Latin America and the Caribbean will grow 2.2% in 2026, the United Nations regional economic commission said on April 27, slightly below an earlier estimate and marginally lower than the International Monetary Fund's projection, as rising oil prices, tighter financial conditions, and slowing global trade weigh on the region's already sluggish expansion.

ECLAC, releasing updated projections from its Santiago headquarters, revised its forecast down a tenth of a percentage point from the 2.3% it had projected in December 2025, citing a more hostile external environment than anticipated. The IMF, presenting its own World Economic Outlook earlier this month, held its regional forecast at 2.3% for 2026 — a tenth of a point higher than ECLAC's reading — though both institutions converge on a picture of persistently underwhelming growth.

The commission warned that the deceleration would be widespread: growth is expected to slow in 24 of the region's 33 countries this year, with only seven accelerating. If the projection is borne out, the region will have recorded four consecutive years of expansion at around 2.3%, which ECLAC described as evidence of a "persistent pattern of low growth capacity."

The principal external driver of the downgrade is the surge in oil prices following the escalation of conflict in the Middle East triggered by the US-Israeli attack on Iran. Crude prices in the first three weeks of April averaged 74% above their December 2025 level, generating inflationary pressure and pushing up production and transportation costs across the region. That shock has been compounded by rising food prices, a slowdown in key trading partners including the euro area, China, and India, and a sharp deceleration in global trade volumes: the World Trade Organisation projects goods and services trade to expand just 2.7% in 2026, less than half the 4.7% recorded last year. In response, major central banks have adopted more cautious stances, leaving financial conditions tighter than economies in the region had anticipated at the end of 2025.

Domestically, ECLAC attributes the growth constraint primarily to weakening private consumption, with investment recovering only modestly across most countries. A deceleration already evident in the second half of 2025, particularly in the region's larger economies, has carried into this year. Employment growth is forecast at 1.1% in 2026, down from 1.5% last year, while the regional median inflation rate is expected to exceed 3%, against 2.4% in 2025, with South American economies particularly exposed to exchange rate volatility and the cost of imported inputs.

Country and subregional performance remains highly uneven. South America is projected to grow 2.4%, down from 2.9% in 2025. Central America is forecast to expand 2.2%, though that figure is dragged down by contractions in crisis-stricken Cuba and Haiti; stripping out those two economies, the subregional average rises to 3.9%. The English- and Dutch-speaking Caribbean is expected to post the strongest performance at 5.6%, though oil-rich Guyana heavily influences that figure; excluding it, the subregional average falls to just 1.2%.

Among major economies, ECLAC projects Brazil growing 2% this year, below the 2.3% recorded in 2025, while Colombia expands 2.5%. Argentina is forecast to grow 3.3%, Chile 2%, and Peru 3.2%. Mexico is projected at 1.5%, an improvement on 0.8% last year. Venezuela stands out among the region's most dynamic economies, with ECLAC projecting 6.5% growth in 2026 on the back of oil sector reactivation, improving relations with the US following Nicolas Maduro's removal, and a gradual return of business confidence. Those figures diverge in some cases from the IMF's estimates — the Washington-based lender projects Argentine growth at 3.5%, Chilean growth at 2.4%, Venezuela at 4% and Mexico at 1.6% — a reminder that the two institutions draw on different methodologies and publication timelines.

ECLAC identified a range of downside risks that could prompt further revisions: prolonged restrictive financial conditions, continued energy and food price inflation, market volatility, vulnerability to external shocks, and weak domestic demand. Structural constraints such as limited policy space, external financing pressures, and institutional weaknesses in several countries add to the challenge.

The commission called for expanded domestic and external resource mobilisation and stronger governance frameworks to stimulate investment, raise productivity, and build macroeconomic resilience.