The Economic Commission for Latin America and the Caribbean (ECLAC) has lowered its economic growth forecast for the region to 2.2 percent, the UN agency said Monday.
In a press release posted on its website, the agency said its revised projection for Latin American and Caribbean economies is averaged 2.2 percent in growth in 2014.
Regional countries will be "affected by the weakness in external demand, less dynamic domestic demand, insufficient investment, and limited room for implementing policies to spur an upturn, the organization said.
The release accompanied the agency's presentation of its periodic "Economic Survey of Latin America and the Caribbean 2014, " which cut the previous 2.7 percent growth forecast issued in April.
According to the study, the region will register lower growth than last year's 2.5 percent, because "the economic slowdown observed in the last quarter of 2013 persisted during the first months of 2014."
Regionally, Panama will see the biggest growth in 2014, with a 6.7 percent increase in its gross domestic product (GDP), followed by Bolivia (5.5 percent), and Colombia, Ecuador and Nicaragua (5 percent).
South America as a whole will expand 1.8 percent, "although with great diversity among countries," said ECLAC, adding the cuts in estimated growth were due to different factors, depending on the country being analyzed.
The good news, said ECLAC, is that "a gradual improvement in some of the world's major economies should enable the trend to change towards the end of 2014."
ECLAC said "the resumption of economic growth in the United States will benefit Mexico and Central American countries, while the recovery of the United Kingdom and several economies in the euro zone will have a positive impact, especially in the Caribbean, due to the arrival of more tourists."
The agency warned, however, that "the main risk (to the region) is the lower growth forecast for China in 2014."
Regional economies heavily dependent on exporting commodities to China "could be affected if the Asian giant cannot maintain its growth above 7 percent," said ECLAC. The report urges countries to "foster greater public and private investment in infrastructure and innovation, and to boost the diversification of production" to improve growth.