Morgan Stanley recently lowered its growth forecast for all Latin American economies with the exception of Chile, which posted solid GDP growth in the first half of 2011.

The iShares MSCI Chile Index (NYSEArca: ECH) is in negative territory for the year, however.

Economies in Latin America are forecast to expand 3.6% next year, down from Morgan Stanley’s previous estimate of 4.6%. All country growth forecasts were cut 1% except Chile, which was not changed due to a growing GDP, reports Bill Faries and Matthew Bristow for Bloomberg. The lower base from the 2010 earthquake helped Chile display some of this growth. [Chile ETF: How it Beat the Odds]

“An extended bout of weakness in the developed world is likely to see both Chinese exports, and import demand soften and with that commodity prices, which have underpinned Latin America’s era of abundance,” the report said. “Ultimately, we concluded that Latin America would unlikely be spared.” [Why Chile ETF Could Lead the Latin American Pack]

Analysts are speculating that Chile will join the ranks of Mexico and Brazil, where interest rates are likely to be cut to protect the economies throughout the sovereign debt crisis in Europe and the fiscal worries in the U.S.