Narayan AmmachchiThe economies of Guyana, Argentina, and Paraguay are leading growth in Latin America and the Caribbean (LAC) in 2025, according to the latest World Bank outlook.
The multilateral lender has slightly raised its regional growth projections, forecasting the LAC economy to expand by 2.3% in 2025 and 2.5% in 2026.
However, it warned that the region will remain the slowest-growing among global economies.
In its report, the Bank said most countries in the region continue to face stubborn inflation, high public debt, weak investment, and global uncertainty.
Guyana is projected to post a robust 11.8% growth, driven by its oil boom, while Argentina and Paraguay are expected to grow by 4.6% and 4.2%, respectively. They will be followed by Saint Vincent and the Grenadines (4%), Panama and Guatemala (3.9%), and Costa Rica (3.6%).
Among the larger economies, Brazil and Colombia are forecast to grow by 2.4% each, slightly above the regional average.
The World Bank cautioned that persistent inflation, fueled by rising labor costs in the services sector, has limited the region’s scope for monetary easing. Elevated borrowing costs continue to weigh on investment, job creation, and productivity, it added.
Regional debt remains a pressing concern, with the debt-to-GDP ratio projected to reach 63.8% in 2024, up from 59.9% in 2019. The Bank urged governments to curb inefficient spending and strengthen tax collection to restore fiscal space and support long-term growth amid sluggish capital accumulation and productivity gains.
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