Which were the best Latin American economies in 2025 ?
- LatamSinFiltro
- Jan 19
- 6 min read
Latin America in 2025
→ The sources mentioned below were consulted in writing this section:
Preliminary Overview of the Economies of Latin America and the Caribbean, 2025. 2025. December 16. ECLAC.
Latin America and the Caribbean Economic Review, October 2025: Transformational Entrepreneurship for Jobs and Growth. 2025. October 7. World Bank.
According to the Preliminary Overview of the Economies of Latin America and the Caribbean, 2025 of ECLAC, Latin America's growth rate moderated to 2.4% in 2025, and experts forecast 2.3% of growth in 2026. ECLAC states that Latin America’s growth is insufficient to combat poverty and inequality in the region.
Latin America: annual variation rate of Gross Domestic Product (GDP) - 1st quarter of 2022/ 4th quarter of 2025
In percentages (%), based on the CPP method
According to the report Latin America and the Caribbean Economic Review, October 2025: Transformational Entrepreneurship for Jobs and Growth of the World Bank Latin America is one of the regions of the world that recorded the lowest economic growth in 2025.
Among all the countries, Argentina stands out with very positive economic results: its growth rate in 2025 exceeded its average growth rate between 2010 and 2019.
In several countries, economic growth has been driven primarily by private household consumption. However, it grew at a slower pace mainly because of declining job and wage growth. Furthermore, domestic demand, as well as consumer and business confidence in the economy and the market, remains very weak. The declining demand of G7 countries and China as well as their own low economic growth have directly impacted Latin America’s economy.
The World Bank report indicates that Latin America's weak GDP growth stems from several structural problems: fragile and ineffective institutions, overly complex regulations that stifle entrepreneurship, lack of infrastructure, brain drain... Furthermore, the study indicates that most Latin American countries have failed to capitalize on the rise of new technologies to stimulate growth.
Interest rate
Central banks in Latin America had difficulty lowering interest rates in 2025 firstly because they needed to prevent capital outflows, but also because European central banks themselves maintained fairly high interest rates. Geopolitical and trade regulation uncertainty partly explained the behavior of central banks in 2025.
Inflation
In 2025, (headline or non-core) inflation maintained its downward trend. However, if we look at core inflation, that is, excluding the price of energy and food products, we can observe that the trend is slightly different for each country and that, for example, it increased in countries like Brazil, Chile, and Mexico.
Difference between inflation and core inflation:
Inflation measures the evolution of prices for all types of products and services that can be consumed while core inflation rate does not include energy or food products. Core inflation can be a useful indicator because the price of food and energy products tends to be pretty volatile. Their price often depends on the global geopolitical and economic context.
Comparing the inflation and core inflation rate can help us determine whether inflation is primarily due to rising energy and food prices.
a. Annual inflation rate (percentages, year-on-year)
b. Annual core inflation rate (percentages, year-on-year)
The ECLAC report indicates that this decrease is due to:
Normalization in supply chains after the pandemic
Lower transport costs
Depreciation of the dollar and appreciation of several Latin American currencies
On top of that, the tariffs imposed on Latin American countries by US President Donald Trump have actually had less of an impact on economies than anticipated.
Rankings based on 2025 data
Gross Domestic Product (GDP) growth rate
→ Preliminary Overview of the Economies of Latin America and the Caribbean, 2025. 2025. December 16. ECLAC.
TOP 5 countries with the highest GDP growth rates in 2025:
Venezuela: 6.2%
Paraguay: 4.2%
Argentina-Panama: 4.1%
Costa Rica: 3.9%
Guatemala-Honduras: 3.8%
Foreign direct investment (2024)
→ Foreign Direct Investment in Latin America and the Caribbean, 2025. 2025. ECLAC.
ECLAC has not yet published the figures for 2025.
