La Jornada: Latin America will grow 2.1%; Mexico, only 1.3, predicts the WB

Latin America and the Caribbean will have still limited economic growth in 2026 due to the structural challenges they face, highlighted the World Bank (WB) in a report released over the weekend.

Regional GDP growth is forecast to be 2.1 percent this year, down from 2.4 percent in 2025.

The economic expansion forecast for Mexico is 1.3 percent this year and 1.7 percent in 2027. The WB maintained that the country faces slower growth amid restrictive domestic financial conditions, limited fiscal space and uncertainty related to trade policy.

He explained that in the region, investment remains at low levels amid high global and internal uncertainty and restrictive financing conditions.

“The main limitation is investment, which remains moderate while companies wait for clearer signals about the external environment and the domestic policy framework,” he stated.

Stagnant economic growth and persistent difficulties in creating jobs have brought industrial policy back to the center of the debate, the analysis mentions.

“Latin America and the Caribbean’s growth prospects for 2026 remain limited despite the fact that global financial conditions are slightly looser and commodity prices remain favorable,” highlighted the World Bank.

“The lack of improvement compared to 2025 coexists with less favorable prospects for several economies and implies a very small increase in per capita income,” he added in his analysis “Economic overview of Latin America and the Caribbean. Revisiting industrial policy: strategic options for today.”

He explained that consumption continues to lead, but its momentum is modest as real incomes gradually recover and real borrowing costs remain elevated.

Regarding the global outlook, the organization assures that uncertainty is increasing again and that the increase in volatility in energy prices linked to the conflict in the Middle East could delay disinflation and affect growth.

Regarding the price increase of the economies, the World Bank asserted that after a strong episode of disinflation that began in 2022, the pace of reduction in price increases is slow, since underlying inflation, especially in services, has demonstrated persistence.

“Most Latin American and Caribbean economies are expected to return inflation to near or within their targets in 2026-2027, but the ‘last mile’ has become more difficult, as price and wage dynamics and indexation keep services inflation rigid,” the World Bank said.