MEXICO CITY – The World Bank expects economies in Latin America and the Caribbean to stagnate in 2016, after shrinking an average 0.9 percent in 2015 marking the worst overall performance of any emerging region, Xinhua reports. In its latest Global Economic Prospects released earlier this week, the bank said it does not see the region recovering economic growth until 2017, with most Latin American nations experiencing negative growth this year.
The region should beware of “financial volatility,” the slowing down of its large trade partners, continued low prices for raw materials and potential disasters sparked by the El Nino weather phenomenon, the bank warned. Economic performance will differ among countries in the region, “with stronger growth in developing Central and North America and the Caribbean offsetting weakness in South America,” the bank said.
“The current recession in Brazil is expected to extend into 2016 but a return to growth is expected in 2017,” the report said. In Mexico “growth is expected to pick up … thanks to dividends from implementation of structural reforms and strengthening demand from the U.S.market,” it added. The agency also noted the “political uncertainty” affecting both Brazil and Venezuela, which are struggling with poor economies and political upheaval.
In general, economic growth around the globe is expected to be weak in 2016,with risks to the global economy caused by regional conflicts and the interest rate hike initiated recently by the U.S. Federal Reserve. The United States is expected to grow 2.7 percent, and the eurozone countries,1.7 percent, according to the bank.