The World Bank projects Latin America and the Caribbean will grow 2.2% in 2026, broadly in line with 2.4% in 2025, as stronger performance in several countries contrasts with modest regional growth. El Salvador, Paraguay, Panama and the Dominican Republic continue to outperform on policy foundations including fiscal consolidation, improved security and private investment. Argentina is projected to expand for three consecutive years through 2027, supported by fiscal adjustment, tax reform and greater economic openness. Risks remain tilted to the downside. Energy price volatility could slow disinflation and keep real interest rates high, while heavy debt and interest burdens constrain public investment. El Niño could also disrupt agriculture and hydropower and raise food and energy prices. The report finds that artificial intelligence could lift productivity, but productive adoption is constrained mainly by managerial expertise, workforce skills and firms’ ability to reorganize. About 8% of workers hold high-skill jobs that AI could enhance, around 10% work in routine cognitive roles more exposed to automation, and roughly one-quarter hold routine manual jobs that could face longer-term exposure as automation hardware becomes cheaper. The World Bank recommends strengthening firms’ capabilities, expanding technical and short-cycle training, modernizing government data systems and developing low-cost AI applications tailored to local needs.

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