By: Staff Writer
October 7, 2025
The World Bank in a new report has revised the Latin American and Caribbean growth rate slightly to from 2.2 percent to 2.3 percent in 2025 on the back of falling commodity prices and a favourable external environment.
The World Bank, in the, “Latin America and the Caribbean Economic Review, October 2025: Transformational Entrepreneurship for Jobs and Growth,” said: “Latin America and the Caribbean (LAC) continues its efforts to reignite growth and create more and better jobs, but progress remains constrained. The regional growth rate is expected to edge up slightly—from 2.2 percent in 2024 to 2.3 percent in 2025—even as many individual economies face downward revisions in their projections
“These adjustments reflect, in part, an external environment that offers limited support, shaped by a cooling global economy, falling commodity prices, and greater uncertainty. Monetary authorities in the region continue to manage inflation competently, but the “last mile” is proving longer and rockier than expected. Interest rates in advanced economies have slowed their decline, constraining interest rate reductions across the region, and delaying the needed relief for households, banks, and governments’ fiscal accounts.”
The report continued: “Investment, both public and private, remains depressed, and any momentum for “nearshoring”— the practice of bringing offshore operations to close or friendly countries—is stalled, both because of the rise in global uncertainty and because of a lack of preparedness in the region’s enabling environment to attract and host it. The persistent lack of fiscal space underlines the continuing importance of improving the efficiency of government spending, as well as rethinking the ways governments raise revenue to generate resources for development investments.
“Governments in the region have steered their economies through repeated shocks while preserving stability,” said Susana Cordeiro Guerra, vice president for Latin America and the Caribbean at the World Bank.
“Now is the time to continue building on that foundation—accelerating reforms to improve the business climate, invest in enabling infrastructure, and mobilize private capital.”
The report added: “These challenges only serve to emphasize the importance of the agenda of growth-related reforms needed in infrastructure, education, regulation, competition, and tax policy.
LAC’s slow growth is not primarily a result of the COVID-19 pandemic, or stagnant commodity prices, but has its roots in a long-standing inability of decades to identify, adapt, and exploit technological advances.
“Addressing these issues requires deep reforms: among them, improving education systems of all levels, strengthening the quality of universities and research institutes and tightening their links to the private sector; as well as deepening capital markets and facilitating the management of the risk inherent in the processes of innovation and entrepreneurship.
“This lag affects the region’s capacity to create quality jobs that empower the region to engage more competitively.”