Latin America's GDP is expected to grow 2.3% in 2018 and advance 2.7% in 2019, according to the latest LatinFocus Consensus Forecast of research company FocusEconomics.

The 2018 forecast is 0.1 percentage point lower from the previous estimate, with FocusEconomics citing politics as the biggest risk to growth. The moderating outlook was also driven by downgrades to Peru and Venezuela's forecasts.

Bolivia and Paraguay are expected to be the region's top performers this year, with economic growth of 3.8%. On the other hand, Venezuela is seen contracting 6.7% as the country "is in an economic meltdown due to a shortage of dollars, hyperinflation and low oil production," the Feb. 13 forecast report said.

FocusEconomics expects the region to have posted annual GDP growth of 2.3% in the fourth quarter of 2017, which would be the strongest growth rate since the first quarter of 2014. Economic prospects in the region have improved due to higher confidence, accommodative financial conditions, rising prices for commodities and solid global demand, the research firm said.

In Brazil, stronger activity was due to a slower inflation, a lower unemployment rate, and a two-year high in industrial production. As for Mexico, robust overseas demand and healthy services boosted growth, but high inflation, tighter monetary conditions and fiscal activities offset some of the gains.

FocusEconomics noted that policymakers should address structural issues and macroeconomic imbalances in their economies in order to accelerate the still-moderate growth in the region.