World Bank lifts LAC Economic Growth Estimate for 2026

• 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 United States (U.S.) tariff policies. The region's economy is likely to expand 2.5% in 2026, up from a June forecast of 2.4%. Its forecast for this year was unchanged at 2.3%, which would represent a slight improvement over last year's 2.2%.
• For Latin America, Brazil'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. Argentina 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%. Bolivia's economy is now seen contracting this year and next, presenting challenges for the winner of a presidential runoff vote scheduled for October 19.
• For the Caribbean, Guyana is still set to record the largest growth, with GDP projected at 11.8% in 2025 and 22.4% in 2026. Jamaica is forecasted to grow by 2% in 2025 and 1.4% in 2026; Barbados: 2.7% and 2.0%; the Bahamas: 2.3% and 2.1%; the Dominican Republic: 3.0% and 4.3%; and Trinidad and Tobago: 1.4% and 0.3%, respectively.
• The World Bank said that 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. The report noted that familiar barriers like weak infrastructure, a bias in favour of established companies, and poor education at all levels were inhibiting entrepreneurship and how big companies can grow.

(Source: World Bank and Reuters)