The World Bank has slightly raised its forecast for Latin America and the Caribbean’s economic growth in 2026, signaling cautious optimism but warning that the region will remain the slowest-growing in the world. Persistent inflation, high debt, and global uncertainty, especially around U.S. trade policies, continue to restrain recovery.
Slower Progress Despite Upward Revision
In its latest report published by Reuters, the World Bank now expects Latin America’s economy to grow 2.5% in 2026, up from its June estimate of 2.4%. The projection for 2025 remains unchanged at 2.3%, marginally above last year’s 2.2%.
“Governments in the region have steered their economies through repeated shocks while preserving stability,” said Susana Cordeiro Guerra, the bank’s vice president for Latin America and the Caribbean.
“Now is the time to continue building on that foundation—accelerating reforms to improve the business climate, invest in infrastructure, and mobilize private capital.”
Brazil’s growth outlook for 2025 stayed at 2.4%, slowing to 2.2% in 2026. Mexico’s economy is expected to expand 0.5% this year, up from a previous forecast of 0.2%, and accelerate to 1.4% next year.
Argentina remains the fastest-growing among the region’s major economies, but its 2025 estimate dropped from 5.5% to 4.6%. Growth in 2026 is forecast to moderate to 4%. Meanwhile, Bolivia faces contraction both this year and next—posing additional challenges ahead of its October 19 presidential runoff.
While overall regional growth remains broadly aligned with June’s projections, the World Bank warned that structural obstacles continue to limit long-term progress. Inflation targets are becoming harder to achieve, and interest rates are falling slower than anticipated.
Chief economist William Maloney emphasized that weaknesses in education and training systems are constraining productivity: “Firms want to hire more people, but they cannot get the workers. It’s some combination of the school system and the training system that’s not doing that right.”
The report highlights enduring barriers such as inadequate infrastructure, limited access to capital for new businesses, and labor-market mismatches that prevent the region from realizing its full economic potential.