The International Monetary Fund has urged Latin American governments to use still-favourable global conditions to cut public debt and raise productivity, warning that fiscal adjustment has stalled in many countries. The call came in the Fund’s Regional Economic Outlook for the Western Hemisphere, released on 16 October 2026, which paints a picture of modest growth — and of an IMF Latin America outlook that is falling behind faster-growing regions.
FAKTA
- The message: The IMF urged Latin American governments to cut public debt and lift productivity “while tailwinds last,” as fiscal adjustment has stalled in many countries.
- Western Hemisphere growth: 2.2% in 2026 and 2.3% in 2027, including the United States and Canada — a slight deceleration from 2.4% in 2025.
- Latin America and the Caribbean: Growth estimated at 2.3% in 2026 and 2.5% in 2027, trimmed by 0.1 and 0.2 percentage points from the July forecasts.
- Key voice: Nigel Chalk, head of the IMF’s Western Hemisphere Department, said “public debt continues to rise” while favourable financing conditions “may not last.”
- The backdrop: Strong US demand, high commodity prices, supportive financial conditions and robust tourism and remittances are sustaining activity — but not fixing high debt and weak productivity.
IMF Latin America outlook: growth trimmed, debt rising
The Fund’s economists estimate that better terms of trade and looser financial conditions add about 0.6 percentage point to 2026 growth in Brazil, Chile, Colombia, Mexico and Peru compared with last year. But uncertainty over tariffs and geopolitics partly offsets that expansion, the report said.
On Argentina, which saw a large cut to its expected economic expansion, Chalk said data this year had been weaker than the Fund expected — though he sees growth rebounding next year.
The International Monetary Fund’s Regional Economic Outlook warns Latin America is falling behind faster-growing regions.
| Region | 2026 growth | 2027 growth |
|---|---|---|
| Western Hemisphere (incl. US, Canada) | 2.2% | 2.3% |
| Latin America and Caribbean | 2.3% | 2.5% |
| World | 3.1% | 3.4% |
| Emerging and developing economies | 3.7% | 4.4% |
Stalled adjustment and the productivity gap
Countries in Latin America implemented consolidation measures in 2025, the report noted, but the adjustment was smaller than envisaged — and has stalled “for many” this year. Brazil, Canada and many Caribbean economies are cushioning higher energy prices, which runs counter to fiscal consolidation.
The Fund expects few Latin American countries to move closer to advanced-economy living standards in the next several years. Chalk called the risk of falling further behind “an urgent problem.”
Buenos Aires, Argentina: the IMF cut Argentina’s expected expansion after weaker-than-expected data this year.
Inflation and risks ahead
Amid the energy and food price surge triggered by the Middle East conflict, the IMF expects inflation to return to target in most countries by the end of 2027. Risks are tilted to the downside for economic growth and to the upside for inflation, according to the report.
Conclusion
The IMF’s message is blunt: the tailwinds of strong US demand, high commodity prices and easy financing will not last forever, and Latin America must use them now to fix its debt and productivity problems. For more Americas coverage, see Quebec election: separatists win and promise independence referendum and Hurricane Simon strengthens to Category 4 off Mexico.
