Latin America and the Caribbean Projected to Grow 2.2% in 2026, Marked by Geopolitical Conflicts

• The economies of Latin America and the Caribbean are projected to grow by 2.2% on average in 2026, according to the Economic Commission for Latin America and the Caribbean (ECLAC).
• This represents a slight downward revision from the 2.3% estimated in December 2025, reflecting a more complex external environment characterised by greater geopolitical tensions, restrictive financial conditions and the resurgence of inflationary pressures.
• According to the United Nations regional economic commission, this reduced dynamism is expected to be widespread. Growth is seen decelerating in 24 of the region’s 33 countries, and accelerating in just 7, with the region having had four straight years of growth rates around 2.3%, revealing a pattern of low capacity for growth.
• The deterioration in the external scenario is driven by increased geopolitical tensions and the war in the Middle East, with the average price of oil in the first three weeks of April 74% higher than in December 2025. As a result, this has generated global inflationary pressures, raised production and transportation costs, and contributed to higher food prices and weaker international trade activity
• At the regional level, growth is constrained mainly by less dynamic private consumption. Investment shows signs of recovering but continues to be moderate in the majority of countries. Employment growth is estimated at around 1.1% in 2026, versus 1.5% in 2025, and inflation is topping 3% in 2026 compared with 2.4% in 2025.
• Subregional performance remains uneven. South America is seen growing by 2.4%, Central America by 2.2%, and the English- and Dutch-speaking Caribbean by 5.6% - driven largely by high growth in Guyana.
• Relevant risks remain, including the continuation of restrictive financial conditions, inflationary pressures from energy and food prices, volatility in international markets, vulnerability to external shocks, and weak domestic demand. Furthermore, structural challenges such as low trend growth and high exposure to external shocks continue to weigh on the region’s economic performance.

(Source: Economic Commission for Latin America and the Caribbean)