WASHINGTON, DC – Latin America and the Caribbean (LAC) is projected to have economic growth of 2.2 per cent this year, broadly in line with the rate of 2.4 per cent recorded in 2025, according to the World Bank Group’s Latin America and the Caribbean Economic Update.
The financial institution said that although average regional growth remains modest, diverging country paths show that a stronger performance is possible.
It said several countries making sound and durable policy choices are delivering stronger results, including faster growth consistently above three to four per cent, more investment, and greater market confidence.
“Latin America and the Caribbean has the potential to achieve stronger and more ambitious growth. Countries that have maintained sound macroeconomic frameworks, strengthened institutions, and advanced reforms are demonstrating that stronger growth is possible,” said Susana Cordeiro Guerra, World Bank Vice President for Latin America and the Caribbean.
“The region has significant talent and resources. The priority now is to build on these strengths through consistent policies and investment that can raise productivity, create better jobs, and increase incomes,” she added.
In the Caribbean, a dual-track reality persists: Guyana and Suriname’s oil-driven expansions contrast with the maturing, more tempered post-pandemic recovery of tourism-dependent island economies facing high energy and transportation costs.
According to the report, The Bahamas will record growth of three per cent this year down from 3.8 per cent last year, with the forecast being 2.5 per cent in 2027, while Barbados growth of 2.7 per cent this year will decline to two per cent next year with a forecast of 2.5 in 2027.
Belize’s economic growth of 2.6 per cent this year, will decline slightly to 2.4 next year and 2.2 per cent in 2027, while Dominica’s economic growth of 4.5 last year, will drop to three per cent this year and 2.7 per cent in 2027.
The report notes that in the case of Grenada, economic growth of 4.9 per cent last year will decline to 3.3 per cent this year and three per cent in 2027, while in the case of Guyana, growth of 19.3 per cent last year, will increase to 23.7 per cent this year, with the forecast for 2027 being 18.7 per cent.
Haiti, one of the poorest countries in the Caribbean region with minus 2.7 growth last year, will also record negative growth this year of -1.5 with a forecast for 2027 being two per cent.
Jamaica’s economic growth of 0.2 per cent last year will decline to minus -0.8 per cent this year with the forecast for 2027 being three per cent. St. Lucia’s growth of minus 0.6 per cent last year will be replaced by a positive 1.1 per cent this year and a forecast of 2.1 per cent for 2027.
The World Bank report notes that in the case of St. Vincent and the Grenadines last year’s ecconomic growth of 3.7 per cent will be replaced by 2.6 this year and the same figure is forecast for 2027, while in the case of Suriname the 2025 economic growth of 2.7 per cent will be replaced by an increase to 3.9 per cent this year and a 4.6 growth forecast for 2027.
Trinidad and Tobago’s economic growth of minus 0.5 per cent in 2025 will be slightly lowered to minus -0.2 per cent this year with a forecast of 2.5per cent in 2027.
The World Bank report notes that the risks to the region are tilted to the downside. Energy price volatility could stall disinflation and keep central banks cautious, prolonging the high real interest rates that constrain credit and investment.
It said high debt and interest burdens continue to limit fiscal space and crowd out public investment. El Niño could further disrupt agriculture and hydropower and push up food and energy prices.
The report examines how artificial intelligence could raise productivity while reshaping work across the region. Firms are already adopting AI broadly, though rarely in ways that reach their core business processes.
Among the wider population, a median of 17 per cent of working-age adults across the region report using GenAI tolls, roughly half the rate in the US and Canada. In both cases, the main barriers to productive use are not cost or access, but managerial know-how, workforce skills, and firms’ capacity to reorganize around new tools.
“AI is already here. The question is whether the region can use it productively,” said Carlos Rodriguez-Castelan, World Bank Acting Chief Economist for Latin America and the Caribbean. “A powerful tool is less relevant if workers and firms lack the capacity to act on what it produces. Governments that invest now in skills and firm capabilities will likely see real gains.”
The report identifies that generative AI is already changing cognitive work: roughly eight per cent of the workforce holds high-skill, knowledge-intensive jobs that could be enhanced by AI, while a similar share of the workforce, around 10 per cent, works in routine cognitive occupations whose tasks are more exposed to automation.
A second wave could reach physical work over time, as automation hardware becomes cheaper. About a quarter of workers hold routine manual jobs that may be exposed.
The report recommends building firms’ capabilities, expanding short-cycle and technical training, and modernizing digital government and data systems. It also highlights the potential of “small AI,” low-cost applications adapted to local needs that are already showing promise in areas from education and telemedicine to public service delivery. Small AI could also be a powerful tool for small and medium enterprises, farmers, and the broader population, putting scarce expertise within reach of millions.
