SANTIAGO, Chile – The economy of Latin America and the Caribbean will grow just 0.5 percent this year, half the previous forecast and the lowest level in six years, the United Nations said Wednesday.
This is due mainly to major economic contractions expected in Brazil and Venezuela, said the Economic Commission for Latin America and the Caribbean, a U.N. agency based in Chile.
Those declines are forecast at 1.5 percent and 5.5 percent, 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 percent decline in 2009.
An external factor fueling 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 U.N. agency said the regional deceleration will have the greatest impact on the countries of South America, which will suffer a contraction of 0.4 percent.
Central America and Mexico will grow 2.8 percent and the Caribbean will see its output rise by 1.7 percent.