(Corrects time period in last paragraph.)

Dec. 11 (Bloomberg) -- Latin America’s economies will expand at the slowest pace since 2002, with inflation and fiscal deficits worsening next year as the global financial crisis deepens, Credit Suisse said in an e-mailed report.

“We project substantially lower real GDP growth in Latin America in 2009, dropping from an estimated 4.5 percent in 2008 to 1.4 percent in 2009,” the report said. “Growth in 2009 should be particularly weak in Mexico at 0.6 percent in real terms, down from an estimated 1.8 percent expansion in 2008.”

Latin American economies are suffering as the global slowdown cuts prices for commodities including oil, soybeans and copper, eroding exports and tax revenue. Argentina’s tax revenue rose 18 percent in November from a year earlier, the slowest pace since April 2006. Declining oil prices have battered Venezuela’s economy, which grew 4.6 percent in the third quarter, the slowest pace in five years.

Argentina’s economy faces the biggest decline in the Credit Suisse forecast, with 2009 growth of 1.5 percent, from an expected 6.2 percent this year. Peru’s economy will expand 4.5 percent next, the most in the region, the report said. Credit Suisse raised its inflation forecast for Latin America to 7 percent from 6.8 percent for next year.

Latin American economies will face fiscal deficits of 2.1 percent next year, compared with an estimated 0.4 percent this year. Venezuela will run a fiscal deficit of 4.7 percent, the biggest in Latin America, the report said.

“The fiscal situation in Latin America is likely to deteriorate next year, but it should not reach the same levels as in the 2001-2002 period,” when it was 2.8 percent of GDP, the report said.

To contact the reporter on this story: Bill Faries in Buenos Aires at wfaries@bloomberg.net

Last Updated: December 11, 2008 12:38 EST