Latin America economies slow in 2012

Latin America will grow at a slower pace than 2011, primarily due to weaker growth in Argentina and Brazil, a United Nations report has suggested.

The Economic Commission for Latin America and the Caribbean (ECLAC) forecast the whole area would slow to 3.2% in 2012, down from 4.3% last year.

It is also less than the 3.7% that ECLAC predicted in June.

ECLAC blamed the global economy, which has been hit by the eurozone debt crisis and slowing Chinese growth.

The report, the Economic Survey of Latin America and the Caribbean, identified private consumption as “the main driver of regional growth, thanks to the growth in labor markets, increased credit and – in some cases – remittances”.

Brazil and Argentina are forecast to grow less than their neighbors. Argentina’s economy will grow 2% and Brazil will grow 1.6%, ECLAC suggested.

That is less than predicted by Brazil’s finance ministry, which cut its growth forecast for 2012 to 2% this year, down from its previous forecast of 3%.

President Dilma Rousseff recently launched the first in a series of measures that could inject up to $50 billion into the economy over the next five years.

ECLAC said that regional growth this year would be led by Panama – at 9.5% – and Haiti, which is expected to expand by 6% this year.

Bolivia, Chile, Costa Rica, Nicaragua and Venezuela are expected to grow by about 5%. Mexico will expand by 4%.

Paraguay will be the only country to shrink, by 2%, it predicted.

ECLAC said the Caribbean sub-region would grow by 1.6%.