IMF cuts Latin America, Caribbean growth forecasts on energy shock, little AI boost
The International Monetary Fund has lowered its growth forecasts for Latin America and the Caribbean due to an energy shock, with minimal impact from the artificial intelligence boom, according to its World Economic Outlook released in Bangkok. The Fund now projects regional growth of 2.3% for this year, down from 2.5% and its July forecast of 2.4% for 2026.
The forecast for 2027 has also been reduced to 2.5% from 2.7%. Despite the energy crisis caused by the Middle East war, the IMF credits AI-driven investment for resilience in the global economy. In Latin America, the impact of the energy shock varies depending on the balance between commodity exporters' gains and energy importers' losses, and on the credibility of central banks' inflation targets.
Argentina is the hardest hit, with its growth now projected at 2.1% for this year, down from 4.5% in 2025, and its 2027 forecast lowered to 3.5% from 4.0%. Brazil and Mexico see their growth rates fall to 2.2% and 1.5%, respectively, while Chile's growth slows to 0.6% this year. The IMF warns that risks remain on the downside, citing potential market turmoil leading to higher borrowing costs, pressure on currencies, and tighter financial conditions for emerging economies.
Written by urgent.news from CNA - Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
