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Latin American companies are shedding workers and having trouble getting loans to finance exports. Governments are likely to run budget deficits after producing surpluses, immigrants to the US and Europe are expected to send less money home and millions of people will be forced back into poverty, even as the strongest countries spend billions to lessen the pain.
The good news is that most Latin American countries saved money, found new export markets and kept inflation low during the good years. This has left them better prepared for the downturn.
Peru, Chile, Panama and Brazil seem best positioned to ride out the economic storm, analysts said.
Countries led by free-spending populist leaders could face a particularly difficult 2009.
Ecuador has defaulted on a portion of its foreign debt and seems to be turning inward.
Venezuela failed to diversify its oil-dependent economy and is facing a sharp slowdown from the global oil bust while experiencing Latin America's highest inflation rate, 30 percent.
Argentina is suffering from plummeting soybean prices, double-digit inflation and a scarcity of foreign investment.
Mexico and the Central American countries are facing an especially bleak 2009 because their economies are tied so directly to the US, whose economy is expected to contract in 2009.
Latin America grew by 4.6 percent in 2008 and 5.8 percent in 2007, the agency reports.
"One by one, the motors of growth are disappearing," Alicia Barcena, the agency's executive secretary, said in a December presentation in Santiago, where he ticked off a decline in those economic drivers: export growth, remittances, commodity prices and foreign investment.
In Brazil, the world's 10th biggest economy, sales of new cars, apartments and home appliances plummeted in October and haven't recovered.
Brazilian mining and metals firm Companhia Vale do Rio Doce, facing a sharp drop in demand for steel worldwide, already has laid off 1,000 workers in Brazil and announced a worldwide reduction of 30 million tons of iron ore production.