(File Photo: VCG)

MEXICO CITY, Sept. 12 (Xinhua) -- Latin America could see an economic expansion of 1.9 percent in 2018, or 0.1 percentage points lower than the August forecast due to declines in Argentina and Brazil, consulting firm FocusEconomics said Wednesday.

In its monthly forecast, the firm said Argentina's economy could contract by 1.2 percent this year, which implies a 1.6-percentage-point decline from last month's forecast.

As for Brazil, its GDP could grow by 1.6 percent this year, down 0.1 percentage points from last month's forecast, FocusEconomics said in a report.

The report attributed the sizeable downgrade of Argentina's GDP forecast to the financial crisis the country remains mired in.

"Elevated inflation, drought and tough IMF (International Monetary Fund)-demanded austerity are expected to cause the country's economy to contract this year and the crisis will also possibly hurt its main trading partners through lower export demand," it added.

The report also said political uncertainties in Brazil are also weighing on the region's growth outlook.

In addition, disruptions due to a truck drivers' strike that included a plunge in exports, a decline in consumer spending fueled by a lack of confidence and a spike in inflation affected the Brazilian economy, according to FocusEconomics senior economist Angela Bouzanis.

On a positive note, the report said the Mexican economy -- the second largest in the region -- could grow by 2.2 percent this year, which is unchanged from last month's forecast.

"Although external trade remains a concern, healthy factory output in the United States is seen bolstering manufacturing exports, while a clearer path forward for NAFTA (North American Free Trade Agreement) should keep supply chains intact," the report said.

Mexican Economy Minister Ildefonso Guajardo said Wednesday that the three partners in NAFTA -- Canada, the United States and Mexico -- could see a favorable outcome of the negotiations on the modernization of NAFTA in the coming days.

Launched in 1999, FocusEconomics provides economic analysis and forecasts for 127 countries as well as price forecasts for 30 key commodities. It is supported by an extensive global network of analysts.