The United Nations' Economic Commission for Latin America and the Caribbean, or ECLAC, on Dec. 20 cut its average economic growth projection for 2019 in the region to 1.7% from its previous October forecast of 1.8%.
The commission also lowered its economic growth projection for 2018 to 1.2% from 1.3% previously.
ECLAC said an "abrupt deterioration in the financial conditions for emerging economies" continued to be the greatest risk to the region's economic performance, after 2018 saw a "significant reduction in external financing flows, while at the same time sovereign risk levels increased and their currencies depreciated against the dollar."
In 2019, ECLAC forecasts regional giants Brazil and Mexico to grow 2.0% and 2.1%, respectively. Overall, it expects growth in Central America at 3.3% in the coming year, while it sees South America at 1.4% growth and the Caribbean at 2.1% growth.
The Dominican Republic and Panama will grow 5.7% and 5.6%, respectively, in 2019, according to the organization, while Venezuela's economy will sink by 10%. Nicaragua will fall 2.0%, by the 2019 estimates and Argentina's GDP will decrease 1.8%.
"[The] countries of Latin America and the Caribbean will confront a complex global economic scenario in the coming years, in which less dynamic growth is expected, both for developed countries as well as emerging economies, along with increased volatility of international financial markets," ECLAC said.
In the light of these estimates, ECLAC Executive Secretary Alicia Bárcena urged Latin American countries to employ public policies to spur growth and cope with global uncertainty.
"The active role of fiscal policy in the region in terms of revenue and spending must be bolstered. In this sense, it is essential to reduce tax avoidance and evasion and illicit financial flows. At the same time, direct taxes and also health-related and green taxes must be strengthened," Bárcena said in a statement.