WASHINGTON, (CMC) – With China growing at a more moderate pace and commodity prices stabilising at lower levels, the World Bank has urged Latin America and the Caribbean to adapt to a “new normal”.

In its latest report, the Washington based financial institution says average Gross Domestic Product (GDP) growth in the region is expected to reach only 0.8 per cent this year, and may remain at low rates in the future, “unless ambitious pro-growth structural reforms are adopted”.

The bank’s semi-annual report states that a boost in savings, which would need to be a key ingredient in a pro-growth agenda, would also help rebuild monetary and fiscal policy maneuvering space.

The report states that the strong growth of the 2000s is not likely to revisit the region, unless vigorous pro-growth reforms are adopted.

“The evidence suggests that the external shocks emanating from China’s deceleration and terms of trade changes are permanent,” said Augusto de la Torre, World Bank Chief Economist for Latin America and the Caribbean.

“In the absence of growth-friendly structural reform, this situation firmly points in the direction of an also permanent growth slowdown for the region, with rates that would be insufficient to support significant social progress”, he added.

The report says beyond averages, the region continues to tell a widely diverse story, stating that commodity exporting countries in South America are growing at a much slower pace than commodity importers in Central America and the Caribbean.

Especially hurting among the exporters is Venezuela with its economy expected to shrink again by five per cent in 2015.

The report, issued amid the World Bank Group and International Monetary Fund (IMF) Spring Meetings, finds that Latin America and the Caribbean decelerated more than all other emerging regions.

“This reflects the amplification effects of an unusually strong decline in investment among commodity exporting countries in the region,” the report stated.