The economy of Latin America and the Caribbean will grow just 0.5 per cent this year, half the previous forecast and the lowest level in six years, the United Nations said today.
This is due mainly to major economic contractions expected in Brazil and Venezuela, said the Economic Commission for Latin America and the Caribbean, a UN agency based in Chile.
Those declines are forecast at 1.5 per cent and 5.5 per cent, respectively. Brazil has the region’s largest economy.
The average growth level for the countries of the region is the worst since a 1.3 per cent decline in 2009.
An external factor fuelling the stagnation in Latin America and the Caribbean is slow world economic growth in 2015, in particular in China and other emerging economies, except for India, the report said.
This global sluggishness has sapped prices for commodities, which are the engine for economic growth in Latin America and the Caribbean, the report added.
At home, a drop in investment along with slower growth in consumption are among factors reducing domestic demand.
The UN agency said the regional deceleration will have the greatest impact on the countries of South America, which will suffer a contraction of 0.4 per cent.
Central America and Mexico will grow 2.8 per cent and the Caribbean will see its output rise by 1.7 per cent.