WASHINGTON, CMC – The World Bank, on Wednesday, said that economic development in Latin America and the Caribbean (LAC) is projected to grow 2.1 percent this year, below the 2.4 percent recorded in 2025.
In its latest Latin America and the Caribbean Economic Update, the Washington-based financial institution projected 2027 growth at 2.4 percent.
It said the subdued outlook reflects a challenging macroeconomic environment, with high borrowing costs, weak external demand, and inflationary pressures from geopolitical uncertainty, which are damping private investment and job creation.
According to the World Bank, The Bahamas will register growth of 2.2 percent this year, declining to 1.9 percent in 2027, while Barbados’ growth this year is 2.7 percent, increasing to 3 percent in 2027.
Belize will register economic growth of 2.4 percent this year, decreasing slightly to 2.2 percent in 2027, while Dominica’s growth of 2.8 percent this year will increase slightly to 2.9 percent the following year.
Grenada’s economic growth of 3.1 percent this year will decline slightly to 3 percent next year, while Guyana, with economic growth of 16.3 percent this year, will register 23.5 percent growth in 2027.
Haiti will grow by 0.6 percent this year, rising to 1.9 percent next year, while Jamaica’s 1 percent economic decline this year will improve to 3.2 percent in 2027.
St. Lucia will register economic growth of 1.9 percent this year, declining slightly to 1.8 percent the following year. In comparison, St. Vincent and the Grenadines’ economic growth of three per cent this year will be bettered the following year, reaching 3.1 percent, and Suriname is also expected to register growth, moving from four per cent this year to 4.5 percent in 2027.
Trinidad and Tobago’s economic growth of 0.7 percent this year will increase to 3.2 percent next year, according to the World Bank’s projections.
The report argues that, with the right policies, the region can pivot and harness its natural resources, energy potential, and reform momentum to create quality jobs and foster more inclusive and productive growth.
“Latin America and the Caribbean have the assets—and the reform capacity—to achieve far more. The central ambition should be clear: create quality jobs that power growth and lift productivity,” said Susana Cordeiro Guerra, World Bank Vice President for Latin America and the Caribbean.
The World Bank said consumer spending continues to support growth, but only modestly. Investment remains weak, as firms are holding back amid a difficult external environment in which global interest rates are expected to remain high, growth in advanced economies and China is slowing, and uncertainty over trade policy persists.
It said geopolitical tensions, including the conflict in the Middle East, have compounded the challenge, pushing energy prices higher and introducing inflationary risks that could delay monetary easing. These factors place additional pressure on governments already operating under tight fiscal constraints.
According to the World Bank, public debt ratios, though stabilized, remain high by historical standards, and elevated interest payments crowd out spending on infrastructure and social investment, the areas most critical to long-term growth.
Restoring business confidence, unlocking private investment, and raising productivity are essential. The region has strategic strengths to build on: approximately 50 percent of global lithium reserves, one-third of global copper reserves, a relatively clean energy mix, and, in several countries, reform momentum gaining ground. Harnessing these assets to boost growth and create quality jobs will require building technical and entrepreneurial foundations for sustained competitiveness.
Across the region, some governments are turning to industrial policy to tap into this potential. The report argues that the effectiveness of any such strategy will depend on getting the basics right first.
“For Latin America and the Caribbean to increase growth and diversify its economies, industrial or productivity policies need to invest in the base: skills, openness, and strong institutions, the conditions that allow firms to place bets, innovate, compete, and grow,” said William Maloney, World Bank Group Chief Economist for Latin America and the Caribbean.
The report highlights four recommendations to build this base, namely closing skills gaps through education, technical training, and management development; expanding access to finance and strengthening insolvency frameworks so firms can take risks and grow; deepening trade integration to boost competitiveness and technology adoption; and building institutional capacity to design policies that can identify market failures, adjust course, and sustain results.
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