World Economic outlook - Latin America and Caribbean economic growth forecast 2012-2013 : The economy of Latin America and the Caribbean will likely expand by 3.2 percent this year and pick up the pace to grow 4.0 percent in 2013, the United Nations economic body for Latin America said on Tuesday.
The Economic Commission for Latin America and the Caribbean's (ECLAC) previous official estimate in June showed the region growing 3.7 percent this year, although the UN body's head Alicia Barcena told Reuters in August that Latin American and Caribbean economies would likely grow between 3.2 percent and 3.3 percent.
"Weakness in the global economy, caused mainly by difficulties in Europe, the United States and China, has affected growth in Latin America and the Caribbean," ECLAC said in a statement.
Latin America is experiencing a commodities-led boom, but its largely export-dependent countries are seen vulnerable to a slowdown in global demand, especially from key trade partner China.
"The deceleration of Chinese demand has a bigger impact on exporters of natural resources, mainly in South America, but it is these countries that have the most fiscal space to respond," Barcena said at a press conference on Tuesday. "They also have macroprudential tools at their disposal that allow them to protect their currencies from appreciating."
Higher growth in giants Brazil and Argentina will boost regional growth next year, the ECLAC said.
The organization forecasts Brazil's economic expansion at a sluggish 1.6 percent this year, but speeding up to 4.0 percent in 2013 on a rebound in local consumption.
"The recovery we see in 2013 is linked to the domestic markets in Latin America, especially in the larger countries, and what might happen in the Asia Pacific region," Barcena said.
Brazil's central bank slashed its economic growth forecast for 2012 last week, but signaled that it is unlikely to keep cutting interest rates to boost output because inflation is picking up again.
In contrast, Mexican growth is seen remaining stable at 4.0 percent both this year and next.
Latin America's No. 3 economy Argentina, is expected to grow just 2.0 percent this year - below the rate that would trigger a roughly $4 billion payment to creditors holding the country's growth-linked GDP warrants.
Argentina's economy is seen picking up speed next year, to 3.5 percent growth, boosted by neighboring Brazil's expected economic rebound, a recovery in the agricultural sector, in particular the production of soy, and easing restrictions on imports, Barcena said.
Argentina, the world's top exporter of soymeal - used as animal feed, and soyoil, used for cooking and biodiesel production - saw production of the crop fall due to drought.
Colombia is seen growing 4.5 percent both this year and next.
Chile, the world's No. 1 copper producer, is forecast to expand 5 percent this year but slow to grow 4.8 percent next year - identical to the forecasts the government also unveiled on Tuesday.
Peru is seen growing at the quickest pace among major Latin American economies with a 5.9 percent expansion this year and 5.5 percent in 2013.