REUTERS: A United Nations body has cut its modest economic growth projection for Latin America in 2016 and is now forecasting an average contraction in regional gross domestic product of 0.6 percent.
The Santiago-based Economic Commission for Latin American and the Caribbean, citing low commodities prices and financial market volatility, cut its prior call for 0.2 percent average economic growth in a statement late on Friday. Last year’s trend of a diverging path between the relatively stronger performance of Mexico and Central America, with their closer U.S. ties, and the commodities-based economies of South America would continue, the U.N. commission said.
“The economies of South America, focused on the production of primary materials, especially oil and minerals, and with growing trade integration with China, will register a contraction of 1.9 percent (in 2016),” it said. Brazil, Latin America’s largest economy, will likely contract 3.5 percent this year, the commission said, far more than the 2.0 percent contraction it forecast