IMF and World Bank’s April 2026 Update: Latin America's Economic Outlook

“After withstanding higher trade barriers and elevated uncertainty last year, global activity now faces a major test from the outbreak of war in the Middle East,” begins the IMF’s World Economic Outlook April update. While the conflict in Iran is roiling the global economy and sending gas prices skyward, the IMF isn’t making major revisions to its regional growth forecast for Latin America countries.

That doesn’t mean they aren’t affected by global conditions. “Economies around the world face repercussions through the direct impact of higher commodity prices, indirect second order effects on inflation expectations—which tend to be especially sensitive to energy and food prices—and amplification effects coming from risk off sentiment in financial markets,” explains the report.

Those effects could be amplified if the war is prolonged. The IMF forecasts two scenarios: one where the war ends imminently and one where it deepens. Net energy importers, like Central America and the Caribbean, stand to see their growth diminished if the war continues whereas energy exporters, like Brazil and Venezuela, could see more growth. This growth, though, could be undercut by rises in the price of goods like fertilizer.

Even before the war, however, many of Latin America’s biggest economies weren’t slated for major economic growth. The region’s two largest economies, Brazil and Mexico, are constrained by “tight domestic financial conditions, limited fiscal space, and trade policy uncertainty,” explains the World Bank’s April 2026 Economic Update for Latin America and the Caribbean.

But that report also highlighted “pockets of dynamism persist among smaller LAC economies.” Central American countries, it explains, are integrating into regional supply chains. Argentina is enjoying improved financial conditions from fiscal stabilization and reforms. And Paraguay is experiencing strong agricultural exports and a stable macro framework, making it one of the region’s fastest growing economies.

AS/COA Online digs into the IMF’s data, as well as the World Bank’s April 2026 Economic Update for Latin America and the Caribbean.