The report, however, forecast growth in the region to improve to 3.6 and 4.1 percent in 2014 and 2015, respectively.
“Growth in the Caribbean has been hampered by weak external demand, for the tourism sector in particular, and weaker commodity prices, but is expected to strengthen in the outlook,” it said.
The report said the regional fiscal position “slightly deteriorated” last year, adding that public debt “remains high in the Caribbean countries”.
However, it said many countries retain space for countercyclical policies.
The UN report said inflation outlook was “fairly stable, although inflation is expected to accelerate somewhat in 2013 amid more accommodative monetary policies in some countries”.
Sergio Vieira, a UN economic affairs officer who monitors the region, urged that Latin American and Caribbean countries address violence and insecurity that affect potential investors.
“Violence has an impact on economic growth through several channels,” he told the Miami Herald, adding “instead of channelling private and public spending to aspects of development, they are investing in security”.
Last month, a UN panel of development experts cited regional violence as a “major hindrance to growth” that could, if not addressed, cause tremendous economic decline.
The UN has called for international coordination of policies to address job recovery and world debt levels.