(Bloomberg) -- Latin America’s two largest economies will grow less than 1% this year amid weakening confidence and policy uncertainty, according to the International Monetary Fund.

Brazil and Mexico will grow 0.8% and 0.9%, respectively, according to a July update of the IMF’s World Economic Outlook. Two months ago, the IMF had forecast that Brazil would expand between 1% and 1.5%, while its outlook for Mexico’s economy was 1.6% in April. Those cuts drag the IMF’s growth outlook for Latin America down to 0.6%, from 0.8% previously.

“The sizable downward revision for 2019 reflects downgrades to Brazil, where sentiment has weakened considerably as uncertainty persists about the approval of pension and other structural reforms,” the IMF said, adding that in Mexico “investment remains weak and private consumption has slowed, reflecting policy uncertainty, weakening confidence, and rising borrowing costs, which could climb further following the recent sovereign rating downgrade.”

To read more: Lost Decade Specter Haunts Latin America as Big Economies Falter

Further, the IMF forecasts a “devastating” economic contraction of 35% in Venezuela this year. That’s even worse than multilateral’s expectation of a 25% contraction in its April report.

To contact the reporters on this story: David Biller in Rio de Janeiro at dbiller1@bloomberg.net;Daniela Guzman in Santiago at dguzman26@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, ;Walter Brandimarte at wbrandimarte@bloomberg.net, Matthew Malinowski

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