IMF trims Latin America’s outlook to 2.3% and sharply cuts Argentina’s

Globally, the Fund forecasts growth of 3.1% in 2026 and 3.4% in 2027, while global inflation would rise to 4.7% this year, driven by energy and food

The International Monetary Fund has lowered its 2026 growth forecast for Latin America and the Caribbean to 2.3%, a tenth of a point less than in July, and sharply cut Argentina’s, from 3.5% to 2.1%. Chile and Uruguay are also among the region’s largest downward revisions, according to the World Economic Outlook presented on Monday in Bangkok, during the annual meetings of the Fund and the World Bank.

For Argentina, Fund economist Petya Koeva Brooks attributed the 1.4-point cut to “lower activity observed through the third quarter of this year” and to “weaker domestic demand in a context of still tight domestic financial conditions and the continued structural transformation of the economy”. The Fund also raised its forecast for average inflation this year to 32.5%, from 30.4% in April, and for 2027 to 21.2%, from 15.7%. It projects unemployment of 7.6% in 2026 and 7.1% in 2027. Argentina’s growth forecast for next year was revised from 4% to 3.5%. Economy Minister Luis Caputo is attending the meetings.

Uruguay’s forecast was cut by half a point to 1.3%, in line with the Fund mission that visited the country in September, which attributed the slowdown to the impact of drought on farming. Chile saw the largest adjustment, of 1.8 points. Brazil would grow 2.2% this year and 1.9% in 2027, two and three tenths less than in July, because of still-tight monetary conditions and the withdrawal of fiscal support. For the region, the Fund expects 2.5% growth in 2027 and inflation of 6.8% this year, excluding Venezuela. According to the report, higher energy prices benefit commodity exporters and hurt importers.

Globally, the Fund forecasts growth of 3.1% in 2026 and 3.4% in 2027, while global inflation would rise to 4.7% this year, driven by energy and food. It assumes an average oil price of US$95.74 a barrel in 2026, against US$67.74 in 2025, and that the Strait of Hormuz will reopen in March 2027.

In the United States, headline inflation would rise to 3.6% this year and fall to 2.8% in 2027, while the economy would grow 2.3% in both years, supported by consumption, fiscal policy and investment in artificial intelligence. The Fund identifies a prolonged war in the Middle East and an abrupt correction in expectations about artificial intelligence as the main risks.