The UN Economic Commission for Latin America and the Caribbean has revised upward its 2025 regional growth forecast to 2.2% from 2.0%, though it warned that Latin America faces a protracted period of subdued expansion extending through 2026.

The Santiago-based organisation presented its Economic Survey of Latin America and the Caribbean 2025 on August 5, stressing the region's urgent need to mobilise greater resources to overcome development traps characterised by low growth, high inequality and limited social mobility. Executive Secretary José Manuel Salazar-Xirinachs highlighted the challenge of preserving macroeconomic stability whilst advancing productive transformation in an increasingly volatile international environment.

Brazil received the most substantial upgrade, with growth expectations rising to 2.3% from 2.0%, reflecting improved first-quarter performance. Chile's forecast increased to 2.4% from 2.2%, alongside upward revisions for Panama, Paraguay, Uruguay and Venezuela. Argentina maintained its robust 5.0% projection, whilst Colombia held at 2.5% and Peru at 3.1%. The region's second-largest economy remained unchanged at a modest 0.3%.

South America is projected to expand 2.7% in 2025, driven primarily by recovery in Argentina and Ecuador following 2024 contractions, plus an upturn in growth in Colombia and Paraguay's solid expansion. However, most other subregional countries face deceleration versus 2024 levels, with growth expected to ease to 2.4% in 2026.

Central America confronts weaker prospects at 1.0% growth, nearly half the 1.8% recorded in 2024, due to weakened US demand, particularly affecting the subregion. Guatemala, Panama and the Dominican Republic will exhibit more dynamic performance exceeding 3.5% thanks to services sector momentum, private consumption and remittances. A modest recovery to 1.7% is anticipated for 2026, though structural dependence on the US economy maintains vulnerability to external shocks.

The Caribbean, excluding oil-rich Guyana, faces 1.8% growth in 2025 and 1.7% in 2026, marking deceleration due to lower US GDP growth reducing tourism demand. The subregion continues confronting high energy import costs, transportation expenses and notable natural disaster exposure. Guyana maintains exceptional growth rates through continued hydrocarbon sector investment.

ECLAC outlined three strategic pillars for enhancing development financing: domestic resource mobilisation through improved fiscal quality, strengthened tax collection and reduced evasion; external and private resource mobilisation via international financial architecture reform aligned with the Sevilla Commitment; and strengthening development banks' financing roles to accelerate Sustainable Development Goals achievement by 2030.