MercoPress. South Atlantic News Agency

ECLAC trims its 2026 forecast for Latin America and the Caribbean to 2.2%

If the projections hold, the region will complete five consecutive years of growth averaging close to 2.3%. The regional economy expanded 2.4% in 2025 and 2.3% in 2024

The Economic Commission for Latin America and the Caribbean on Thursday lowered its regional growth projection for 2026 to 2.2%, one tenth below the estimate issued in December. The United Nations body expects a partial recovery to 2.5% in 2027 and warns that the current pace is insufficient to sustainably raise income per capita.

If the projections hold, the region will complete five consecutive years of growth averaging close to 2.3%. The regional economy expanded 2.4% in 2025 and 2.3% in 2024. “The projections show the region would preserve the gains made in macroeconomic stability, though with less economic dynamism,” said the commission, which is based in Santiago de Chile.

The revision reflects a more complex external environment than anticipated late last year, with heightened geopolitical tensions, restrictive financial conditions and global inflationary pressures. The figures were compiled using information available up to July 30.

Performance across subregions varies widely. South America would grow 2.5% in both 2026 and 2027. The Caribbean would advance 5.6% and 7.9% respectively, driven almost entirely by Guyana, whose oil expansion lifts its growth to 16.2% this year and 19.7% next; without that country, Caribbean rates would fall to 1.1% and 2.2%. Central America is listed at 1.6% for 2026, though the figure is shaped by the inclusion of Cuba and Haiti in that grouping: excluding both economies, the subregion would grow 4.0% this year and 4.2% next.

After Guyana, the projections are led by Venezuela at 6.5%, Nicaragua at 4.5%, Panama at 4.4%, Paraguay at 4.3%, and Guatemala and the Dominican Republic at 4.0%. The middle band includes El Salvador, Costa Rica and Honduras, followed by Argentina at 3.3%, Peru at 3.2%, Colombia at 2.6%, Ecuador at 2.4% and Brazil at 2.2%. Closing the positive range are Chile at 1.6%, Uruguay at 1.5%, Mexico at 1.3% and Bolivia at 0.5%. Cuba would contract 10.3% this year and 5.1% in 2027, while Haiti would fall 1.9% and Jamaica 1.2%.

The report attributes the sluggish performance to structural constraints: low investment, weak productivity growth, slowing formal job creation and high informality. “To overcome the low-growth-capacity trap, we need to raise investment and productivity,” said executive secretary José Manuel Salazar-Xirinachs, who called for progress towards productive formalisation that broadens social protection and generates quality formal employment.