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BRASILIA, Brazil —

Latin America is disappointing investors, economists and businesses with slower-than-forecast growth as waning commodity prices and strong currencies hit nations that failed to diversify and become more competitive.

The five biggest investment-grade markets in the region — magnets for foreign capital as rich countries stalled — expanded below projections or show signs of weakness.

While cruising at twice the speed of the 1980s for the past decade, the region has reduced poverty and debt. Still, it has done too little to invest windfall revenue in roads, technology and education, and to promote businesses outside of mining and agriculture.

Instead of lessening vulnerabilities to commodity boom-and-bust cycles, Brazil, Mexico, Colombia, Chile and Peru increased primary exports to an average 71.3 percent of foreign sales from 58.3 percent in the decade through 2011.

“The easy growth has been collected; now comes the difficult part,” said Alberto Ramos, a senior economist at Goldman Sachs who specializes in Latin America. “They need to find domestic sources of growth, rather than relying on abundant external liquidity and high commodity prices.”

A weaker Latin America could cause investors to pull back, said James Gaul, a portfolio manager at Boston Advisors, which oversees about $2.5 billion in assets. The MSCI Emerging Markets Latin America Index, which tracks the major stock exchanges in the region, has lost about 4 percent this year, while the MSCI AC Asia Pacific Index gained 6 percent.

Stocks in Brazil, Latin America’s biggest economy, have dropped about 9 percent in dollar terms, the worst performance of the 18 largest exchanges Bloomberg tracks, followed by Mexico, which fell about 5 percent.

Projections for the region’s economic expansion in 2013 have declined to 3.38 percent from 3.81 percent six months ago, according to one survey of analysts. Asian countries are forecast to accelerate 6.44 percent, another survey shows.

“We’re more cautious on them today than we were several years ago, driven by this decline in the global, commodity-led growth theme,” Gaul said.

Easing Chinese demand for iron ore, copper and soy has pushed the region’s 12-month trade surplus through March to the lowest level in at least a decade.

While the Brazilian real and the Mexican peso weakened in May, they are still the best performers this year among the 16 most-traded currencies Bloomberg tracks, increasing the relative cost of producing industrial goods in the region.

The rising currency and high utility costs in Mexico, the region’s second-biggest economy, make the U.S. more attractive for Katcon Global, a Monterrey-based auto-parts producer, according to its chairman, Fernando Turner.

“We wouldn’t make future investments in Mexico in this environment,” Turner said. “I think we would in the U.S.”

Mexican President Enrique Peña Nieto has pledged to remove barriers that have held growth to an average 2.5 percent in the past decade by attracting more private investment in energy and boosting competition in sectors such as the telecommunications industry. He said the changes could accelerate the expansion of GDP to 6 percent annually.

“If you look at results in general, they’ve disappointed,” said Alonso Cervera, an economist at Credit Suisse Group in Mexico City. “What we saw in the first quarter of this year is a confirmation that Mexico is still dependent on a healthy rest of the world.”

Optimism over the global economy has dimmed as the pace of Chinese growth eased and the recession in the euro region extended to a record sixth quarter.

Latin America probably won’t sustain growth at current levels, given labor constraints and recent trends for capital and productivity increases, the International Monetary Fund said in a report n May 13. While GDP jumped 4 percent on average each year in the decade through 2012, potential growth through 2017 is closer to 3.25 percent, it said.

Brazil has an annual shortage of 20,000 new engineers, according to the Federal Council of Engineering, Architecture and Agronomy. Companies spend 2,600 hours a year dealing with tax issues compared with 209 hours in the East Asia and Pacific region, the World Bank’s Doing Business 2013 report shows.

Brazilian President Dilma Rousseff seeks to attract $235 billion in investment for ports, roads, airports and railways to help companies reduce production costs, and her administration has said it is counting on public works for the 2014 World Cup to accelerate growth by 0.4 percent annually through 2019.

She has cut electricity and payroll taxes and is auctioning new oil-exploration rights. She also has said the government is working to remove infrastructure bottlenecks and heighten the competitiveness of domestic companies.

A total 212 vessels awaited cargo in Brazil during March, and the line of trucks to unload soybeans at the nation’s busiest port surged to a record 15 miles long, according to Santos-based brokerage and shipper SA Commodities.

The region won’t recover to levels of growth seen during the previous decade because the commodity boom is over and policymakers failed to reduce their dependence on primary goods when money flowed into their economies, said Michael Shaoul, chairman of Marketfield Asset Management in New York.

“Latin America hasn’t bottomed yet,” Shaoul said. “It’s in the middle of a painful adjustment.”