Latin America | Addressing the urgent, but also the important

Latin America remains exposed to external forces, from shifts in economic policy in the world’s major economies to conflicts unfolding in other parts of the globe. Against this uncertain backdrop, the region is striving to maintain steady economic growth, projected at around 2.0% in 2026 and 2.1% in 2027. Mexico’s improving outlook stands out, although it is not enough to offset the slowdown in countries such as Brazil and Colombia. Economic activity across the region has also been shaped by ongoing domestic political shifts and weather conditions.

The world is currently experiencing a particularly intense El Niño event, characterized by warming ocean temperatures in the equatorial Pacific. The latest measurements from the National Oceanic and Atmospheric Administration (NOAA), the U.S. climate agency, suggest that this could be the most severe El Niño event in at least 50 years. In Latin America, El Niño brings significant drought and rainfall deficits to much of Central America, Colombia, and Venezuela, while causing excessive rainfall in northern Mexico and the southern part of the continent, from Peru to Argentina. The effects of this weather anomaly, particularly when it is this severe, tend to weigh on economic growth in Peru and Argentina. In Colombia, meanwhile, the impact is felt primarily through inflation.

As a result, growth in Peru is now expected to be lower in both 2026 and 2027 than previously forecast. In Argentina, however, it is still too early to assess the potential impact, as much will depend on the extent to which the country’s soybean- and wheat-producing regions are affected. In Colombia, the effects are already beginning to emerge in the latest inflation figures, with perishable food prices leading the increases, although the impact is expected to become more pronounced in early 2027. Against this backdrop, Latin America is facing inflationary pressures that have pushed inflation above central bank targets, prompting policymakers to adopt a more hawkish tone or, in some cases, even tighten monetary policy, as in Colombia. This response has helped contain, at least partially, the depreciation of regional currencies against the U.S. dollar.

The region faces several short-term challenges, but in an environment where global interest rates are likely to remain higher for longer, attention must also turn to more structural imbalances. It may sound like an all-too-familiar prescription, but the only sustainable path toward meeting the region’s social and economic needs lies in a transformation of its productive capacity—something that has so far remained elusive in Latin America. Addressing what is urgent matters, but so does tackling what is important.

Press article. Published in El País on October 18, 2026.