By: Staf Writer
August 25, 2026
The Economic Commission for Latin America and the Caribbean (ECLAC) in a new Economic Survey of Latin America and the Caribbean (LAC) said that the region’s growth will remain insufficient to support a sustained increase in per capita income and close development gaps.
The report continued: “This confirms that the main challenge facing the region’s economies is not a product of the global economic cycle but rather a problem of persistently low investment, scant productivity growth and high informality.
Accordingly, in order to overcome the trap of low capacity for growth identified by the ECLAC, the region will need to shore up macroeconomic policy space and implement complementary policies for productive development, innovation and digital transformation to drive investment, productivity and formal employment.”
ECLAC also updated its growth projections for the region, estimating that Gross Domestic Product (GDP) will rise 2.4% in 2025 and 2.3% in 2026. The new estimate for 2025 represents an upward revision from the 2.2% forecasted.
This is the second upward revision since April, when the outlook for regional growth was 2.0%. With this update, the expectation for regional growth is identical to the figure presented in December 2024 (2.4%).
this scenario represents a worsening of external conditions compared to 2025. Although the impact of hostilities in and around the Islamic Republic of Iran seems to be focused primarily on energy markets —and has been less widespread than the repercussions of the outbreak of conflict between the Russian Federation and Ukraine— heightened international uncertainty, the persistence of relatively high interest rates and the weaker growth of major economies will likely limit regional growth in 2026 and 2027.
The report also said: “Projections for emerging and developing economies are less favourable. Rising international oil and fertilizer prices and transport costs will result in deteriorating terms of trade for net energy importers, and an appreciating dollar combined with more restrictive global financing conditions will increase fiscal and external account pressures. Together, these factors will hamper the performance of international trade and fuel uncertainty regarding global growth prospects.
“For the LAC this scenario represents a worsening of external conditions compared to 2025. Although the impact of hostilities in and around the Islamic Republic of Iran seems to be focused primarily on energy markets —and has been less widespread than the repercussions of the outbreak of conflict between the Russian Federation and Ukraine— heightened international uncertainty, the persistence of relatively high interest rates and the weaker growth of major economies will likely limit regional growth in 2026 and 2027.”