Overview
- Latin America and the Caribbean are projected to expand 2.1% in 2026, roughly matching the region’s long-term pace.
- Argentina is rebounding from recession with 4.3% growth expected in 2025 and 3% in 2026, nearly double Brazil and Mexico, yet it ranks as the region’s most financially vulnerable in the bank’s stress metric.
- Mexico saw the steepest downgrade in the latest review, with growth now estimated at 0.5% for 2025.
- The report cites stronger labor markets and improved investor sentiment, with regional unemployment near multi‑year lows and average sovereign risk falling to 209 basis points by end‑2025 from 268 in 2019.
- Despite progress, the bank warns that average public debt near 59% of GDP and rising interest costs strain budgets, and it recommends fiscal strengthening, digitalization that boosts tax capacity, AI upskilling, and governance to harness critical minerals such as lithium and copper.