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Latin America remains hindered by obstacles that range from weak investments to a drop in exports and commodity prices, and tighter access to the financing that largely fueled growth in recent years, according to the World Economic Forum (WEF).
The region's growth will drop to 2.5% this year, said WEF in its Global Competitiveness Report 2014-2015.
To recover the positive economic momentum of the past few years, the region must implement structural reforms to improve market functionality and invest in infrastructure, skills development and innovation.
Additionally it needs to boost productivity and improve its overall competitiveness, according to the report.
Chile remained the most competitive country in the region, ranking 33rd of 144 countries and moving up one place over last year. The country's most notable and traditional strengths include a stable institutional setup (28th), low levels of corruption (25th), an efficient government (21st), and a positive macroeconomic environment (22nd).
Yet the country must diversify its economy by moving toward more knowledge-based activities, considering the decline in the price of minerals.
Panama followed close behind, ranking 48th. Paraguay, Venezuela and Haiti ranked the lowest at 119th, 131st and 137th, respectively.
Argentina, struggling with its sovereign debt debacle, also ranked poorly at 104, flat over 2013.
Regional powerhouses Brazil and Mexico ranked 57th and 61st, respectively, dropping from 56th and 55th the year prior.
In Brazil, the most problematic factor for doing business is tax and labor regulations, and infrastructure, the report reveals.