Regional Growth Holds Firm as Brazil and Mexico Face Different Pressures – Growth in Latin America and the Caribbean is expected to remain largely steady at 2.3 percent in 2026 before improving to 2.7 percent in 2027. This according to the latest IMF World Economic Outlook published on Tuesday. Across the region, the effects of the conflict in the Middle East are uneven, with smaller economies likely to face the most adverse consequences.
In Brazil 🇧🇷, growth is forecast to ease from 2.3% in 2025 to 1.9% in 2026, before edging slightly up to 2% in 2027. The conflict is expected to have a modest positive net impact in 2026 because Brazil is a net energy exporter, adding around 0.2 percentage point to growth. By 2027, however, weaker global demand, rising input costs, including fertilizers, and tighter financial conditions are projected to outweigh that benefit, lowering growth by about 0.3 percentage point relative to the January forecast.
In Mexico 🇲🇽, slower growth in 2026, driven by fiscal consolidation, restrictive monetary policy, and pressure from trade tensions, is expected to be followed by a modest recovery. The economy is projected to expand from 0.6% in 2025 to 1.6% in 2026 and 2.2% percent in 2027. A downward revision of -0.7% for 2026 & +0.1% for 2027 compared to the January IMF forecast.
Top LATAM Growth Countries; Panama 3rd with 3.8% 📈
According to the new data, the 2026 Top 3 growth countries in Latin America are expected to be Paraguay 🇵🇾 (4.2% in 2026 and 3.5% in 2027), Panama 🇵🇦 (3.8% in 2026; 4.5% in 2027) and Guatemala 🇬🇹 (3.9% in 2026 and 4% in 2027). With 3.8% expected growth, Panama maintains its 3rd position compared to the previous IMF forecast for Panama (October 2025). Note: Venezuela was excluded due to data issues.
The IMF World Economic Outlook growth expectations for Latin America are higher than those in the World Bank Latin America Economic Update April 2026, published on April 8th (note: they are not directly comparable). Latin America: IMF: 2.3% (2026) & 2.7% (2027), World Bank 2.1 (2026) & 2.4% (2027) Growth; Panama: IMF 3.8 (2026) & 4.5 (2027), World Bank 3.9 (2026) & 4.1 (2027).
Inflation
Inflation (avg.) across Latin America and the Caribbean (incl. Argentina and Venezuela) is projected to drop from 7.6% in 2025 to 6.7% in 2026 and 4.9% in 2027. Panama’s 0% inflation in 2025, is expected to pick up to 1.4% this year and 2% in 2027, the second lowest percentage in Latin America (after Costa Rica with -0.44% for 2026).
Tomorrow, 17 April, Nigel Chalk, IMF Director of Western Hemisphere Department, will give a press conference on the Regional Economic Outlook for the Western Hemisphere.
IMF World Economic Outlook April 2026
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