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IMF Cuts Latin America, Caribbean Growth Forecasts on Energy Shock, Little AI Boost
The fund said higher fuel and power costs are lifting inflation and borrowing costs, while most of the region gets little help from artificial intelligence.
- On Tuesday, the International Monetary Fund trimmed growth forecasts for Latin America and the Caribbean to 2.3% for 2026, citing an energy shock from the Middle East war and limited benefits from AI-driven investment.
- Higher fuel and power costs, driven by Brent crude prices about 45% above prewar levels, are squeezing households and businesses. The IMF noted "there is little offset from the technology upturn in most countries."
- Country-Level revisions show Chile's growth forecast cut to 0.6%, while the IMF lowered Colombia's 2026 projection to 2.2% and Argentina's to 2.1%, reflecting the broader regional slowdown.
- Joblessness across the region is projected to rise, with the IMF warning that market turmoil could hit emerging economies through higher government borrowing costs, currency pressure, and tighter financial conditions.
- Regional growth is projected at 2.5% for 2027, though the Fund warned that risks remain tilted to the downside, with general government debt in some nations expected to rise significantly by 2028.
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IMF expects Costa Rica and Honduras to grow 3.3% in 2026, the lowest rate in Central America, according to its economic projections
The International Monetary Fund foresees an expansion of the economy of 0.6 per cent this year, compared with 1.8 per cent in July, while the Central Bank's Economic Expectations Survey shows 0.2 per cent, compared with 0.7 per cent last month. Thus, in the Chile region, it will only exceed Bolivia, which will contract 3 per cent.
·Las Condes, Chile
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IMF cuts Latin America, Caribbean growth forecasts on energy shock ...
·London, United Kingdom
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El Universo+2 Reposted by 2 other sources
The agency noted that the potential climate effects of El Niño may alter the prices of raw materials.
·Guayaquil, Ecuador
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Global economic outlook report points to geopolitical instability and technological advances as the two major forces shaping the way
·Madrid, Spain
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Total News Sources19
Leaning Left1Leaning Right5Center3Last UpdatedBias Distribution56% Right
Bias Distribution
- 56% of the sources lean Right
56% Right
11%
C 33%
R 56%
Factuality
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