by Alejandra del Palacio

    MEXICO CITY, Dec. 10 (Xinhua) -- The Economic Commission for Latin America and the Caribbean (ECLAC) said Thursday that the economy of the region will contract 1.8 percent in 2009, due to the global economic crisis.

    According to ECLAC Executive Secretary Alicia Barcena, "the worst of the crisis has been left behind. The engines of the growth are being turned on again, but we do not know how long the fuel will last."

    During the presentation of ECLAC "Preliminary Balance of Latin America and Caribbean Economies 2009," Barcena said that the recovery of the economies in the region will be faster than was projected months ago.

    According to the report, in 2010 most of the countries will have positive growth rates. However, there are still doubts about whether the recovery will be sustained, because the external scenery could affect the growth expectation in the region.     

    SOUTH AMERICA RECOVERING

    The report said that in 2010, the economic growth in South America could be 4.7 percent. Brazil leads the list of countries, which will grow in 2010, with an estimated expansion of 5.5 percent.

    Following Brazil are Peru and Uruguay with 5 percent each, then come Bolivia, Chile and Panama with 4.5 percent, while Argentina and Suriname will have a growth of 4 percent in 2010.

    In Peru, the world financial crisis caused the Peruvian economy to grow only 0.8 percent in 2009, compared with the 9.8 percent it registered in 2008. But by 2010, its economy is expected to grow between 4.5 and 5 percent.

    In Uruguay, the economy will grow 1 percent at the end of 2009,mainlyboosted by private and government consumption, as well as by public investment. Its growth rate in 2010 is estimated to be 4.5 percent.

    The report estimated that Argentina would witness a growth of 0.7 percent in 2009 after six years of intensive expansion. In 2010, it is expected to grow 4 percent.

    In Nicaragua, the economy will contract 1.5 percent in 2009, interrupting 15 consecutive years of growth. For 2010, it is expected to grow 2 percent, boosted by external demand.

    Colombia's economy will contract 0.3 percent in 2009, and by 2010 it will have a growth of 2.5 percent, fueled mainly by private consumption.

    In Ecuador, the economy will contract 0.4 percent this year, mostly due to the reduction of oil prices. But for 2010, ECLAC predicted a growth of 3 percent for this country.

    This year, Chile also saw a reduction of 1.8 percent; however, ECLAC said that next year, its economy will grow 4.5 percent.

    In Venezuela, the economy's reduction this year was 2.3 percent, mainly because of lowered oil prices, compared with 4.8 percent in2008.     

    CENTRAL AMERICAN GROWTH

    According to ECLAC, Central America will have an average growth of 3percent in 2010, with Mexico and Costa Rica being the countries with the highest growth rates of 3.5 percent each.

    Panama had a growth of 2.5 percent, and it is expected to have a growth of 4.5 percent in 2010.

    According to ECLAC, the Mexican economy had the sharpest contraction in the region in 2009, namely 6.7 percent, while it will grow 3.5 percent.

    Honduras in 2009 will face a contraction of 3 percent due to the international financial crisis and its political internal crisis.

    El Salvador's economy also contracted 2.5 percent this year, but in 2010 it is expected to grow 2 percent.

    Costa Rica had a contraction of 1.2 percent this year, mainly due to the global crisis; however by 2010, it is expected to have a growth of3.5 percent.

    Guatemala will also face a contraction of 1 percent in 2009, compared with its growth of 4 percent in 2008, mostly due to the economic recession in the United States. For 2010, its economy is estimated to grow 2 percent.     

    THE CARIBBEAN RECOVERS

    Despite the economic recession in the United States, the Dominican Republic grew 2.5 percent this year, and by 2010, its growth is expected to be 3.5 percent.

    Haiti, the poorest country in Latin America, had an economic growth of 2percent this year, due to a good performance of its agricultural, manufacture industry and electricity generation sectors. By 2010 it is also expected to register a growth of 2 percent.

    Cuba had a growth of 1 percent, less than the 4.1 percent in 2008, mainly due to the three hurricanes that whipped the island this year and produced a loss of 20 percent of its gross domestic product.

    The ECLAC said these estimations are from a group of counter cyclic policies. The policies include cutting interest rates, increasing credit participation of the state banks, increasing public expense, and promoting social programs related to subsidies on consumption and initiatives to aid the poorest families.

Special Report:  Global Financial Crisis