Economic growth across Latin America and the Caribbean (LAC) appears relatively solid, forecasted to reach 2.3% in 2026 and 2.5% in 2027 (from 2.5% in 2025), with Venezuela and Panama leading the region’s growth figures with 5% each. This according to the latest IMF Regional Economic Outlook published today.
Continued high commodity prices, relatively supportive financial conditions, still-elevated remittance inflows, and solid global demand—including for tourism—are expected to sustain favorable near-term dynamics in the region.
In most of South America, favorable energy, mineral, and grain prices, the reshaping of global trade relationships, and the region’s limited exposure to geopolitical conflicts are supporting inward investment and activity. In some countries, these positive dynamics are interacting with improving policy frameworks to further boost growth and lessen vulnerabilities.
In Central America, robust domestic demand, energized by high levels of remittance inflows and a reduction in violent crime in some countries, is allowing growth rates to remain strong.
In Brazil 🇧🇷, growth is forecast to ease from 2.3% in 2025 to 2.2% in 2026, supported by high commodity prices and firm domestic demand. For 2027 a further slowdown to 1.9% is expected.
In Mexico 🇲🇽, uncertainty surrounding the economic outlook is holding back business investment and intensifying structural challenges and domestic policy concerns. This particularly relates to the prospect of changes to trade relations with the United States. Nevertheless, Mexico is gaining from rising US demand for electronics. The economy is projected to expand from 0.6% in 2025 to 1.5% in 2026 and 1.8% percent in 2027.
Venezuela & Panama Lead 2026 LATAM Growth Forecast 𝘄𝗶𝘁𝗵 5% growth each 📈
According to the new data, the 2026 Top growth countries in Latin America are expected to be Venezuela 🇻🇪 (5% in 2026 and 7% in 2027), Panama 🇵🇦 (5% in 2026; 4.2% in 2027). They are followed by El Salvador 🇸🇻 and Paraguay 🇵🇾 (4.5 in 2026 & 4% 2027 each), with El Salvador moving up from 6th place from the IMF’s previous April forecast. With 4.0% expected growth, Guatemala 🇬🇹 ranks 3rd. Argentina dropped out of the top-10 ranking altogether, with 2.1% growth in 2026 and 3.5% in 2027.
Inflation
Inflation (avg.) across Latin America and the Caribbean (ex. Venezuela) is projected to drop from 7.6% in 2025 to 6.8% in 2026 and 5.7% in 2027. Panama’s -0.1% inflation in 2025, is expected to pick up to 1.9% this year and 2% in 2027, the second lowest percentage in Latin America (after Costa Rica with -0.8% for 2026).
IMF World Economic Outlook October 2026
IMF Regional Economic Outlook Western Hemisphere October 2026
Note: Latin America (17 countries) excludes the Caribbean economies
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