The IMF’s October 16 outlook forecast 2.3% growth for Latin America and the Caribbean in 2026, below its July estimate, and urged governments to rein in debt and raise productivity while conditions remain favorable.
The Fund also lowered its 2027 projection to 2.5%, from 2.7% in July, while projecting global growth of 3.1% this year. Strong U.S. demand, commodity prices, financing conditions, tourism and remittances are helping support regional activity. But the IMF warned that these tailwinds do not address the region’s high public debt and weak productivity growth, and may not last.
Fiscal consolidation measures taken across Latin America in 2025 fell short of expectations, the report said, and the effort has stalled in many countries this year. Some governments are cushioning the impact of higher energy costs, which can work against efforts to strengthen public finances. The Fund sees growth risks tilted downward and inflation risks upward, as energy and food price pressures complicate the outlook.
It urged policymakers to use the current window to rebuild fiscal room and pursue reforms that could improve productivity and support longer-term growth.