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Lost Decade Specter Haunts Latin America as Big Economies Falter

  • Brazil, Mexico and Argentina all contracting in first quarter
  • Latin America has lagged EM average growth for two decades
A mother and child enter a makeshift home in Rio de Janeiro.
A mother and child enter a makeshift home in Rio de Janeiro.Photographer: Lianne Milton/Bloomberg

Latin America is on the verge of suffering another lost decade.

The region, still struggling to cope with the end of the commodities boom, has expanded only 0.7% a year on average during the past few years. That’s hardly enough to keep up with population growth, meaning that people are poorer today than they were in 2012, according to the International Monetary Fund. Now its biggest economies -- Brazil, Mexico and Argentina -- have contracted simultaneously for the second time in just over three years, causing yet another headache for policy makers.