'Moderate recovery' for Latin American economies in 2018: report

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Santiago (AFP)

After two years of contraction, the economies of Latin America and the Caribbean will show "moderate recovery" in 2018, fueled by global economic growth and a rise in private consumption and investment, a UN-backed research group said Thursday.

The region is set to grow 2.2 percent next year, up from 1.3 percent in 2017, when it was dragged down by Venezuela's collapsing economy, the UN-backed Economic Commission for Latin America and the Caribbean (CEPAL) said in its annual report.

The expected recovery comes after 2016 ended with a one percent contraction, pulled down by anemic economic performance by regional powerhouse Brazil.

Final figures are expected to show that Brazil this year grew 0.9 percent, and its economy is forecast to grow 2 percent in 2018.

The global economy is projected to expand at a rate of around 3 percent in 2018, the report said.

Several countries currently growing at moderate rates "will see their economic activity accelerate," most notably Chile from 1.5 percent this year to 2.8 percent; Colombia, from 1.8 percent to 2.6 percent; and Peru, from 2.5 percent to 3.5 percent.

Panama is expected to see the highest regional growth rate next year -- 5.5 percent -- followed by the Dominican Republic and Nicaragua.

"Private consumption continues to be the motor of domestic demand but in 2018 investment will make a greater contribution," the report said.