OECD: LatAm GDP to shrink by up to 1.9 percent.

Latin American economies are expected to shrink by between 1.5 and 1.9 percent this year but should return to growth in 2010, the Organization for Economic Cooperation and Development said in a report on Monday.

"Latin America as a whole is showing signs of recovery and stabilization," the Paris-based organization said in statement.

"Economic activity is helped by improving conditions in global financial and commodity markets, as well as recovering exports," it said.

The OECD said the continent's slump compared favorably with the average 3.5 percent contraction forecast for the organization's 30 member countries as a whole.

The report was presented during a summit of leaders from Latin America, Spain, Portugal and Andorra.

The OECD said 2010 should see substantial growth in Latin America although considerably less than the average 5 percent growth rates registered during the 2004-2008 period.

OECD Secretary-General Angel Gurria also warned that the social effects of the crisis would be considerable.

Unemployment in Latin America would reach 8.5 percent in 2009, with around 18 million of the continent's urban population out of work, he said.

He added that if the economic recovery is not consolidated, it could swell the number of the number of people living below the poverty line in the region by nine million to 39 million, "wiping out the progress made between 2003 and 2007."

Gurria said some Latin American countries remained vulnerable to volatile commodity prices and a continuing slump in migrants' remittances.

The report said Latin America should reject protectionist measures and diversify its exports.

"The crisis has opened an extraordinary window of opportunity to promote the needed reforms to address pending structural challenges," said Gurria.

The OECD is comprised of the world's 30 richest democracies.