Annual Economic Outlook for Latin America and the Caribbean

Key Chapter Title List

1. Five Economic Trends Worth Watching in the Payments Sector for Latin America and the Caribbean in 2026
2. Latin America and the Caribbean Are Returning to a Stable and Sustainable Growth Trajectory
3. Declining Inflation and Rising Wages Are Restoring Household Purchasing Power
4. Remittance Growth Is Stabilizing
5. Major Events Drive Tourism and Cross-Border Spending
6. Artificial Intelligence Presents Opportunities and Challenges for Latin America and the Caribbean
7. Global and Local Uncertainties Demand Resilience and Adaptability
8. Potential Shocks Could Alter the Development Path of Regional Countries
9. Case Study: Regime Change in Venezuela

Document Introduction

This report, prepared by the Visa Business and Economic Insights team, aims to provide a professional assessment of the macroeconomic outlook for Latin America and the Caribbean in 2026 and its impact on the payments industry. The report indicates that after years of turbulence, the region's economy is expected to return to a more normalized pace of growth in 2026. Core forecasts show that, assuming inflation is controlled, the region's overall real GDP growth rate is projected to be close to 2%, with growth in most countries aligning with their long-term potential. Achieving this cruising speed relies on conditions such as controlled inflation, stable employment, and monetary policy moving towards neutrality.

The report's core analytical framework revolves around five key economic trends. First, with inflation receding and wages rising, household purchasing power is expected to improve significantly, becoming a primary driver supporting consumer spending and payment transaction volumes. Second, remittances from the United States are projected to maintain moderate growth, providing ongoing external support for many economies, although new remittance taxes and stricter immigration rules may pose constraints. Third, major cultural and sporting events, exemplified by the 2026 FIFA World Cup co-hosted by Mexico, are expected to strongly boost cross-border spending, tourism, and related industries, while accelerating the adoption of contactless and card-based payments. Fourth, artificial intelligence offers the region genuine opportunities to enhance productivity, improve public services, and support formal employment, but the realization of its potential is constrained by challenges in infrastructure, skills, and digital inclusion.

Despite the generally stable growth outlook, the report also highlights risks stemming from global and local uncertainties. A slowdown in global economic growth, particularly weakened demand from the United States and China, is expected to soften demand for the region's exports. The World Bank predicts that overall commodity prices could decline by nearly 7% this year, dragged down by energy prices. However, South American countries are in a relatively favorable position as prices for their main exports (such as soybeans, beef, copper, gold, and silver) are expected to rise moderately. Within the region, political events such as upcoming elections in several countries and the review of the USMCA may trigger short-term market volatility. Using Venezuela's regime change as a case study, the report analyzes how changes in the international environment can exacerbate uncertainty and emphasizes the necessity of incorporating such global risks into scenario analysis.

Regarding policy implications, the report notes that central banks across the region are generally lowering or maintaining interest rates at or near neutral levels, reducing borrowing costs for households and businesses and helping to improve the economic growth environment. Simultaneously, governments are unlikely to significantly increase spending as public debt ratios remain relatively high. The report concludes that while Latin America and the Caribbean are returning to a stable growth path in 2026, resilience and adaptability remain crucial. The evolving new global order may spark renewed interest in nearshoring, potentially benefiting some of the region's larger economies in the medium to long term.