The Mexican economy is projected to grow by only 1.4% by 2026 , due to factors such as limited private investment caused by uncertainty about domestic policies, coupled with a reduced boost from major public infrastructure projects, the World Bank estimated .
In its report Economic Outlook for Latin America and the Caribbean , corresponding to October 2026, the organization predicted that this growth is below the regional expansion and the 2.1% forecast for Brazil, the other largest economy in the region.
The outlook for Mexico reflects a slowdown from the 3.1% growth observed in 2023 and 1.5% in 2024. After advancing by just 0.5% in 2025, the Mexican economy is expected to show a gradual recovery, with a projected growth of 1.8% in 2027 and 2.2% in 2028, according to World Bank estimates.
Mexico’s performance is constrained by tight monetary conditions, uncertainty surrounding economic policies, and a slowdown in public investment . These factors limit the ability of domestic demand to become a stronger engine of growth.
Latin America and the Caribbean
At the regional level, the organization noted that the relative stability of economic expansion masks downward revisions in the outlook for several countries. Furthermore, per capita GDP growth is projected to be low in 2026, meaning that the increased economic activity will not necessarily translate into a significant improvement in people’s incomes.
In that regard, the World Bank projected that the economy of Latin America and the Caribbean will grow 2.2% in 2026 , below the 2.4% recorded in 2025, in an environment marked by international uncertainty, fiscal constraints and high financing costs.
In contrast to Mexico and Brazil, some Latin American economies will show greater dynamism. Paraguay is projected to grow by 4.7% in 2026, while El Salvador is expected to grow by 4.5%, Panama by 4.2%, and the Dominican Republic by 4.7%. Peru, meanwhile, is expected to register growth of 3.2%, compared to 2.3% for Colombia and 0.8% for Chile.
In South America , Argentina would also stand out for its recovery, with a projected growth of 2.1% this year, after the contractions recorded in 2023 and 2024. The World Bank linked the improved outlook to fiscal adjustment, structural reforms, and measures aimed at strengthening market confidence and stimulating investment.
In Central America , performance would be supported by the recovery of investment and external flows. Guatemala would grow 3.7%, Honduras 3.4%, Nicaragua 3.6%, and Costa Rica 3.3%.
The Caribbean , however, presents significant differences. Guyana is projected to expand by 23.7%, driven by its oil sector, while Suriname is expected to grow by 3.9%.
The World Bank highlighted that exports from the region’s major economies have shown resilience despite the volatility of trade policies. Furthermore, the opening of new trade corridors through agreements, such as the one established between the European Union and Mercosur, represents an opportunity to diversify markets and strengthen trade flows.
However, these favorable factors face internal and external obstacles. Private investment remains subdued amid economic uncertainty and real financing costs, while consumer confidence weakened by mid-2026 in several economies in the region , after showing signs of stabilization earlier in the year.
Added to this is the risk that the volatility of international energy prices will prolong inflationary pressures. The report noted that this scenario has led central banks to act cautiously, slowing monetary easing or maintaining restrictive conditions, which limits access to credit and makes business investment decisions more expensive.
Fiscal space also represents a constraint on regional growth. High levels of public debt and interest costs reduce the resources available for government investment, while the potential climate effects of El Niño could impact agriculture , hydroelectric power generation, and food and energy prices.
Given this scenario, the World Bank identified productivity as one of the main structural challenges facing Latin America and the Caribbean . While artificial intelligence (AI) represents an opportunity to improve production processes, the organization warned that its adoption does not automatically guarantee higher levels of efficiency, especially in economies where microenterprises, informality, and skills gaps predominate.
The report concluded that the region’s moderate growth does not necessarily represent its economic potential.
For Mexico and the rest of Latin America, strengthening investment, improving labor skills, reducing barriers to productivity, and taking advantage of trade opportunities will be key factors in consolidating more sustained growth and translating it into higher incomes for the population.
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