The International Monetary Fund (IMF) has revised downwards growth forecasts for Latin America and the Caribbean for this year and next. In its Global Economic Perspective report, released this Tuesday (13) in Bangkok, it stated that most of the region is benefiting little from the boom in artificial intelligence (AI), which has helped other economies absorb the energy shock caused by the war in the Middle East.
The IMF projected regional growth of 2.3% this year. The index represents a drop in relation to the 2.5% growth forecast for 2025 and the July forecast of 2.4% for 2026. The IMF reduced its forecast for 2027, from 2.7% to 2.5%.
The downward revisions in the region come even as the Fund has slightly raised its global growth forecast for this year from 3% (in July) to 3.1%, attributing the resilience of what it calls a “divided global economy” to the redirection of energy supplies and investments driven by artificial intelligence.
The war in the Middle East has turned energy into a global inflationary shock, with Brent crude about 45% above its pre-war level. Higher fuel and energy costs are putting pressure on families and businesses, while fears of persistent inflation have helped push global financing costs to levels not seen in several decades.
In Latin America, according to the IMF, the effect of the energy shock depends on whether the gains of commodity exporters exceed the losses of energy importers and the credibility of central banks' inflation targets, adding that “there is little compensation coming from the recovery of the technology sector in most countries”.
Of the three Latin American economies that the IMF listed separately in its July “Global Economic Outlook” update, Argentina suffered the largest reduction in its output estimate. The Fund now expects Argentine growth to slow to 2.1% this year, compared to 4.5% in 2025 — well below the 3.5% forecast in July — and has reduced the forecast for 2027 from 4% to 3.5%. The report shows that inflation is expected to fall to 32.5% this year, compared to 41.9% in 2025.
Forecasts for Brazil's growth fell to 2.2% this year and 1.9% for 2027, down from 2.4% and 2.2% in July, when the IMF expected Brazilian growth to “remain resilient” this year. The Fund now expects growth to slow next year, citing still-tight monetary conditions aimed at bringing inflation back to target, the withdrawal of government fiscal support and global uncertainty.
Mexico followed the opposite path, with its forecast for 2026 raised from 1.2% to 1.5%. Previously, the Fund linked Mexico's expected recovery to less restrictive domestic policies. Now it points to exports — including through AI supply chains — and investment, which are stabilizing as growth accelerates next year. Even so, he reduced the forecast for Mexico in 2027 from 1.9% to 1.8% and stated that trade and other uncertainties would continue to slow activity.
The report's tables show that Chile's growth will slow from 2.5% to 0.6% this year, that Bolivia's economy will shrink by 3.% after a 1.6% contraction in 2025 and that inflation in Venezuela will accelerate from 252% to 467.9%.
The IMF stated that risks remain tilted to the downside. The IMF warned that market turbulence could affect emerging economies through higher public debt costs, pressure on their currencies and tighter local financial conditions.
