Economic growth in Latin America and the Caribbean (LAC) is expected to rise from 2.2% last year to 2.5% in 2025 and 2.6% in 2026. Growth is primarily driven by Argentina’s rebound, easing interest rates, and declining inflation. A possible decline in commodity prices is expected to only have a moderate impact on growth. This according to the World Bank Global Economic Prospects, Regional Outlook Latin America & the Caribbean, published last week.
The largest Latin American economies Brazil 🇧🇷 and Mexico 🇲🇽 are expected to slow this year (to 2.2% and 1.5% respectively) due to weak consumption and investment, with only minor improvements forecasted for 2026 (2.3% and 1.6% growth). Colombia’s 🇨🇴 growth is forecasted to rise from 1.7% in 2024 to 3% in 2025 and 2.9% in 2026.
The Top-3 growth countries in Latin America are Argentina 🇦🇷 (5% in 2025; 4.7% in 2026), Guatemala 🇬🇹 (4% in both 2025 & 2026) and Honduras 🇭🇳 / Paraguay 🇵🇾 (both 3.6% in 2025 & 2026).
Growth in Panama 🇵🇦 (ranked 6th) is forecasted to recover to 3 % this year and 3.5% in 2026 (2024 growth was 2.4%). The growth is powered by services exports.
- World Bank global Economic Prospects: Regional Outlook Latin America & the Caribbean January 2025
- World Bank Global Economic Prospects, Highlights Latin America & the Caribbean January 2025