In its update of the region’s growth perspectives, the World Bank predicts a slight improvement in Latin America
The World Bank (BM) maintained the growth forecast for Latin America and the Caribbean in 2.3% in 2025 and 2.5% in 2026, with an improvement for the prospects of Mexico, which will approach a 2% growth in 2027.
The agency presented on October 7 its economic report for the region ‘Transforming entrepreneurship for employment and growth’, which has an update of the growth prospects disseminated in June 2025.
“We continue to predict a slight improvement in Latin America, but the world economy has become a little more challenging since our last forecast,” he explained in an interview with Efe William Maloney, chief economist for Latin America and the Caribbean of the BM.
In particular, it indicates the slowdown in the reduction of interest rates as one of the main “complications” for Latin America because it assumes that “external financing is expensive” and that “your own interest rates cannot be lowered due to fear of capital exit.”
The impact of tariffs, “minor” of the expected
Maloney assures that the tariffs imposed by the president of the United States, Donald Trump, have impacted on the economies of the region but has not been as serious as expected.
«Tariffs have introduced a lot of uncertainty in the world trade system, and this has depressed investment throughout the region. But the real impact of tariffs on Latin America exports is probably less than one might think, ”says the economist.
As he explains, the big problem that these taxes have meant is that it is now more difficult to plan the movements, which complicates the arrival of new companies to the region.
This adds to other challenges in the region as a “less qualified workforce” as well as “weak infrastructure and violence and uncertainty associated with organized crime in many countries.”
*Also read: UNDP foresees that Venezuelan economy rises 5.8% in 2025 and inflation closes at 275%
Brazil holds the pulse and Mexico pending T-MEC
One of the most punished in Trump’s commercial war is Brazil, which imposed a 40%tariff. However, it has not suffered so much because “only 12% of Brazilian exports go to the US and half are exempt,” says Maloney.
In fact, the BM report maintains the growth estimate for this year for the Great South American economy and in 2.2% the provision of 2026, just like the latest study.
Having the US as a commercial partner has caused uncertainty in most countries in the region, but in Mexico he has especially impacted because he has Washington as his main commercial partner.
Even so, the report improves its forecasts up to 0.5 % for this year, 1.4 % for next and 1.9 % by 2027.
Maloney warns that although Mexico could even “increase its exports to the US”, because, among other things, most of them are still covered by the T-MEC, the country is being harmed and everything depends on the future of the agreement, which must now be renegotiated.
“We have to be attentive, but it is not as serious as it was believed six months ago,” he says.
Argentina reduces its growth forecast
The BM reduced growth forecasts for Argentina at almost one point with respect to the last study: 4.6 % for this year and 4 % for 2026 and 2027. On the other hand, the report highlights the remarkable economic rebound after two years of recession.
The IMF has agreed to support the country with a credit program of 20,000 million dollars and the US negotiates swap lines and purchase of debt.
Costa Rica and Panama, who stood out for rebuilding in the previous report, maintain their upward trend with estimates of 3.6% and 3.9% for this year, respectively.
The region maintains its slight advance although the BM ensures that it is “the slowest between the regions of the world.” The agency proposes to invest in human capital and create a favorable environment for companies as key points to stimulate growth.
With information from the EFE agency
*Journalism in Venezuela is exercised in a hostile environment for the press with dozens of legal instruments arranged for the punishment of the word, especially the laws “against hatred”, “against fascism” and “against blockade.” This content was written taking into consideration the threats and limits that, consequently, have been imposed on the dissemination of information from within the country.
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