Argentina is set to lead Latin America in economic growth next year, according to the World Bank, which has raised the nation's 2025 forecast to 5.5 percent — the highest in the region.
President Javier Milei's government will welcome the news, which came as the World Bank downgraded projections for most of the world due to rising trade barriers and weakening exports.
In its latest economic prospects report, published Tuesday, the multilateral institution trimmed its 2025 global GDP outlook to 2.3 percent, down 0.4 percentage points from its January forecast.
Latin America and the Caribbean are also expected to grow 2.3 percent, 0.2 points less than previously projected.
“Just six months ago, the world economy seemed headed for a soft landing,” said Indermit Gill, the Bank’s chief economist. “Now it appears to be running into fresh turbulence.”
The report blames higher US tariffs – particularly those affecting Mexican exports – and sustained uncertainty in global trade for the downturn. Weaker commodity prices and rising protectionism are expected to further weigh on regional economies.
Argentina is a rare bright spot. After two consecutive years of recession, the World Bank predicts a strong rebound fuelled by agriculture, energy and mining. It credits recent reforms, the easing of currency controls, and steps toward macroeconomic stability with restoring investor and consumer confidence.
Growth is projected to continue at 4.5 percent in 2026.
Mexico faces the sharpest downgrade, with growth expected to reach just 0.2 percent in 2025 following new 25 percent US tariffs on exports outside the North American trade deal. Brazil is also set to slow in 2026 due to softer consumption and sluggish investment.
The World Bank warned that persistent inflation in countries like Brazil and Colombia will leave little room for interest rate cuts, limiting space to stimulate growth.
Additional risks include a US or Chinese slowdown and a drop in remittances, which account for about 20 percent of GDP in several Central American and Caribbean economies.
– TIMES/AFP
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