(Updates with quotes)
By Antonio de la Jara
SANTIAGO, May 4 (Reuters) - The U.N. Economic Commission for Latin America and the Caribbean (ECLAC) will likely revise down its forecast for a 0.3 percent economic contraction in the region this year, as H1N1 flu compounds the ravages of global financial crisis.
Alicia Barcena, the regional economic body's executive secretary, told the Reuters Latin American Investment Summit in Santiago, however, that Latin America's economic contraction in 2009 will not exceed the 1.5 percent drop the International Monetary Fund has forecast.
"We are definitely going to revise the figure. It is possible we will revise it down, but not as low as the IMF," Barcena told Reuters in an interview. "All the measures have been taken in Latin America, so it won't fall any more."
Barcena said she believed the global-crisis pummeled Latin American economy had hit bottom and expects it to start to recover at the end of 2009 or in early 2010. But regional growth next year will be "very low", she said.
She expects Mexico's economy to shrink more this year than the 2.0 percent ECLAC has previously forecast because of the H1N1 flu which is hammering internal demand and its tourism industry.
"The number we have for Mexico will undoubtedly come down," Barcena said. "Tourism flows are falling and domestic demand is stalled in Mexico."
Tourism accounts for 1.5 percent of Mexico's GDP, according to ECLAC. Mexican tourism revenue totals $13 billion a year, and employs 5 percent of the workforce.
"The impact of the interruption of tourist arrivals to Mexico will last a while, because even when the emergency is over, its image has been a little battered," Barcena said. "It took China a while to recover from SARS."
The industrial sector in Brazil, the region's biggest economy, is showing signs of a pickup, and the economy could contract 0.5 percent to 1.0 percent this year, Barcena said. ECLAC had previously forecast Brazil's economy would shrink 1.0 percent this year.
"Brazilian industry had been declining and yet there is a pickup," she said. "Brazil's big hope is its domestic demand and we have to see how trade between Brazil and Argentina is faring."
"The United States is slowly starting to pick up and that could help Latin America," she added. "We think that the region's economy will start to pick up at the end of this year or the beginning of next year. We will see growth (in Latin America) next year, but it will be very low."
Barcena said fiscal stimulus measures would slowly energize the region's economy, highlighting the solidity of local financial systems in the face of global crisis.
"The financial systems in Latin America are much healthier than in the rest of the world," she said. "The impact in the financial system in Asia and Europe is much deeper, maybe because of lessons learned during past (Latin American) crises." (For summit blog: http://blogs.reuters.com/summits/) (Editing by Simon Gardner, Dave Zimmerman)