SANTIAGO - Latin America's economies, hit by falling investment, will grow just 1.1 percent in 2014 -- their lowest level in five years, a UN commission on the region said Tuesday.
The skyline of Paulista Avenue financial center in Sao Paulo, Brazil, the country where ECLAC forecast 1.3 percent growth
The poor performance of several of Latin America's biggest economies dragged down growth across the region, found the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).
Argentina's economy will contract by 0.2 percent this year and Venezuela's by 3.0 percent, it said. Regional giant Brazil's will grow just 0.2 percent.
The figures are the latest confirmation of the end of Latin America's so-called "golden decade" of commodities-fueled growth.
The International Monetary Fund had made a similar diagnosis in October, forecasting regional economic growth of 1.3 percent for 2014, the lowest in five years, and 2.2 percent in 2015.
Regional growth is expected to bounce back slightly in 2015, to 2.2 percent, ECLAC said.
It said the sluggish growth came amid a slow and uneven recovery from the global economic crisis, falling commodities prices, increasing financial uncertainty and "scarce dynamism" in Latin America's external demand.
Last year the region's economies grew 2.7 percent.
Growth this year is set to come in at the lowest level since 2009, when the region's economies contracted 1.3 percent at the height of the global economic crisis.
"To invigorate economic growth and stop deceleration in the global economy’s current context entails significant challenges for the region," said the commission's executive secretary, Alicia Barcena, at a press conference in the Chilean capital Santiago.
"Among these, it is necessary to revive domestic demand prioritizing the dynamic of investment. This should impact positively on the economies' productivity and competitiveness."
ECLAC said one of the keys to reigniting growth was to expand counter-cyclical macroeconomic policy in ways that would protect financing for investment, especially for infrastructure projects, even in gloomy economic weather.
Investment in Latin America has been slowing since 2011 and is on track to fall 3.5 percent this year, the commission found.
It also recommended increasing the integration of the region's economies as a way to boost productivity and demand and strengthen capacity to deal with external shocks.
- Weak EU, Chinese demand -
Across the region, the picture was largely uneven, ECLAC found.
Central America, Haiti and the Spanish-speaking Caribbean were on track to grow 3.7 percent in 2014, but South America would post just 0.7 percent growth, it said.
For 2015, it forecast growth of 4.1 percent in Central America, Haiti and the Spanish-speaking Caribbean, 1.8 percent in South America and 2.2 percent in the English-speaking Caribbean.
The fastest-growing economies next year will be Panama with 7.0 percent growth, Bolivia with 5.5 percent growth, and the Dominican Republic and Nicaragua with 5.0-percent growth, it predicted.
In Brazil, the world's seventh-largest economy, it forecast 1.3 percent growth.
The region's larger economies will mostly do better next year, it found, predicting growth of 3.2 percent in Mexico, 3.0 percent in Chile and 4.3 percent in Colombia.
Much of Latin America was hit by falling exports this year.
While countries such as Mexico and the Dominican Republic benefited from the recovery of the nearby US economy, South America faced sluggish demand and low prices for its commodities in key trade partners China and the European Union.