Latin America, Caribbean to grow by 0.7 percent in 2016: UN report

Latin America and the Caribbean will see economic growth of just 0.7 percent in 2016, due to weak trade and the fall in raw material prices, according to a new UN report released Monday.

However, the UN report titled "World Economic Situation and Prospects 2016" does show that 2016 will be better for the region than last year, when it contracted by 0.5 percent, said Eduardo Loria, coordinator of the National Autonomous University of Mexico's (UNAM) Economic Forecasting Center, at the launch of the report.

"The region is facing very difficult conditions, such as low prices for raw materials, the strengthening of the U.S. dollars, and the deceleration of China," said Loria.

Additionally, of the three sub-regions of Central America, South America and the Caribbean, South America would be the worst hit, with anemic growth of 0.1 percent expected.

In comparison, Mexico and Central America will grow by a combined 2.9 percent, due to higher domestic demand as well as the fact that it is not so badly affected by the fall in raw material prices, stated the report.

The Caribbean will show the strongest growth in 2016, set to reach 2.6 percent, in large part due to a rise in tourism.

Ramon Padilla, head of the economic affairs unit for the Economic Commission for Latin America and the Caribbean (ECLAC), emphasized that the contraction felt in the region in 2015 had not been seen since the global crisis of 2009.

"This contraction was mainly anchored by the fall of Brazil and Venezuela, which are two important economies in the region," he said.

Padilla also warned that 2016 would be a complicated year due to global financial unrest and the continuing drop of raw materials, such as oil. Endit