World Bank sees Argentina among region’s fastest-growing economies in 2026-27

The World Bank said Argentina has become one of the region’s “positive exceptions,” projecting it will rank among Latin America’s strongest-performing large economies this year and next as stabilization efforts and reforms lift expectations and improve financial conditions.

In its latest Latin America and the Caribbean Economic Review, the Washington-based lender said Argentina expanded 4.4% in 2025 and is expected to grow 3.6% in 2026 and 3.7% in 2027. If met, the forecasts would mark a milestone: Argentina has not logged three consecutive years of GDP growth since 2008, the report said.

“The Argentine economy has emerged as the main upside exception, as stabilization and reforms have improved expectations and financial conditions,” the World Bank said, noting the country’s projections stand above the regional average growth rates it forecasts of 2.1% in 2026 and 2.4% in 2027.

Will Maloney, the World Bank’s chief economist for Latin America and the Caribbean, said Argentina’s growth projection is slightly lower than what the institution had expected months earlier, but he described the 3.6% estimate for 2026 as still strong by regional standards. Maloney also warned about an acceleration in inflation in recent months.

Maloney said concerns about external competition are understandable as the economy opens, arguing that greater openness can help companies become more efficient, but that the region has relatively few firms operating at the technological frontier. As a result, he said, many companies could struggle, while it remains too early to say which new firms might emerge to create jobs.

The World Bank credited Argentina’s fiscal consolidation under President Javier Milei with strengthening the overall program. The report cited efforts to rationalize public spending, cut administrative inefficiencies and retarget energy-price subsidies away from higher-income households as measures that helped anchor inflation expectations and compress sovereign risk.

The lender also described Argentina’s improved fiscal dynamics as another “exception” in a region marked by fiscal fragility and rising borrowing costs, and pointed to a decline in country risk and a “pro-growth agenda.” It cited the creation of the RIGI investment incentive regime and progress on trade deals, including with the United States.

Despite the upbeat growth outlook, the World Bank warned that Argentina faces “significant downside risks,” particularly tied to the external sector, debt and the flow of dollars. It highlighted substantial external financing needs in a context of negative net international reserves and limited access to international debt markets.

In its regional comparison, the World Bank said Argentina stands out among the largest economies, even as it projects higher growth this year for some smaller countries, including Guyana (16.3%), Paraguay (4.4%), Suriname (4.0%) and Panama (3.9%). Among other big economies, it forecast more modest growth for Brazil (1.6%), Colombia (2.2%), Mexico (1.3%), Chile (2.4%) and Peru (2.7%).

Looking at the broader region, the World Bank attributed Latin America’s relatively slow growth to three main factors: high borrowing costs linked to fiscal capacity constraints, weak external demand and inflationary pressures stemming from geopolitical uncertainty, which it said weigh on private investment and job creation.

The report also highlighted what it called structural opportunities in Latin America, including the region’s share of global lithium reserves, copper resources and a relatively clean energy matrix, alongside a reform push gaining momentum in several countries. It urged governments to advance industrial and sector policies that encourage growth and emphasized restoring business confidence, unlocking private investment and boosting productivity.

The World Bank said the policy mix it recommends includes investment in education, technical training and management development to narrow skills gaps; expanding access to financing so firms can take risks; strengthening institutional capacity to design policies that can identify market failures; and deepening trade integration to lift competitiveness. In that context, it pointed to Argentina’s bilateral agreement with the United States and progress on the EU-Mercosur deal.

Original reporting by Por Esteban Lafuente for La Nación

Sharing is caring!