World Bank Projects Modest Economic Growth for Latin America and the Caribbean

The World Bank reported on Wednesday that economic development across Latin America and the Caribbean is projected to grow by 2.1 percent this year. This figure represents a decline from the 2.4 percent growth rate recorded in 2025. In its latest regional economic update, the Washington-based institution anticipates that growth will recover to 2.4 percent by 2027.

This subdued outlook is attributed to a challenging macroeconomic environment characterized by high borrowing costs, weak external demand, and inflationary pressures stemming from geopolitical uncertainty, which have collectively dampened private investment and job creation efforts throughout the region. The report notes that consumer spending continues to provide modest support to the economy, though overall investment remains constrained as firms navigate a difficult external landscape. Global interest rates are expected to remain elevated, while growth in major economies like China and other advanced nations continues to slow.

Furthermore, geopolitical tensions, including the ongoing conflict in the Middle East, have pushed energy prices higher and introduced inflationary risks that may delay necessary monetary easing. These factors place significant pressure on governments already operating under tight fiscal constraints, where public debt ratios remain high by historical standards and interest payments limit available funding for social and infrastructure investment. Specific growth projections vary significantly across the region.

The Bahamas is expected to register 2.2 percent growth this year, while Barbados is projected at 2.7 percent. Belize is forecasted to see 2.4 percent growth, and Dominica is expected to reach 2.8 percent. Grenada is projected at 3.1 percent, while Guyana leads with a significant 16.3 percent growth rate this year.

Haiti is expected to grow by 0.6 percent, and Jamaica faces a one percent decline. St. Lucia is projected at 1.9 percent, St. Vincent and the Grenadines at 3.0 percent, Suriname at 4.0 percent, and Trinidad and Tobago at 0.7 percent. Looking toward 2027, many of these nations are expected to see shifts in their economic trajectories, with Guyana projected to reach 23.5 percent and Jamaica expected to improve to 3.2 percent.

Susana Cordeiro Guerra, World Bank vice president for Latin America and the Caribbean, stated that the region possesses the assets and reform capacity to achieve more, emphasizing that the central ambition should be to create quality jobs that power growth and lift productivity. The region maintains strategic strengths, including approximately 50 percent of global lithium reserves and one third of global copper supplies, alongside a relatively clean energy mix. To capitalize on these assets, the World Bank suggests that governments must focus on industrial policies that prioritize foundational elements such as skills, openness, and strong institutions.

William Maloney, World Bank Group chief economist for Latin America and the Caribbean, noted that for the region to increase growth and diversify its economies, industrial or productivity policies need to invest in the base, including skills, openness, and strong institutions, which are the conditions that allow firms to place bets, innovate, compete, and grow. The report outlines four primary recommendations to build this base: closing skills gaps through education and technical training, expanding access to finance to encourage risk-taking, deepening trade integration to boost competitiveness, and building institutional capacity to design and sustain effective policies. These steps are intended to help the region pivot toward more inclusive and productive growth by harnessing its natural resources and energy potential.

The World Bank report concludes that restoring business confidence and unlocking private investment remain essential for long-term economic stability in the region.