IMF lifts Latin America 2025 growth estimate, lowers 2026 forecast

By Rodrigo Campos

Oct 14 (Reuters) - The International Monetary Fund on Tuesday raised its estimate for economic growth this year for Latin America and the Caribbean to 2.4% on the back of lower-than-expected U.S. tariff rates and an upward revision for Mexico, while next year's forecast was revised a tick lower.

The region is projected to increase its economic output by 2.4% in 2025, up from the IMF's estimate of 2.2% in July, while the forecast for 2026 growth dipped one-tenth of a percentage point from July to 2.3%, the global lender said in its World Economic Outlook.

It was released as financial officials from around the world gather in Washington for the IMF and World Bank annual meetings.

The bulk of the 2025 growth upgrade comes from Mexico, the second-largest economy in Latin America and one which six months ago was expected to contract this year. It is now projected to expand 1.0%. The IMF in July estimated it would grow 0.2%.

Brazil, the region's largest economy, is forecast to grow 2.4% this year, up from the 2.3% projection in July. Growth, however, is expected to decelerate next year to 1.9%, even slower than the 2.1% estimated in July. The IMF noted that Brazil is in the group of countries for which the debt-to-output ratio is set to rise significantly.

Argentina's 4.5% growth estimate for this year is a full percentage point lower than projected three months ago, while the IMF's 2026 view for the South American country was cut to 4% from 4.5%.

The global economy has been unexpectedly resilient to U.S. President Donald Trump's import tariffs, partly due to front-loading in anticipation of higher costs. U.S. dollar weakness, also unexpected in the face of tariffs, has helped emerging markets, including some in the region, attract investments.

Inflation in Latin America and the Caribbean is estimated to land at 7.6% this year and slow to 5% in 2026, sharply down from the 16.6% reported in 2024.

The World Bank last week lifted its 2026 economic growth outlook for the region to 2.5% from a previous 2.4%.