Recession-hit Latin America to grow 1.5% in 2017: UN

Latin America faces a larger-than-expected recession this year but will return to growth of 1.5 percent in 2017 thanks to higher prices for its commodity exports, a UN panel forecast Wednesday.

Hit by deep recessions in heavyweights Brazil, Argentina and Venezuela, Latin America's economies will shrink 0.9 percent this year, said the Economic Commission for Latin America and the Caribbean (ECLAC), revising downward its forecast by 0.1 percentage point from its last report in July.

But the region is on track to return to growth of 1.5 percent in 2017 thanks to better prices for the raw materials that drive its economies and recoveries in its key trading partners, it said.

Latin America's economies already contracted 0.5 percent last year, a painful downturn for a region that was home to some of the world's best-performing economies during the emerging markets boom of the 2000s.

But it is not all bad news across the region.

While South America's economies are facing a 2.2-percent contraction this year, Central America is on track to grow 3.7 percent and Mexico 2.1 percent, ECLAC forecast.

It is predicting a return to growth next year of 0.5 percent in Brazil and 2.5 percent in Argentina.

Both countries are now in the hands of business-friendly center-right governments, after turbulent transitions from more than a decade of left-wing rule that ended as the region's boom turned to bust.