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

The Economic Commission for Latin America and the Caribbean has reduced its growth forecast for the region in 2026 to 2.2%, down from the December estimate. The United Nations body projects a partial recovery to 2.5% in the following year, but warns that the current growth rate is insufficient to sustainably increase income per capita.

If the forecasts prove accurate, the region will experience five consecutive years of near-2.3% average growth. In 2025 and 2024, the regional economy expanded by 2.4% and 2.3%, respectively. The commission's Santiago-based analysts note that the region will maintain macroeconomic stability gains but with reduced economic dynamism.

The revision reflects a more complex external environment, including geopolitical tensions, tighter financial conditions, and global inflationary pressures. Performance varies significantly across subregions. South America is projected to grow by 2.5% in both 2026 and 2027, while the Caribbean is expected to advance by 5.6% and 7.9%, respectively, largely driven by Guyana's oil expansion.

Central America is forecast at 1.6% for 2026, falling to 4.0% and 4.2% if Cuba and Haiti are excluded. Venezuela, Nicaragua, Panama, Paraguay, and Guatemala lead the projections, with Guyana's growth accounting for the majority of the Caribbean's increase. Lower projections are attributed to structural constraints, such as low investment, weak productivity growth, and high informality rates.

To break the growth trap, the commission emphasizes the need for increased investment and productivity, along with progress towards formalization that expands social protection and creates high-quality employment.