NEW YORK, Oct 7 (Reuters) – The World Bank has slightly raised its projection for economic expansion in Latin America and the Caribbean for 2026, citing modest improvements despite persistent challenges such as entrenched inflation, elevated debt levels, and growing concerns tied to U.S. trade tariffs.
The regional economy is now expected to grow 2.5% in 2026, an increase from the 2.4% projected in June. The outlook for the current year remains steady at 2.3%, which would mark a marginal improvement compared to 2023’s 2.2%.
Brazil’s growth forecast for 2025 holds at 2.4%, though a slowdown to 2.2% is anticipated in 2026. Mexico, on the other hand, shows signs of recovery, with its 2024 growth estimate revised upward to 0.5% from 0.2%, and projected to rise further to 1.4% next year.
Susana Cordeiro Guerra, the World Bank’s vice president for the region, noted that regional governments have managed economic turbulence while maintaining macroeconomic stability. She emphasized the importance of advancing structural reforms to strengthen the investment environment, enhance infrastructure, and attract private-sector funding.
Argentina continues to lead among major economies in the region in terms of growth momentum, although its 2025 forecast was significantly lowered to 4.6% from 5.5%. Growth is expected to ease to 4% in 2026. Meanwhile, Bolivia faces economic contraction in both 2024 and 2025, posing difficulties for the incoming administration following the October 19 presidential runoff.
The institution highlighted that while price stability remains a goal, achieving inflation targets has become more difficult, and monetary easing is progressing at a slower pace than expected. Global trade uncertainties—particularly stemming from American tariff measures—have dampened business investment.
Longstanding structural issues, including inadequate infrastructure, preferential treatment for incumbent firms, and deficiencies in education and vocational training, continue to hinder enterprise development and scalability. William Maloney, the World Bank’s chief economist for the region, pointed out that labor market mismatches are widespread: companies seek to expand their workforce but struggle to find qualified candidates, a shortfall he attributes to shortcomings in both schooling and skills development programs.
— news from Reuters
— News Original —
World Bank lifts Latin America economic growth estimate for 2026
NEW YORK, Oct 7 (Reuters) – The World Bank nudged up its estimate for economic growth in Latin America and the Caribbean next year, though the region remains the world ‘s slowest-growing due to stubborn inflation, high debt and rising uncertainties due to U.S. tariff policies. n nThe region ‘s economy is likely to expand 2.5% in 2026, up from a June forecast of 2.4%, the World Bank said. Its forecast for this year was unchanged at 2.3%, which would represent a slight improvement over last year ‘s 2.2%. n nSign up here. n nBrazil ‘s estimate for 2025 remained at 2.4%, with growth seen decelerating to 2.2% next year. Mexico ‘s economy is now expected to expand 0.5% this year, up from the June forecast of 0.2%, with growth accelerating to 1.4% next year. n n”Governments in the region have steered their economies through repeated shocks while preserving stability,” said Susana Cordeiro Guerra, vice president for Latin America and the Caribbean at the World Bank. n n”Now is the time to continue building on that foundation—accelerating reforms to improve the business climate, invest in enabling infrastructure, and mobilize private capital.” n nArgentina remains the fastest growing among the region ‘s largest economies, but its 2025 estimate was cut by the most, to 4.6% from 5.5%. For 2026, growth for the grains exporter is expected to decelerate to 4%. n nBolivia ‘s economy is now seen contracting this year and next, presenting challenges for the winner of a presidential runoff vote scheduled for October 19. n nThe World Bank said while there is expectation for stable prices, inflation targets have gotten harder to meet and interest rates are falling more slowly. Uncertainty about global trade policies – in the face of tariffs imposed by the United States – has weighed on investment across the board. n nThe report noted that familiar barriers like weak infrastructure, a bias in favor of established companies, and poor education at all levels were inhibiting entrepreneurship and how big companies can grow. n n”Firms want to hire more people, but they cannot get the workers,” said William Maloney, chief economist for Latin America and the Caribbean at the World Bank. n n”And it ‘s some combination of the school system and the training system that ‘s not doing that right.” n nReporting by Rodrigo Campos in New York; Editing by Edwina Gibbs