UPDATE 1-UN sees FDI in Latam likely down 35-45 pct in 2009

(Updates with fresh quotes, details)

By Antonio de la Jara

SANTIAGO, May 27 (Reuters) - Foreign direct investment in
Latin America will likely fall by 35-45 percent this year from
a record $128.3 billion in 2008, the United Nations' regional
economic body forecast on Wednesday.

"We are expecting FDI flows to the region to fall during
2009," the U.N. Economic Commission for Latin America and the
Caribbean (ECLAC) said in a report, citing uncertainty about
the length and depth of the global financial crisis.

Alicia Barcena, the body's executive secretary, expects to
see a sharp drop in investment in the retail and manufacturing
sectors, given a sharp fall in demand and the fact that many
companies have put expansion plans on ice.

"We believe that the mining and steel sectors will hold up
better and won't suffer as much," Barcena said.

Foreign direct investment in Latin America rose 13 percent
in 2008 from a year earlier, though Mexico was a notable
exception, with investment down 20 percent last year compared
to 2007.

ECLAC said earlier this month it would 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.

However Barcena told the Reuters Latin American Investment
Summit in Santiago in early May that Latin America's economic
contraction in 2009 will not exceed the 1.5 percent drop the
International Monetary Fund has forecast.

Barcena believes 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 she expects regional
growth next year will be "very low".
(Writing by Simon Gardner, Editing by Chizu Nomiyama)