IMF Lowers Growth Forecasts for Latin America and Caribbean

The International Monetary Fund lowered its growth forecasts for Latin America and the Caribbean for 2026 and 2027 in its World Economic Outlook released October 13. The Fund now projects regional growth of 2.3% this year, a decrease from the 2.4% forecast issued in July. This downgrade stems from an energy shock caused by the Middle East war and a failure to realize expected benefits from the artificial intelligence boom, which has left households and businesses struggling with higher fuel and power costs.

Economic impacts vary across the region. Argentina received the deepest cut in output estimates, with growth expected to slow to 2.1% this year. Brazil also saw a decline in forecasts, driven by the withdrawal of fiscal support and restrictive monetary conditions.

In contrast, the IMF raised Mexico's 2026 growth forecast to 1.5%. This increase is attributed to stabilizing investment and the growth of AI supply chain exports. While the regional outlook dimmed, the Fund slightly increased its overall global growth forecast to 3.1%.