UN panel: Latin America facing recession in 2015

Latin America's economies will contract by 0.3 percent this year as a weak global economy, falling commodity prices and China's slowdown continue hammering emerging markets, a UN panel forecast Monday.

The slowdown will hit hardest in ailing regional powerhouse Brazil, which is facing a contraction of 2.8 percent, and in crisis-hit oil giant Venezuela, which is on track for a 6.7-percent contraction, predicted the Economic Commission for Latin America and the Caribbean (ECLAC).

The commission revised down its 2015 regional outlook from a July forecast of 0.5-percent growth, which was already on track to be the region's slowest economic expansion in six years.

It forecast a return to growth of 0.7 percent in 2016.

A strong US dollar and weak internal demand are also hurting Latin America's economies, ECLAC said, urging policy makers to seek to kick-start investment.

"Energizing investment is a fundamental task to change the current deceleration phase as well as to achieve a path of sustained and sustainable growth in the long term," it said in a statement.

The slowdown will be worst in South America, whose economies rely heavily on commodities, especially exports to China, ECLAC said.

South America will contract about 1.3 percent in 2015 and 0.1 in 2016, it predicted.

Mexico and Central America, which benefit from closer ties to a rebounding United States, will grow 2.6 percent in 2015 and 2.9 percent in 2016. Caribbean economies will grow around 1.6 percent this year and 1.8 percent next year, it forecast.

The figures are the latest confirmation of the end of Latin America's so-called "golden decade" of commodities-fueled growth.

A contraction of 0.3 percent in 2015 would be the region's worst year since 2009, when Latin American economies contracted 1.3 percent at the height of the global economic crisis.

The bad news comes as Latin America is in the spotlight this week as the International Monetary Fund and World Bank hold their annual meetings in the Peruvian capital Lima.