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Latin America's economy to shrink in 2009: IMF

business Updated: Mar 26, 2009 12:56 IST

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Latin America's economy will suffer negative growth this year as the region is buffeted by the global economic downturn, a top International Monetary Fund official said on Wednesday.

The IMF's director for the Western Hemisphere Nicolas Eyzaguirre said he expects the average country in Latin America to be "in negative territory" in 2009, "but not that much."

In January the IMF projected that the region's economies would expand 1.1 per cent this year, followed by three per cent growth in 2010.

Eyzaguirre said today's more negative outlook would still pale compared to losses projected in the big three economic regions: the United States, Europe and Japan.

The IMF has predicted that the global economy will slow this year, having projected a 0.5 per cent rise in global gross domestic product, the lowest level since World War II.

Eyzaguirre warned Latin American financial institutions could suffer continued capital losses, describing the situation as "delicate."