By: Staff Writer
April 17, 2026
The International Monetary Fund (IMF) in its World Economic Outlook for 2026 said that economic growth in Latin America and the Caribbean will top 2.3 percent in 2026 and 2.7 percent in 2027.
The fund, said: “In Latin America and the Caribbean, growth is projected to remain broadly stable at 2.3 percent in 2026 and pick up to 2.7 percent in 2027. The impact from the conflict in the Middle East within the region is heterogeneous, with smaller economies affected more negatively.
“In Brazil, growth is projected to moderate to 1.9 percent in 2026, unchanged from October, and 2.0 percent in 2027.
The war is expected to have a small net positive effect in 2026, as a result of the country being a net energy exporter, boosting growth by about 0.2 percentage point. In 2027, slowing global demand, higher input costs (including of fertilizers), and tighter financial conditions are expected to dominate, reducing growth by approximately 0.3 percentage point, compared with the projection in January. Adequate international reserves, low reliance on foreign-currency debt, large government cash buffers, and a flexible exchange rate are expected to help the country weather the shock.”
The IMF notes that shifting trade policies (including potential US tariffs) and global geopolitical conflicts continue to pose risks to the economic outlook.
The fund also said: “In Mexico, weaker growth in 2025 amid fiscal consolidation, restrictive monetary policy, and headwinds from trade tensions is expected to give way to a mild recovery, with the economy expanding at a rate of 1.6 percent in 2026 and 2.2 percent in 2027.”
While inflationary pressures are easing, high public debt and limited fiscal space constrain growth, requiring fiscal consolidation and structural reforms to enhance productivity and address long-term growth declines. As of early 2026, forecasts for the Caribbean included roughly 6.4 percent average consumer price inflation and a negative current account balance.
Persistent high debt and high-interest costs necessitate that countries focus on fiscal consolidation and strengthening monetary policy frameworks.
To improve weakening long-term prospects, the IMF highlights the need to address low productivity via better, more efficient investment, education, and reduced bureaucratic burdens, such as those impacting the ECCU.
Structural reforms targeting labour markets, tax administration, and business regulation are crucial, with potential productivity gains estimated at 34 to 65 percent.
The region needs to better manage risks from natural disasters, which require specialized, sustainable policy adjustments.
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