UN agency raises still modest growth forecast for Latin America, Caribbean

Economies in Latin America and the Caribbean are on track for modest growth this year, a slight upgrade from an earlier forecast but still challenged by a complex global environment and high uncertainty, the United Nations said on Tuesday. The UN's Economic Commission for Latin America and the Caribbean (ECLAC) raised its regional growth forecast for 2025 to 2.2% from the 2.0% growth it had projected in April.

In a report, the commission warned that this growth remains fragile, held back by a combination of weak international demand and persistent internal challenges. Factors such as sluggish consumer spending, low investment, and deep-seated inequalities continue to limit the region's potential. Globally, "geopolitical tensions and rising protectionism persist, and possible disruptions to supply chains are anticipated," the report added.

The report also noted a lack of synchronized monetary policy among major economies, fueling financial uncertainty. On a positive note, regional inflation stabilized around 3%, and "is expected to remain at that level in 2025 and 2026," with risks predominantly on the upside, ECLAC said.

While the commission estimates that job creation will slow, it sees unemployment remaining stable at around 5.6%. For 2026, it forecasts a regional expansion of 2.3%.

The organization raised its 2025 growth projections for Brazil, Chile, Panama, Paraguay, Uruguay, and Venezuela. For the Brazilian economy, the region's largest, ECLAC now expects a 2.3% expansion, up from a previous 2.0%. The forecast for Latin America's second-largest economy, Mexico, was held at 0.3%.

It also maintained its growth projections for Argentina at 5.0%, Colombia at 2.5%, and Peru at 3.1%. For Chile, the estimate was raised to 2.4% from 2.2% in April.

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