World Bank Cuts Chile GDP Growth Forecast to 0.8% for 2026
The World Bank sharply downgraded its economic growth forecast for Chile in 2026, dropping its projection from 2.4% down to just 0.8% in its latest Latin America and the Caribbean Economic Outlook report. According to the multilateral lender, cooling domestic demand, deteriorating labor market conditions, rising fuel prices, severe weather events, and lower mining output drove the significant downward revision.
The updated figure places Chile below the wider regional average growth rate of 2.2% projected for the year. However, the World Bank upgraded its outlook for 2027, raising Chile’s expected gross domestic product expansion from 2.3% to 3%.
Regional Growth Revisions Across Latin America
Economic prospects vary widely across major Latin American economies in the latest World Bank assessments. Argentina saw its 2026 growth forecast reduced from 2.6% to 2.1%. Despite this trim, the lender projects that Argentina will log three consecutive years of economic expansion between 2025 and 2027, driven by fiscal adjustments, tax reforms, and a more open economy—a streak the country has not seen in nearly two decades.
Brazil experienced an upward revision, with its 2026 growth estimate rising by half a percentage point to 2.1%, compared to a prior forecast of 1.6%. Colombia’s economy is expected to advance by 2.3% in 2026, while Mexico’s GDP growth is projected at 1.4%, with both countries seeing minor upward adjustments of 0.1 percentage points from previous estimates. Peru received a more substantial upgrade, as its projected growth rate for 2026 climbed from 2.7% to 3.2%.
Energy volatility and public debt threaten regional growth
Persistent energy price volatility threatens to stall the ongoing disinflation process across the region, keeping central banks cautious and prolonging high interest rates, the report stated. Elevated public debt levels continue to restrict fiscal space for governments throughout Latin America and the Caribbean.
The World Bank also cited the El Niño phenomenon as a distinct risk factor capable of disrupting agriculture and hydroelectric power generation, which could trigger higher food and energy prices. “Latin America and the Caribbean has the potential to achieve more solid and ambitious growth,” said Susana Cordeiro, World Bank Vice President for Latin America and the Caribbean, noting that countries maintaining solid macroeconomic frameworks and institutional reforms are proving that higher growth remains achievable.
World Bank lowers Chile growth forecast to 0.8%
Why did the World Bank lower Chile’s 2026 growth forecast so drastically?
The lender pointed to a combination of softening domestic demand, worsening labor market conditions, rising fuel costs, adverse weather patterns, and lower mining production as the core drivers behind the reduction from 2.4% to 0.8%.
How does Chile’s 2026 growth projection compare to the rest of the region?
Chile’s expected 0.8% expansion falls below the broader Latin American and Caribbean regional average growth rate of 2.2% for the year.
What does the World Bank expect for Argentina’s economy through 2027?
The World Bank projects that Argentina will grow for three consecutive years from 2025 to 2027, fueled by fiscal adjustments, tax reforms, and economic opening, marking its first such streak in nearly twenty years.
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