Latin America and the Caribbean: Global Economic Prospects, January 2026 (RSM)

Summary

• Growth in Latin America and the Caribbean moderated to an estimated 2.2 percent last year and is projected to edge up to 2.3 percent in 2026 and 2.6 percent in 2027.p.1
• Brazil maintained its policy rate at 15 percent amid sticky inflation expectations, while Chile and Mexico cut rates.p.1
• Mexico is anticipated to expand 1.3 percent in 2026 and 1.8 percent in 2027, with roughly 80 percent of exports destined for the United States.p.3
• Caribbean growth is set to increase to 5.2 percent in 2026 and 6.6 percent in 2027, driven by Guyana's oil boom.p.4
• Excluding Guyana, the Caribbean is projected to grow by about 2.9 percent and 3.7 percent.p.4
• Peru's activity is projected to expand by 2.5 percent in 2026 and 2027.p.4

Key insights

1. Risks to the outlook are tilted to the downside, including higher trade barriers, softer commodity prices and elevated debt burdens.p.1
2. Commodity exporters are likely to remain comparatively insulated from increased trade barriers.p.2
3. Ongoing tariff disputes and the pending USMCA review are expected to continue weighing on investment and trade.p.3
4. The Dominican Republic is expected to expand by an average of 4.5 percent over the forecast horizon.p.4
5. On the upside, rapid advances in artificial intelligence could support growth by spurring investment in digital infrastructure.p.4
6. Remittances constitute a large share of income in parts of Central America and the Caribbean, leaving them vulnerable to slowdowns in host countries.p.5