TOP 5 of countries that received most FDI in 2024:
Brazil
Mexico
Colombia
Chile
Argentina
Foreign direct investment (FDI) flows to Latin American countries: 2021 and 2024 (in millions of dollars and as a percentage, %)
This ECLAC report indicates that in 2024, foreign direct investment (FDI) in Latin America increased by 7.1%, reaching $188.962 billion. This rise can be explained by the increase in reinvested earning on FDI (=reinvested earnings on foreign direct investment (D43) are retained earnings, treated as if they were remitted to foreign direct investors in proportion to their ownership of the equity of the enterprise and then reinvested by them by means of additions to equity in the financial account. Source: French National Institute of Statistics and Economic Studies)
International trade (2024-2025)
→ International Trade Outlook for Latin America and the Caribbean, 2025: International trade in a new era of weaponized interdependence. 2025. ECLAC.
TOP 5 goods exporting countries in 2024 and 2025* (value in millions of dollars):
*(ECLAC projections by December 2025)
2024:
Mexico
Brazil
Argentina
Peru
Colombia
2025:
Mexico
Brazil
Chile
Peru
Argentina
TOP 5 service exporting countries in 2024 and 2025* (value in millions of dollars):
*ECLAC projections by December 2025
2024:
Mexico
Brazil
Panama
Colombia
Argentina
2025:
Mexico
Brazil
Panama
Colombia
Argentina
TOP 3 countries exporting high-tech products* (2024):
Mexico: 85%
Brazil: 7%
Costa Rica: 3%
*ECLAC includes in this list products with higher technological requirements: aerospace products; computer equipment, office machines; electronics and telecommunications; pharmaceutical products; scientific instruments; electrical machines; chemical products, non-electric machines; armaments.
TOP 3 countries exporting modern services* (2024):
Brazil: 33%
Mexico: 17%
Argentina y Costa Rica: 10%
*ECLAC defines modern services as “digitally provided services, such as IT services, financial services and business services, which have constituted the most dynamic category of exported goods over the past decade.”
Mexico is thus the largest exporter in the region.
38.1% of Latin American exports are commodities (energy, minerals and metals, agricultural and livestock products):
Energy: 10.8%
Minerals and metals: 12.0%
Agriculture and livestock farming: 15.3%
Economic outlook for 2026
Preliminary Overview of the Economies of Latin America and the Caribbean, 2025. 2025. December 16. ECLAC.
Latin America and the Caribbean Economic Review, October 2025: Transformational Entrepreneurship for Jobs and Growth. 2025. October 7. World Bank.
ECLAC forecasts a low growth rate for 2026, quite similar to that of 2025 and a decline in private consumption and domestic demand.
Why? Experts say that Latin America is exposed to all kinds of external shocks: commodity price fluctuations, financial crises, and variations in Chinese demand…The current global uncertainty, which will persist into 2026, will also impact the Latin American economy. Geopolitical tensions, the fragmentation of the world into several geoeconomic areas, and the rise of protectionism before weakening international trade will all have repercussions for Latin American economies.
However, the ECLAC report also indicates that the low growth rates recorded in Latin America since 2023 correspond to the “stabilization of regional growth.” The low GDP growth rate projected for 2026 actually reflects one of the phases of the region’s economic growth cycles and does not mean that Latin America lacks potential. Let me explain myself:
Experts say that the region's exposure to all sorts of external shocks is the root cause of Latin America's growth cycles. When a “negative” event occurs in the world, such as a financial crisis, a war, a fall in commodity prices, or a pandemic, the region experiences then low or even negative growth rates. Subsequently, the economy usually recovers, and growth rates become pretty interesting but then they fall again and stabilize at fairly low rates for several years. Latin American economies are not resilient enough. Every external event has an impact on these highly unstable economies.
However, the region has many opportunities to seize: the World Bank report indicates that “the transition to a low-carbon global economy represents an opportunity for Latin America. The region has renewable resources, extensive fertile land, and mineral resources such as lithium and copper. All these resources are necessary to ensure the energy transition and meet the global sustainable development goals. In order to benefit from these resources, governments must implement structural reforms and policies that promote a more sustainable and innovative industry.
What else would you like to know? Let me know in the comments!
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