High debt, borrowing costs and uncertainty continue to restrain the region, while the report points to artificial intelligence as a potential source of productivity gains.
The economies of Latin America and the Caribbean are projected to grow by 2.2% in 2026, compared with 2.4% in 2025, according to the World Bank’s latest regional economic update, released October 6. The Bank described the outlook as modest but resilient, with countries experiencing different growth paths.
High debt and interest payments are limiting governments’ ability to invest in public services and infrastructure. The Bank also warned that volatile energy prices could slow progress in lowering inflation, keeping borrowing costs elevated and making credit and investment harder to obtain. El Niño could disrupt farming and hydropower production, potentially raising food and energy prices.
The regional average masks stronger performances in some countries. El Salvador and Paraguay have continued to outpace the broader region, supported by improved security, efforts to control public finances and private investment. Panama and the Dominican Republic have also maintained solid growth. Argentina is forecast to expand each year from 2025 through 2027—a three-year run not seen there in nearly two decades, according to the report.
World Bank Vice President for Latin America and the Caribbean Susana Cordeiro Guerra said stronger growth is possible when countries maintain sound economic policies, strengthen institutions and pursue reforms. The Bank said sustained investment in productivity could help create better jobs and raise incomes.
AI use is growing, but workplace adoption remains uneven
The report also examines how artificial intelligence could affect businesses, workers and public services across the region. About 17% of working-age adults surveyed across Latin America and the Caribbean reported using generative AI tools—a median rate roughly half that reported in the United States and Canada. Businesses are adopting AI, but relatively few have built it into their central operations.
The Bank said the main barriers are not simply the price of technology or access to it. Many employers need stronger management expertise, workers need relevant skills, and businesses may need to reorganize their operations to use AI effectively.
About 8% of workers in the region hold highly skilled, knowledge-intensive jobs where AI could support their work. Around 10% are in routine cognitive jobs whose tasks may be more exposed to automation. The report also noted that roughly one-quarter of workers are in routine manual occupations that could face greater automation as robotics and other hardware become less expensive.
To help countries benefit, the World Bank recommends improving businesses’ capacity to adopt new technology, expanding technical and short-term training, and modernizing digital government services and data systems. It also points to “small AI”—lower-cost tools tailored to local needs—as a way to support education, telemedicine, public services, small businesses and farmers.
The report’s central message is that access to technology alone will not deliver stronger growth. Countries and businesses will need the skills, institutions and organizational capacity to put those tools to productive use.
By the Haitian Tribune Staff
