Latin America's Economies May Grow 5.2% This Year, Led by Brazil, UN Says

Latin America’s economies may expand 5.2 percent this year, led by 7.6 percent growth in Brazil, the United Nations’ economic unit for the region said.

The regional economy may expand 3.9 percent in 2011, the Santiago-based Economic Commission for Latin America and the Caribbean, known as Cepal for its initials in Spanish, said today. Economic output shrank 1.9 percent in 2009, it said.

Latin America will be one of the fastest-growing regions in the world this year, along with emerging markets in Asia, as programs to fight last year’s economic slowdown supplement supportive external factors such as Asian demand for the region’s metal and grain exports and easier access to credit, the commission said. The favorable backdrop may be short-lived and is unlikely to continue into next year, the unit said.

“Growth is higher than was previously forecast,” Cepal Executive Secretary Alicia Barcena said in an e-mailed statement. “But performance is very uneven within the region.”

Venezuela’s economy may shrink for a second consecutive year, contracting 3 percent, while Haiti’s shrinks 8.5 percent following January’s devastating earthquake, the commission said. Venezuela is the only country where inflation is a cause for concern, Barcena said.

Central America and the Caribbean won’t benefit from the commodities boom as they are net importers of food, fuel, metals and minerals. While Central America may benefit from increased remittances from the U.S., the 0.9 percent growth forecast this year in the Caribbean will fail to reverse last year’s 2.3 percent decline.

Chile’s economy may expand 4.3 percent in 2010 and 6 percent in 2011, making it the fastest-growing major economy in the region next year, when Brazilian economic growth will slow to 4.5 percent, the report said.

To contact the reporters on this story: Randall Woods in Santiago at rwoods13@bloomberg.net or Sebastian Boyd in Santiago at =4013 or sboyd9@bloomberg.net

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