The International Monetary Fund has urged Latin American governments to take advantage of favourable global conditions to cut public debt and raise productivity. The fund warned that the good times may not last.
In its Regional Economic Outlook, the IMF projected growth of 2.3 per cent for Latin America and the Caribbean this year and 2.5 per cent in 2027. Both figures are slightly lower than its July forecasts.
Nigel Chalk, head of the IMF’s Western Hemisphere Department, said public debt continues to rise across the region. He added that favourable financing conditions may not last much longer.
Growth Falls Behind
The fund raised its global growth forecast to 3.1 per cent for 2026 but cut the outlook for emerging economies. Latin America is growing more slowly than other developing regions, the report said.
Strong demand from the United States, high commodity prices and tourism are helping the region. But these factors cannot fix its deep problems of high debt and weak productivity, according to the fund.
Argentina Faces Sharp Downgrade
Argentina saw the biggest cut to its outlook. The IMF now expects its economy to grow by 2.1 per cent this year, down from 4.5 per cent in 2025. Brazil’s forecast was also lowered, while Mexico’s was raised slightly to 1.5 per cent.
Officials said uncertainty over tariffs and global politics is holding back investment. The fund called on governments to act now, while conditions are still supportive.
The fund’s outlook also noted that better trade terms and easier financial conditions added about 0.6 percentage points to growth in Brazil, Chile, Colombia, Mexico and Peru this year. But tariff uncertainty continues to weigh on the region’s prospects.
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