The economy of Latin America and the Caribbean will expand by just 1.2 percent this year, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), which sees the region growing a modest 1.7 percent in 2019.
A weak external context poses significant risk for the region going forward, the Santiago-based organization said Thursday in its final report of the year.
Although global growth is projected to come in at 3.2 percent, similar to last year's figure, ECLAC expressed concern about world trade expansion that fell from 4.6 percent in 2017 to roughly 3.9 percent in 2018.
"Public policies are needed to strengthen sources of growth and cope with the scenario of uncertainty at a global level," ECLAC Executive-Secretary Alicia Barcena said during the presentation of the report.
According to that UN commission, 2019 is likely to be a year in which global economic uncertainties will "intensify and arise from different fronts."
Both developed and developing economies are forecast to suffer a slowdown in growth, while global financial markets are projected to experience increased volatility.
Trade tensions between the United States and China, meanwhile, are further aggravating a structural weakness in global trade.
But ECLAC said the biggest risk to the Latin American and Caribbean region remains "an abrupt deterioration in the financial conditions for emerging economies."
"During 2018, emerging markets, including Latin America, showed a significant reduction in external financing flows, while at the same time sovereign risk levels increased and their currencies depreciated against the dollar."
"New episodes of deterioration in future financial conditions cannot be discounted," ECLAC said, adding that "the consequences for countries will depend on how exposed they are in terms of their external financing needs and profiles."
The region's best performing countries in 2018 were the Dominican Republic (6.3 percent growth), Antigua and Barbuda (5.3 percent), Grenada (5.2 percent), Bolivia (4.4 percent), Panama (4.2 percent), Paraguay (4.2 percent) and Chile (3.9 percent).
The worst performers were Venezuela, whose gross domestic product (GDP) declined by 15 percent, Dominica (-4.4 percent), Nicaragua (-4.1 percent) and Argentina (-2.6 percent).
In 2019, ECLAC expects Dominica to continue to rebound from the devastation of Hurricane Maria and grow by a region-high 9 percent and for the economies of the Dominican Republic and Panama to expand by 5.7 percent and 5.6 percent, respectively.
Venezuela, which has been racked by a severe economic crisis for years, is forecast to contract by a region-worst 10 percent next year, while Nicaragua (-2 percent) and Argentina (-1.8 percent) also are expected to remain in recession.