2026 Latin America economic outlook: Key trends and growth forecasts

As leaders in Latin America, we face the year ahead with a determined focus, drawing strength from the resilience we have built over the past twelve months. The story of 2025 was one of adaptability and consistent progress. Despite the challenges posed by a slowing global economy and shifting geopolitical dynamics, the region demonstrated a steady capability to embrace uncertainty and uncover new pathways to growth.

Looking towards 2026, the opportunity lies in combining this established resilience with strategic foresight. It is time for organisations to anticipate the political and economic changes ahead and position themselves for sustainable success.

A close look back at 2025 reveals measured yet meaningful progress. The Economic Commission for Latin America and the Caribbean (ECLAC) forecasts that regional GDP will grow by 2.4% in 2025, reflecting a reassuring level of stability even amidst downward revisions for individual markets. This growth has been achieved despite a less supportive external backdrop, reinforcing the region’s ability to weather volatility.

This resilience is not accidental. It is the product of decisive leadership and a commitment to bold investment, particularly in digital transformation and operational innovation. Latin American businesses have remained agile, responding proactively to inflationary pressures and changing market conditions.

Looking ahead, ECLAC predicts that regional growth will stabilise at 2.3% in 2026, with the headline figure concealing important differences between countries. For CEOs and boards, this highlights the need for a tailored, market-specific approach. There is no one-size-fits-all strategy; unlocking opportunity requires deep local understanding and adaptability.

Sub-regional trends and opportunities

While aggregate growth appears modest, disaggregated trends reveal areas of real opportunity for the middle market.

South America is forecast to see growth ease to 2.3%. Commodity demand and external trade remain key influences, but the region is actively seeking to diversify and increase intra-regional trade. The Mercosur trade agreement stands out as a pivotal opportunity to strengthen Latin America’s economic relationship with Europe. The finalisation of this agreement would unlock greater access to European markets, drive new partnerships and foster investment in strategic sectors. For middle-market organisations, this translates into opportunity – provided there is agility in navigating regulatory changes and leveraging evolving export channels, especially in agribusiness and industry.

Yet, delays in the finalisation of the Mercosur agreement are introducing a note of uncertainty, particularly for Brazil and other member states. These setbacks risk postponing market access and stalling the implementation of vital sustainability commitments, making a swift resolution critical to maintaining the region’s growth trajectory.

Another defining trend is the region’s growing leadership in renewable energy, with Brazil at the forefront. The recent COP30 summit in Belém highlighted Latin America’s commitment to climate action and accelerating its green economy. Expanding wind and solar projects are attracting international investment, aligning with ESG priorities, and creating favourable conditions for businesses championing sustainability.

Central America and Mexico are set for a projected growth of 3.6 and 1.3%, respectively. Their fortunes are closely tethered to the North American economy, and the ongoing trend towards nearshoring continues to provide a strong medium-term outlook. However, unlocking the full potential of these moves requires coordinated investment in infrastructure and energy reliability. In parallel, Central America’s developing fintech sector reflects a positive narrative of digital inclusion, driven by a young, digitally fluent population. Middle-market businesses that harness the rise in financial technology stand to benefit from wider financial inclusion, product innovation, and competitive differentiation.

Country spotlights: Engines of growth

To make sense of Latin America’s outlook, it is important to focus on some of its most dynamic markets, each presenting unique drivers and challenges.

Brazil

Brazil’s economy is expected to grow by 2% in 2026, building on continued political stability and an ambitious sustainability agenda. COP30, recently hosted in Belém, and the sustainability provisions embedded within the Mercosur agreement, reflect Brazil’s centrality in advancing regional climate action. These efforts combine international cooperation with domestic innovation, driving new investment in renewable energy, biodiversity, and responsible development. Significant investment in wind, solar and bioenergy is positioning Brazil as a regional leader in renewables, presenting compelling opportunities for businesses with a commitment to sustainability and progress. At the policy level, the government’s focus on social welfare and fiscal reforms supports a steady consumer environment. For the middle market, robust compliance with tax and regulatory frameworks remains crucial.

Argentina

Forecast growth of 4% in 2026 highlights Argentina’s recovery, powered by resilience in agriculture and innovation in agritech. There is a focus on expanding exports and embedding new technologies in traditional sectors. However, policy and currency volatility remain part of the operating landscape, requiring strong financial discipline and a proactive approach to change management.

Mexico

With a projected growth rate of 1.3% in 2026, Mexico’s outlook remains closely aligned with developments in the United States and policy outcomes following its recent general elections. Manufacturing and nearshoring continue to underpin the economy, opening up opportunities for investment and transformation within supply chains. The challenge for business leaders is to maximise benefits from efficient cross-border trade, while also adapting with agility to evolving domestic policy.

The political dimension: Elections to watch

Political dynamics will be a decisive factor in shaping 2026. Key elections across Chile, Colombia and Peru could bring significant policy and regulatory change. Building organisational resilience means not only recognising the risks of political transition but also preparing to leverage new opportunities as they arise.

In Peru, the national elections in April 2026 mark a shift to a bicameral legislature, intended to foster greater political stability. The large number of participating parties, however, suggests that navigating this complexity will require agile leadership and continued attention to evolving regulatory landscapes.

Colombia’s elections take place in a climate of political fragmentation and challenging security conditions. The government’s pursuit of a ‘total peace’ agenda stresses the importance of understanding not just the political, but the social context as well. Success in such environments depends on local expertise and a willingness to adapt to fast-changing conditions.

Turning resilience into strategic advantage

The connection of economic stability and political uncertainty will present both risks and opportunities in 2026. However, middle-market leaders can take proactive steps to ensure success:

1. Strengthen compliance frameworks: Now is the moment to review and future-proof your compliance with evolving regulations, particularly for businesses trading across borders or operating in regulated sectors such as energy, fintech and tourism. Compliance is not just about risk management; it builds trust, enhances reputation, and positions your organisation for growth.
2. Embrace scenario planning: Anticipate a range of policy outcomes and regulatory changes by planning for multiple scenarios. Develop agile strategies to adapt quickly to new requirements, whether in energy policy, digital regulation, or international trade.
3. Focus on operational excellence: The fundamentals of strong performance, efficient operations, investment in talent and technology, and strategic client relationships remain critical. By doubling down on what you can control, your business will be in the strongest position to respond to external shifts and capture new opportunities.

Installing confidence for the year ahead

The outlook for Latin America in 2026 is one of cautious optimism. The foundation of resilience established in recent years provides the springboard for the next phase of growth. While the road ahead brings its share of challenges, it is also rich with opportunity for those ready to act decisively. By remaining informed, agile, and focused on delivering quality and innovation, middle-market organisations across the region can drive positive change and thrive in an evolving landscape.

As a region, we have the strength to build lasting growth by fostering collaboration and harnessing the power of our shared expertise. Through RSM’s global network, we can support businesses in unlocking cross-border opportunities and accelerating collective progress. Our regional teams are committed to helping clients navigate these opportunities, unite across markets, and shape a sustainable, inclusive future for Latin America.

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