The International Monetary Fund urged Latin American governments to use still-favourable global conditions to cut public debt and raise productivity, warning that fiscal adjustment has stalled in many countries, according to the fund's Regional Economic Outlook and Reuters reporting.
The outlook, titled Turning Tailwinds into Lasting Gains, projects growth for Latin America and the Caribbean at 2.3% in 2026 and 2.5% in 2027, down 0.1 and 0.2 percentage points from July forecasts, Reuters reported. For the wider Western Hemisphere, including the United States and Canada, growth is projected at 2.2% this year and 2.3% in 2027.
Nigel Chalk, head of the IMF's Western Hemisphere Department, said in prepared remarks that public debt continues to rise for the region as a whole, while favourable financing conditions may not last. The fund said strong US demand, high commodity prices, supportive financial conditions and robust tourism and remittances are sustaining activity, but cannot resolve the region's fundamental challenges of high public debt and weak productivity growth.
The fund estimated that better terms of trade and looser financial conditions add about 0.6 percentage point to 2026 growth in Brazil, Chile, Colombia, Mexico and Peru relative to last year, while uncertainty over tariffs and geopolitics partly offsets that expansion. On Argentina, where the expected expansion was cut sharply, Chalk said data this year have been weaker than expected but he sees growth rebounding next year.
The IMF also raised its 2026 world growth forecast by 0.1 point from July to 3.1% and left 2027 at 3.4%, Reuters reported. Growth in emerging and developing economies is projected at 3.7% and 4.4%, leaving Latin America and the Caribbean behind. The message to the region is to use the current window to rebuild fiscal buffers, preserve price stability and push structural reforms while tailwinds last.