Durrant Pate/Contributor

The Economic Commission for Latin America and the Caribbean (ECLAC) has reaffirmed its forecast of 2.4% regional economic growth in 2025 for Latin America and the Caribbean (LAC) countries, slightly above the 2.3% recorded in 2024.

The forecast is contained in the Preliminary Balance of the Economies of Latin America and the Caribbean 2025 report, presented at ECLAC’s headquarters in Santiago, Chile, recently. For 2026, the United Nations agency continues to project 2.3% economic growth, warning that the region remains caught in a low-growth trap amid persistent global uncertainty. ECLAC noted that four consecutive years of growth rates near 2.3% confirm the region’s limited capacity for sustained economic expansion. 

The report points to differences in economic activity trajectories at a subregional level with South America seen growing by 2.9% in 2025. This growth is driven by recoveries in Argentina, Bolivia and Ecuador after their economies contracted in 2024. 

This year, the South American expansion is forecast to decelerate to 2.4%, due to lower growth in the majority of its economies. Meanwhile, Central America is seen registering a 2.6% expansion in 2025, affected by weaker demand from the United States. 

Growth is forecast to improve to 3.0% in 2026

In 2026, growth is forecast to improve to 3.0%, although vulnerabilities remain in relation to trade, remittances, access to financing and exposure to climate change. The Caribbean is expected to grow by 5.5% in 2025 and 8.2% in 2026, underpinned by significant growth in oil activity in Guyana, and aided by the normalisation of tourism and an improved performance in the construction sector. 

However, this subregion is highly exposed to natural disasters, which constrains its economies’ capacity for growth. ECLAC’s Preliminary Overview 2025 estimates that employment growth will also lose momentum, slowing from 2.0% in 2024 to 1.5% in 2025 and 1.3% in 2026. 

In terms of prices, median regional inflation is seen reaching 3.0% in 2026, above the 2.4% estimated for the end of 2025 but below the levels seen during the inflationary shocks of 2021-2022, and around the values targeted by central banks in the region. The report warns that the scenario in 2026 will be subject to multiple external and internal risks. 

With regard to external risks, the region’s growth will be contingent upon the dynamics seen in GDP growth globally, especially among its main trading partners, and in global trade. Another influential factor will be the United States’ monetary policy stance, which has been more expansionary, and possible changes to that country’s economic and trade policy. 

In addition, regional growth in 2026 may be affected by uncertainty in international financial markets and possible volatility in external financing flows, including Foreign Direct Investment and remittances.