AI could boost LatAm, Caribbean economy 5.1% over a decade but wages may fall, IDB says

Artificial intelligence (AI) could potentially boost economic output in Latin America and the Caribbean by 5.1% over a decade, according to research from the Inter-American Development Bank (IDB). However, the impact on wages depends heavily on whether workers can transition into expanding jobs created by AI adoption. If workers successfully move into these new roles, wages could rise between 2.3% and 5.3%. Conversely, if workers fail to adapt, wages may decline by 13.5% to 20.9%.

The IDB, the largest development lender in the region with 48 member countries, including 26 borrowing members in Latin America and the Caribbean, estimates that output could only slightly increase under limited AI adoption and small productivity gains, at 0.3%. The bank's 2026 flagship report, set to be released in November, will provide further insights into these projections.

Ilan Goldfajn, IDB President, emphasized the need for increased financing, long-term purchase contracts, and minimum prices to support critical-minerals supply chains. He proposed differentiating minerals produced with respect for labor conditions and the environment from those that do not meet these standards, referring to a minimum price for buyers as a "buyers' club."

However, Goldfajn did not disclose the specifics of the club or the price mechanism during a recent meeting with regional leaders, including the heads of state from Chile and Uruguay, as well as executives from major tech companies like Alphabet, Meta, and Anthropic.