The multilateral organization foresees a gradual economic recovery, after a slowdown recorded in 2024, a year in which regional growth was 2.2%.

According to the World Bank’s latest Global Economic Prospects report, Latin America and the Caribbean (LAC) is expected to experience a gradual economic recovery in 2025 and 2026, with projected growth of 2.5% and 2.6%, respectively. This follows a slowdown in 2024, where regional growth reached 2.2%.

The multilateral organization attributes the expected recovery to several factors, including the stabilization of inflation, the normalization of interest rates and a rebound in the Argentine economy. "The rise in raw material prices is expected to boost regional exports, although moderate growth in China could affect demand," it noted in a statement.

The World Bank report highlights the uneven performance among the region's major economies. In this regard, Brazil, the largest economy in LAC, is projected to experience moderate growth of around 2.2% in 2025 and 2026. Mexico, on the other hand, is expected to grow at a slower pace, around 1.5%, due to restrictive monetary policies and fiscal consolidation.

The case of Argentina stands out, a country that has been in recession for the last two years, and is expected to experience a significant recovery, with projected growth of 4.8% per year in 2025 and 2026. Colombia could also see a rebound, with growth of 3%, while Chile and Peru will grow by 2.2% and 2.5%, respectively.

Risks and challenges persist

The World Bank warns that the region’s economic recovery faces several risks, including fiscal instability, persistent underlying inflation, and tightening monetary policies. A sharper-than-expected slowdown in China could also negatively impact the region, as could potential trade restrictions and changes in migration policies. In addition, climate change remains a major threat to the region, with extreme weather events potentially affecting agriculture and infrastructure.