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LIMA, Oct 6 (Reuters) - The International Monetary Fund said Tuesday that it now expects Latin America's economy to shrink 0.3 percent this year instead of growing 0.5 percent, largely due to a steep recession in Brazil and slumping commodity prices.
It would be the first recession for the Latin American and Caribbean region since 2009.
But the IMF, which is holding its annual meeting in Peru this week, said the region's economy should recover in 2016 to expand by 0.8 percent.
The IMF had put 2016 growth at 1.7 percent in its last forecast in July, before regional giant Brazil's economy took a sharp turn for the worse with a slump in output, a ballooning corruption scandal and painful credit rating downgrade.
The IMF's growth revisions for Latin America, part of its gloomier take on the global economy, were the sharpest for any region. Its new forecast for Brazil's 2015 recession - 3 percent - was double its previous view.
"The downturn in Brazil was deeper than expected," the IMF said in its World Economic Outlook report. It warned of "significant negative spillovers" in the region.
The IMF also noted slower-than-expected growth in Mexico and ongoing problems in Venezuela, where it sees the economy shrinking 10 percent this year while inflation is set to soar above 100 percent.
Latin America's economy expanded 1.3 percent last year after slowing steadily from 6.1 percent in 2010.
The region had outshone advanced economies in the wake of the global financial crisis, but sliding prices for commodities that drive growth in the region have since dampened prospects.
Last month, a top IMF official said Latin America was in a weaker position now than in 2008 to respond to external economic shocks because of higher debt and diminished growth potential. (Reporting By Mitra Taj; Editing by Chizu Nomiyama)