. In the region, the final performance both of growth and poverty will depend on the magnitude of the downturn in industrialized countries and on the speed and effectiveness of anticyclical packages that most countries are already implementing. Figures 10 illustrate that the number of poor projected for LAC in 2009 is beginning to rise to the levels that prevailed back in 2006. If one compares the projected number of poor people in 2009 to a prediction based on what was expected to be 2009 GDP growth back in January 2008, the increase in the number of people would be 13 million (Table 6). As there was a more optimistic outlook for growth in 2009 when forecasts were made back in January 2008 (see figure 6), the estimated poverty impact is greater for this counterfactual. In other words, now we expect, by the end of 2009 , 13 million more poor people than what would have been observed had past growth been maintained. In the case of extreme poverty, comparing the change to what had been expected back in January 2008 yields an increase of 6.1 million more extreme poor than what had been expected. 107 The GDP growth rates used in the analysis are provided in Annex 5. The estimated poverty impacts for the individual countries are also presented in Annex 5. If a particular country only reported data for the mean, the same number was used on the minimum and maximum scenario. Moreover, a few countries (St Lucia, Haiti and Jamaica) were not covered by the LAC Consensus Forecast, in those...
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This document was uploaded on 11/14/2013.

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