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Latin American, Caribbean economies forecast to shrink in 2015

Xinhua, October 6, 2015 Adjust font size:

The Economic Commission for Latin America and the Caribbean (ECLAC) has predicted a 0.3-percent decrease in the region's economic activity in 2015.

It has also estimated that the region's growth in 2016 will be close to 0.7 percent, according to an article published on ECLAC's official website on Monday.

"A weak internal demand, a global environment marked by a low growth of the developed world, an important deceleration in emerging economies, the strengthening of the dollar, a growing volatility in financial markets and an important fall in primary goods prices" are the main reasons behind the drop in growth, according to the United Nations regional commission's report.

South American oil and mineral producers will take the worst hit, according to the article.

However, economies with more connections to the U.S. economy will likely maintain their rhythm of growth. For example, Mexico and Central America as a whole could grow by 2.6 percent in 2015 and 2.9 percent in 2016 while the Caribbean economies could grow by around 1.6 percent in 2015 and 1.8 percent in 2016.

To combat the deceleration in the regional economic activity, it is important to prevent the investment rate from dropping, said ECLAC.

"Energizing investments is a fundamental task to change the current deceleration phase," said the article. Endi