Durrant Pate/Senior Business Journalist

The Economic Commission for Latin America and the Caribbean (ECLAC) has revised upwards its growth projections for the region, estimating that Gross Domestic Product (GDP) will increase by 2.4 percent in 2025 and 2.3 per cent in 2026. 

The new figure for 2025 represents an upward adjustment from the 2.2 per cent forecast in the August 2025 Economic Survey, and it is the second upward revision since April. The update reflects a slightly improved global outlook, although ECLAC emphasises that growth remains modest and that deeper productive transformation is needed to accelerate development, boost productivity, and create better jobs.

ECLAC says the new projections stem from a less adverse international environment than previously anticipated. However, several challenges persist. The organisation notes that global trade dynamics have been affected by new U.S. tariff announcements since April, and that growth among Latin America’s main trading partners, while slowing compared to 2024, is performing somewhat better than expected earlier in the year. 

Inflation has declined more slowly than projected, which has delayed interest rate cuts by major central banks and influenced the dollar’s value in global markets. While external factors remain key, ECLAC highlights that domestic issues such as limited fiscal and monetary policy space, export dependence, and production structures also influence the performance of each economy. 

Growth patterns vary across subregions

Against this backdrop, growth patterns vary across subregions. South America’s Gross Domestic Product is projected to expand by 2.9 per cent in 2025, up from 2.7 per cent in August, supported by stronger trade with China and higher prices for metals and extractive goods. Central America’s forecast remains stable at 2.6 per cent. 

Mexico’s growth is now estimated at 0.6 per cent, an upward revision driven by better trade outcomes and a resilient U.S. economy. The English- and Dutch-speaking Caribbean is expected to grow by 4.7 per cent overall, or 1.9 per cent excluding Guyana, reflecting continued strength in tourism. For 2026, the regional growth forecast remains 2.3 per cent, extending a period of modest expansion that would bring average GDP growth to just 1.6 per cent for 2017–2026. The labour market is expected to mirror this moderate pace. 

Employment is projected to grow by 1.5 per cent in 2025 and 1.2 per cent in 2026, with limited gains in formal job creation. While slight improvements are anticipated in reducing informality and gender disparities, both remain widespread, which underscores persistent structural weaknesses. These employment trends highlight the need for stronger policy responses that support decent work and productivity gains.

ECLAC cautions that the global environment remains uncertain, with risks such as financial market volatility, fiscal strains in advanced economies, and renewed trade tensions. It calls on regional governments to maintain macroeconomic stability, reinforce fiscal and monetary institutions, and implement productive development policies that enhance productivity, diversify exports, and encourage sustainable investment. The organisation also stresses the importance of international cooperation and multilateralism to sustain recovery and counteract growing global fragmentation.