The Economic Commission for Latin America and the Caribbean (ECLAC) on October 22 lowered its forecast for regional growth this year to 2.0%, from the 2.2% it projected in August, as geopolitical tensions, more expensive energy and food, and tighter global financing weigh on the region. It kept its 2027 projection at 2.5%.
The United Nations commission expects the regional economy to slow from 2.4% expansion in 2025 before recovering moderately next year, in what it described as an international environment of rising uncertainty.
Drawing on its International Trade Outlook for Latin America and the Caribbean, 2026, published on October 15, the Santiago-based body said disrupted logistics routes and less predictable trade policy were changing the conditions under which the region’s economies operate. External shocks are cutting into foreign demand and raising production and import costs, ECLAC said, though the impact varies. Some commodity exporters stand to gain from higher prices, while import-dependent economies face rising costs and weaker household purchasing power.
Among the region’s largest economies, ECLAC sees Brazil growing 2.1% this year and 2.0% in 2027, after 2.3% in 2025. Mexico is forecast to expand 1.6% in 2026, up from 0.5% last year, and 2.2% in 2027.
Argentina’s outlook weakened markedly. ECLAC now expects growth of 1.9% this year, against 4.5% in 2025 and the 3.3% it forecast in August, before a rebound to 3.0% in 2027. Chile is projected to post the sharpest slowdown among the major economies, with growth falling to 0.2% from 2.5% last year and recovering to 2.2% in 2027. Colombia is seen growing 2.4% and 2.3% over the two years, and Peru 3.0% and 3.3%.
Guyana remains the region’s outlier. ECLAC projects its oil-driven economy will grow 22.0% in 2026, after 19.3% in 2025, and 17.0% in 2027. Venezuela is forecast to expand 6.5% in both years.
By subregion, South America is expected to grow 2.1% in 2026 and 2.4% in 2027. Central America’s projections of 1.7% and 2.8% are depressed by Cuba and Haiti, and rise to 4.1% and 4.2% when those two economies are excluded. The Caribbean is forecast to grow 7.4% and 7.0%, figures that fall to 1.2% and 1.9% without Guyana.
ECLAC said employment was still rising, but more slowly, which limits gains in household income and consumption and hampers efforts to reduce informality. Inflation is edging higher on energy and food costs, hitting hardest those households that spend a larger share of income on essentials.
The commission also expects international borrowing to become more expensive. It noted that the US Federal Reserve raised rates by 25 basis points in September, its first increase in three years, and that the European Central Bank delivered 25-basis-point hikes in both June and September, raising debt-service costs for governments, companies and consumers.
“Inflationary pressures and higher global interest rates could reduce leeway for flexible monetary policy in the region’s economies,” ECLAC said.
The 2027 outlook will hinge on global demand, commodity prices, financing conditions and the region’s ability to sustain consumption and investment, the commission said, adding that persistent international risks and possible effects of the El Niño weather phenomenon cloud the picture. It reiterated calls for governments to align labour, fiscal, financing and productive development policies to lift productivity and formal employment.
The cut extends a gradual downgrade of ECLAC’s 2026 outlook. A year ago the commission projected 2.3% growth for this year and held that figure in December. In April it trimmed the forecast to 2.2%, citing a surge in oil prices after the escalation of conflict in the Middle East, and kept it there in August while projecting 2.5% for 2027.
ECLAC’s new figure falls below those of other multilateral lenders. The World Bank, in its regional update on October 6, forecast 2.2% growth for Latin America and the Caribbean in 2026, after projecting 2.5% for 2027 in June. The bank put Brazil’s growth at 2.1% this year and 1.7% next, Mexico’s at 1.4% and 1.8%, and Argentina’s at 2.1% and 3.0%.
The International Monetary Fund projected 2.3% regional growth for 2026 in its October World Economic Outlook. In its latest update, the fund lowered its 2026 forecast for Argentina to 2.1% from 3.5% and projected 22.3% growth for Guyana, while trimming its global growth estimate to 3.1%.