By: Staff Writer
March 3, 2026
The Economic Commission for Latin America and the Caribbean (ECLAC) said in their latest Preliminary Overview of the Economies of Latin America and the Caribbean (LAC), 2025 that inflation continued to decline amid low growth throughout the LAC.
The report said: “Economic growth in Latin America and the Caribbean remained subdued in 2025, constrained by weak domestic demand and an uncertain global environment. External sector results were mixed: some countries recorded higher exports of goods and services, while others were affected by pressure on the terms of trade and greater trade volatility.
“Inflation continued to decline, making it possible to move towards less restrictive monetary policies, although investment remained subdued and productivity showed no signs of picking up. Momentum came mainly from the services sector, while manufacturing and construction lagged behind.
“For 2026, the economic outlook for Latin America and the Caribbean points to continued slow growth in the region, characterized by moderate growth rates, an uncertain international environment and persistent internal constraints on efforts to foster investment, strengthen productivity and expand formal employment.”
The report continued: “The global economic slowdown will continue in 2026. Following growth of 3.3% in 2024, global economic activity slowed slightly in 2025, with expansion of 3.2% projected for the year. This performance is explained by tariff escalation in the United States and a general context of uncertainty. In addition, high levels of public debt have restricted the scope for government spending, and high long-term interest rates have been an obstacle to higher investment.
“All this has been compounded by structural problems such as the productivity crisis in the eurozone and persistent deflation in China, which are limiting global momentum. Projections for 2026 point to growth of 3.0%, below the estimate for 2025, in a context of far-reaching transformations related to the rapid adoption of artificial intelligence technologies, which are increasing productivity in certain segments but also generating financial risks because of their predominance in stock market capitalization and the concentration of high valuations among a few companies.
It added: “In 2025, the current account deficit in Latin America and the Caribbean will stabilize at around1.6% of GDP (roughly US$ 105 billion), but there will be marked differences between subregions. These regional results stem from a combination of international and national factors. The balance, which represents a continuation of the correction that began in 2022, is a considerable improvement compared to the period 2015–2019, when the deficit averaged around 2.5% of GDP. A deficit is also projected for 2026 (albeit slightly smaller at 1.5%), reflecting the continuation of a consolidation process to address external imbalances.
“Subregional results were mixed. Central America is closer to balancing its current account, having reduced its deficit thanks to a steady flow of remittances. South American economies recorded a moderate deficit, helped along by a goods account surplus owed to the partial recovery of natural resources exports. In the Caribbean, meanwhile, a weaker tourism sector and high external financing costs resulted in a significant deterioration in the current account.”